ACIT, NEW DELHI vs. M/S VARDAN FASHION, NEW DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE I.C.SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No.1143/Del/2013 (Assessment Year: 2007-08)

Vardan Fashions, JCIT, E-1/7, 2nd Floor, East Patel Range-33, Vs. Nagar, New Delhi New Delhi PAN:AACFV0423H (Appellant) (Respondent) ITA No.950/Del/2013 (Assessment Year: 2007-08)

ACIT, Vardan Fashions, Circle-33(1) E-1/7, 2nd Floor, East Patel Vs. New Delhi Nagar, New Delhi PAN:AACFV0423H (Appellant) (Respondent)

Assessee by : Sh. Ajay Wadhwa, Adv Revenue by: Sh. Vijay Verma, CIT DR Date of Hearing 11/05/2016 Date of pronouncement 08/07/2016

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee and revenue against the order of ld CIT (A)-XXVI, dated 30.11.2012.

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b) Printings of the bills of the suppliers are in similar fashion and name of the buyer, address, description of goods, quantity and date are written manually. c) The gross profit of the assessee excluding the expert incentive is in negative; according to the Assessing Officer, it is not possible in case of 100% merchandise export concern. d) The Special Audit Team visited the address appearing on the purchase bills on those address no business activity was carried out there. e) Some of the addresses of the suppliers were residential house and some of the owners of those addresses denied awareness about such suppliers. f) The purchase bills did not show VAT No and according to AO there is a VAT liability of 12.5% on readymade garments like T-shirts and ladies dresses etc. the alleged suppliers were required to pay VAT to the Govt. of respective states. g) Some of the bank account of the suppliers are maintained with the bank branches which is situated at far distance from the address of the parties. It was also the observation of the AO that assessee‟s bank account was also in the same bank branches. h) The payment were made by the assessee to the suppliers by pay orders for purchases, according to the AO it should have been paid

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by a/c payee cheques as the account of payer and payee are in the same bank and assessee has incurred unnecessary bank charges. i) From some of the suppliers the assessee has entered into transaction of advances paid and advances received. According to the Assessing Officer there was no commercial expediency in these transactions from both the sides. 5. Assessee submitted before the AO that the goods purchased by it are exported undisputedly and on which export incentives and export proceeds have been received, the gross profit earned by the assessee is comparable and therefore the purchases are genuine which are made through brokers. He further stated that the brokers usually collected payments on behalf of the suppliers. It was also submitted that the gross profit after export incentive is comparable. 6. Ld Assessing Officer rejected the explanation of the assessee and stated that the nature of transaction are highly doubtful and modus operandi appears to be that of similar to those used by accommodation entry operators. In view of this AO was of the view that assessee has inflated the purchases and therefore an addition of 30% of the value of purchase debited of Rs. 230034993/- amounting to Rs. 69010498/- was disallowed. Ld Assessing Officer relied on the decision of Hon‟ble Delhi High Court in case of CIT Vs. La Medica 250 ITR 575 and decision of Hon‟ble Gujarat High Court in case of Sanjay Oilcake Industries Vs. CIT 316 ITR 274 for supporting his stand.

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further stated that before the Assessing Officer assessee simply stated that the assessee through brokers has made the purchases. However, such facts were not there before the special auditor. He referred to page No. 5 to 31 about the addendum to audit report. He further submitted that the ld CIT (A) at para No. 3 has stated that the full opportunity was granted to the assessee and even then he has admitted additional evidences. Therefore, according to him there was absence of sufficient cause for admission of additional evidences. He further submitted that ld Assessing Officer has submitted a remand report dated 05.06.2012 wherein the Assessing Officer has objected to the admission of additional evidences and these are not considered by the ld CIT (A). He further submitted written submission dated 10.05.2016 objecting the additional evidences. On the issue of alleged bogus purchases he relied on the decision of coordinate bench of Vijay Proteins Ltd. 58 ITD 428. During the course of hearing he also submitted that order passed by the Income Tax Settlement Commission u/s 245D(4) dated 29.07.2013 for AY 2009- 10 to 2011 -12 in case of assessee as well as one Shri Inderpal Singh Wadhawan. He relied heavily on the order wherein the assessee has himself offered 1% of total purchases in statement of facts as additional income that was enhanced by Income Tax Settlement Commission. He referred to para No. 4.1 of the order of Income Tax Settlement Commission and stated that the parties, the broker, the business of the assessee is similar to what has been admitted by the assessee before the

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Settlement Commission qua the impugned assessment year and therefore, order of the ld CIT(A) on deletion of the various addition has no legs to stand. 17. Against this, the ld AR of the appellant submitted that the assessee is a merchant exporter and exports the goods as a trader. He submitted that sales of the assessee are found to be genuine as accepted by the ld Assessing Officer and in those circumstances purchases can‟t be treated as bogus. He relied on the decision of the Hon‟ble Gujarat High Court in case of CIT Vs. Kashiram Textiles Mills Ltd. 284 ITR 61. He further submitted that the payment of the purchases have been made by the pay orders which was equivalent to a/c payee cheques. The Assessing Officer himself has examined these facts. He further submitted that most of purchases are made through the brokers and affidavit of the brokers has been submitted before the ld CIT(A). In fact assessee himself has submitted this before the Assessing Officer which is recorded in the assessment order itself at Page No. 8. He stated that such affidavit were also sent to AO by the ld CIT (A) and which remains uncontroverted. He submitted that if the affidavits remain uncontroverted then the content of the same stands accepted. For this proposition, he relied on the decision of Hon‟ble Supreme Court in case of Mehta Parikh and Co. Vs. CIT 30 ITR 187. He further stated that the location of bank accounts of the suppliers have nothing to do with the bank accounts of the assessee and merely because they are in the same branch, it cannot be used

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against the assessee. He stated that no material exists which proves the point of revenue that the purchases are bogus. It is merely a suspicion and surmises. He further stated that for the year the gross profit of the assessee is 5.93% compared to last year wherein it is 4.52% and is comparable. He stated that results of three independent comparable companies in similar business were submitted before the Assessing Officer, which are mentioned at Page No. 10 of the assessment order which has lower gross profits rates than the assessee. Therefore, he submits that the assessee has better comparable profits than the companies engaged in the similar business. He further stated that the ld Assessing Officer has not shown a single instance where the rate at which the material is purchased by the assessee is at higher rates than the prevailing market rates. In absence of any such evidence the addition made by the Assessing Officer on account of bogus purchases is baseless. He further stated that handwriting of the bills and printings of the bills are the flimsy grounds as ld Assessing Officer has not shown any evidence about the role of the assessee in it. He further submitted that the report of the inspector stated by the ld Assessing Officer and relied up on very heavily by revenue that the suppliers were non existence that such report was never given to the assessee for his comments. He further stated that regarding the payment, a certificate of banker is also provided which shows that all the payments related to purchases were credited to the account of the payee. On the issue of

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reliance by the ld Assessing Officer on two case laws, he submitted that the decision of the Hon‟ble Delhi High Court in case of CIT Vs. La Medica were altogether on different factual matrix wherein even the operation the bank account of the supplier was at the behest of the assessee and the supplier were not found to be having PAN No. He further distinguished the facts on several counts. On the decision of Hon‟ble Gujarat High Court he stated that the entire amount of payment was withdrawn from banks and there was no trace or identity of the person withdrawing the amount from bank account in that case even the payment were doubted. He stated that Assessing Officer has made additions simply on the basis of special audit report only. On the issue of the order of Settlement Commission, he submitted that it does not belong to this year and therefore it does not apply to the facts of year of appeal. Further he stated that in the enquiry made by the revenue in Settlement Commission the facts that the goods were purchased through brokers is conclusively proved. He stated that even otherwise the purpose, the manner for approaching the settlement commission does not prove that the purchases are bogus. It is merely the contention of the assessee that it may not be able to prove the purchases conclusively as it purchases through brokers who in turn purchases form very small patty traders and even sub-brokers and therefore, to avoid unnecessary litigation and to have peace of mind the assessee has approached the settlement Commission. He stated that even otherwise, that order cannot apply to

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the facts of the present case and in no case settlement petition of the assessee can go against the assessee in other years which are not part of that order. Therefore, he vehemently relied on the order of the ld CIT (A) in admitting the additional evidence as well as in deletion of the addition on account of bogus purchase. 18. The ld DR in rejoinder relied on the remand report submitted before the ld CIT (A) as well as the order of settlement commission in the case of the assessee. 19. We have carefully considered the rival contention and perused the material placed before us. The assessee is a merchandise exporter who purchases the goods and export them as it is. For the year ended 31.03.2007 the assessee has turnover of Rs. 229039928/- from export sales and duty drawback of Rs. 15486387/- was received as export incentive. To export these goods assessee has shown purchases of Rs. 230034993/-. Assessee does not have any opening or closing stock for the year. Therefore, assessee has earned gross profit of Rs. 14491322/-, resulting into GP ratio of 6.32%. On the same result the assessee has earned net profit of Rs. 3016485/-. During the year assessee has shown quantitative details of goods as under:- ITEMS OPENING RECEIPTS ISSUE CLOSING BALANCE (in Nos) (in Nos) BALANCE

Nil 6933 6933 Nil LADIES

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BLOUSE Nil 4248 4248 Nil Ladies Skirt Nil 12936 12936 Nil Men‟s lower Nil 13040 13040 Nil Pajamas Nil 30528 30528 Nil Shawls Nil 1290950 1290950 Nil T-Shirt Nil 28080 28080 Nil Vest

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in handwriting of one person and in case of the eight parties listed at sl. No. 3.2.1 of the order in the handwriting of another person. Further, similarly, four parties listed at sl. No. 3.2.2 of the order it is mentioned that bills of these parties are in the handwriting of third person. We have carefully noted the finding of the Assessing Officer and we find that there is a contradiction in the finding of the Assessing Officer. Firstly, M/s. Surya Fabrics, listed in para No. 3.2 as well as para No. 3.2.1, secondly, M/s. Pawan Fabrics appears in the list of parties at para No. 3.2, 3.2.1 and 3.2.2 i.e. in all three classification made by the Assessing Officer. Thirdly, M/s. Hanuman Enterprise is also appearing in all the three lists, M./s. Arun Textiles also appears in para NO. 3.2 as well as para No. 3.2.1, same way M/s. Shiva Enterprise and M/s. Kartik Agencies also appears in two different set of lists. Therefore, the allegation of the Assessing Officer that bills are prepared in handwriting of three different persons shows contradiction as stated above. Be that it may be. However, from the handwriting of the bills nothing can be proved. Therefore, the finding of the special auditor about the handwriting is an observation which does not have any sanctity and that creates doubt and suspicion in the mind of the ld. AO. 22. The next contention of the Assessing Officer that printing of all the bills are in same fashions and that assessee has bought the blank printed bills from a stationery shop and deputed three persons to fill up the name and address of the assessee as a buyer of such bills mentioning

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description of goods with quantity and rate to match with the export made by the assessee during the year. The above allegation made by the ld Assessing Officer at para No. 3.3 of the Assessment order is made based on the observation of the special auditor. We find that this allegation is unfounded. Firstly, because the bills are not prepared by three different persons as already held by us pointing out inconsistency in the finding of the Assessing Officer at para No. 3.2 of the assessment order. Further, printing of the bill in similar fashion cannot be the reason to doubt that the bills are bogus and we further found that the bills are also not printed in manner suggested by auditor and Ld AO. Before us at page No. 91 to 156 of the Paper Book assessee has given copies of the bills. On perusal of those we do not find that they are printed in the similar fashion. The bill of Arun Textile and the Bills Harpik Agencies and the bills of Rupscraft Inc. and Shri Hanuman Enterprises do not show that they are similarly printed. Contrary to this even the bill Shri Hanuman Enterprise at Page No. 153 and Bill of same party at page NO. 155 itself shows that even they are not similar. In view of this, the finding of the Assessing Officer on this ground based on special audit report is also not correct. 23. The Assessing Officer has stated that the assessee has produced three photocopies of the duplicate bills showing different invoice no. The allegation made by the auditor and repeated by the Assessing Officer that assessee has photocopies the bill after filling name of the buyer and

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goods etc. leaving blank bill no. and afterwards, invoice no on those bills have been written. The Auditor has made this allegation at page No. 9 in para No. C of the audit report and same is ad verbatim mentioned by the Assessing Officer in para No. 3.4 of the order. Surprisingly, if that be the case the stock register maintained by the assessee could have been verified and that could have been corroborated with the copy of the account of the supplier. The copy of the account of the above party is at annexure-C page No. 193 of the Special Audit Report. On perusal of the copy of the account we find that the assessee has purchased the goods from this party through sixteen bills and all the bills have been paid out showing Nil opening and closing balance. Neither the auditor nor the Assessing Officer could point out which are these three similar bills having the same quantity and the same rate. In the audit report three bills of the above parties are attached at page No. 153 to 155 which is in all for 45000 units of fabric T-shirts purchased @170/ T-shirt amounting to Rs. 2550000/- per bill for export. During the year the assessee has exported T-shirt 1290950 nos. If there is any doubt about the material then it is apparent that there would not have been export of these materials. In these circumstances, the allegation made by the Special Auditor and the ld Assessing Officer remains unfounded. 24. It is further stated that certain enquiries were made about the identity and existence of the suppliers from whom the assessee purchased the goods and they were not found at the given address. The auditor has

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mentioned this and therefore the ld Assessing Officer also deputed Inspector for the verification. The facts are mentioned by the auditor at page No. 9 para No. F of the report. Further at para No. 3.19 it is stated that the AO did an independent verification of the address of the suppliers in some cases on test check and it has been reported by the Inspector that the suppliers do not exist at the addresses given in the list. However, no such finding has been recorded by the Assessing Officer about which parties address were verified by the Inspector and what is the report. The fact of this enquiry is silent in the assessment order as well as in the remand report submitted before the ld CIT(A). It is also apparent that no such inspector report was confronted by the ld AO to the assessee. Therefore it is apparent that ld Assessing Officer has proceeded on the same line of enquiry which was done by the auditor. We have carefully perused provisions of section 142(2A), Rule 14A of the Income Tax Rules and Form No. 6B along with the annexure, we do not find any reason which prompted the auditor to proceed with „investigation‟ of the accounts when the only mandate given to him was to „audit‟ the account. In the annexure submitted before us of the special audit, we do not find any adverse comment on 15 points prescribed by the Rule making Authority including maintenance of books of accounts and stock register showing quantitative details. The quantitative details of purchases have been certified by the auditor as correct and contradicting that it is stated that purchases made from parties are

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bogus. The Special Auditor has commented the statement of facts on these points which matches exactly with the audit report of the assessee including the quantitative details of the goods traded. If that be the case we failed to understand that if the mandate was to investigate the accounts of the assessee, what stopped the Auditor in verifying the bank accounts of the suppliers, the money trail also about the payments made by the assessee and how they have been withdrawn. It could have been further investigated about wherefrom the good have been procured by the assessee from export. Ld Assessing Officer has not carried on his duties of issuing 133(6) enquiry letter or summons u/s 131 of the Income Tax Act to the parties, brokers and the partners of the firm, and has blindly relied on the enquiry made by the auditor. The issue arises that the ld Assessing Officer does not have the address which are correct, therefore how such enquiry could have been done. The answer lies in the fact that bank account of those parties are available with the Assessing Officer, we see no reason that why neither the auditors nor the Assessing Officer has written a single letter to the bankers of the suppliers and obtained information about the correct address of the parties, who introduced them to the bank, copy of the bank accounts of the parties, trail of withdrawal from the bank account of the parties and the instruments used for alleged transfer of money to the assessee, if in case the purchases are bogus and modus operandi presumed by the auditor and the Assessing Officer is to be proved. We are pained to say that the

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auditor as well as the ld Assessing Officer has failed to conduct these general enquiries and in absence of this has presumed that purchases are bogus. We are of the opinion that unless this enquiry is done the opinion expressed by the auditor and followed by the ld Assessing Officer is fallacious. 25. The ld Assessing Officer has further stated that the suppliers do not have the VAT registration or the VAT has not been paid. The audit report at page No. 11 has stated that fact. The issue before us is not whether the VAT has been paid by the suppliers or not the issue is whether the purchases are bogus or genuine. If the suppliers has not paid VAT it may be the responsibility of the suppliers and not the assessee and in any case it may be a default under the local VAT act. Merely because the TIN are not stated on the bills and VAT is not charged by the suppliers the purchases cannot be held to be bogus in absence of any enquiry with the VAT authority about the dealers/suppliers. It is surprising that one revenue authority i.e. Assessing officer did not share the information of violation of VAT law with other authority i.e. VAT department. In any case the auditor who conducted the special audit as well as the assessing officer are not the expert on VAT matters. Therefore the view expressed by them should have been further enquired from the VAT authorities which the ld. AO has failed to do. 26. Ld. assessing officer further noted that that in case of 3 suppliers mentioned in para No. 3.10 of the assessment order their bankers are

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Punjab National bank and Indian overseas bank at Punjabi Bagh and Rajouri Garden, whereas the suppliers are situated at Ghaziabad or Gurgaon. According to the assessing officer the location of their banks are far away from their business addresses. Ld. assessing officer was also of the view that that assessee was also having the bank account in those bank branches. Therefore , it was observed by the Ld. assessing officer that the assessee is paying to the creditors through pay orders and not through account payee cheques. Assessee has paid out of the total purchases of Rs. 23 crores , Rs 5.43 crores through pay orders and has incurred bank charges. According to the Ld. assessing officer, any prudent businessman would have paid by the account payee cheque and would not have incurred such bank charges by making payment through pay orders. We have carefully examined this reason given by the assessing officer as well as the special auditor. However it remains uncontroverted fact that out of the total purchases of Rs. 23 crores the assessee has made payment of only Rs. 5.43 crores through issue of pay orders. The balance amount of almost Rs. 18 crores have been paid by the assessee through account payee cheque. This fact further gets support from the view that that the Ld. assessing officer has made disallowance under section 40A (3) of the act on payment of Rs. 5.43 crores only. That means assessee has made a substantial payment that is almost Rs. 18 crores for purchases of goods through regular banking channel which is acceptable to ld AO. According to us the manner of

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the payment of these purchase invoices through the Pay order is also an accepted method of payment. In view of this merely because the bank account of the suppliers and buyer assessee are in the same bank branch and assessee has made payment of Rs. 5.43 crores out of total purchases of Rs. 23 crores through pay orders does not prove in any manner that that the purchases booked by the assessee is bogus. In fact it proves that the purchases have been made by the assessee and for which the suppliers have been paid through regular banking channels by cross account payee cheques and by the bank pay orders. It is also not the case of the assessing officer that the money has not been credited into the bank account of those suppliers. The amount of bank charges paid by the assessee for issue of pay orders etc cannot go against the assessee because the payments by the pay orders is also an accepted method of payment and are more secured. Therefore this reason given by the Ld. assessing officer and the special auditor cannot be accepted to hold that purchases are bogus. 27. Ld. assessing officer was also of the view that some of the suppliers have deposited sum with the assessee and no prudent supplier will deposit money with the buyer without any commercial expediency. The amount of deposit made by some of the suppliers amounting to Rs. 6.15 crores has already been dealt with by the assessing officer by making the addition under section 68 as unexplained credit in the hands of the assessee therefore we will deal with this issue as and when we deal with

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the addition made by the Ld. assessing officer which has been deleted by the Ld. CIT (A). In any case, this is a separate transaction which is required to be treated according to the provisions of the Income Tax Act separately which Ld. assessing officer has also dealt with separately. Therefore, the amount of loan advanced by the suppliers to the assessee cannot lead to any credence to the theory that the purchases are bogus which are made from those parties. 28. One of the arguments raised by the Ld. assessing officer for making the addition is that the assessee is doing business of export of goods and only export incentive is the real profit/ income of the assessee and therefore no businessperson would do business at the loss. The auditor has also expressed the similar view. The view of the auditor and the Ld. assessing officer is based on the fact that during the year the gross profit earned by the assessee is negative if export incentives are ignored and only because of export incentive received by the assessee it has made gross profit positive. We do not agree with this view. The reasons for our disagreement is the that whenever the assessee is engaged in an export business every prudent businessman quote the prices of the goods to be exported after considering the benefit of export incentive that it will receive, which is also his business income. Only this can make the export of goods competitive. The export benefits are nothing but the reimbursement of cost of duties and taxes suffered by the assessee when the goods are exported. Therefore, the gross profit must take into

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consideration the export benefit receivable by the assessee. Therefore, for this reason it cannot be said that the assessee is doing the business incurring the losses. It is not the case of the assessing officer or the auditor that even after the export benefit considered by the assessee it has incurred losses. Hence, we reject this argument of the revenue. 29. Furthermore the Ld. assessing officer has relied upon the decision of the Hon‟ble Delhi High Court in case of CIT vs La Medica 250 ITR 575 as well as the decision of Hon‟ble Gujarat High Court in case of Sanjay Oil cake Ind versus CIT 316 ITR 274. In the decision before the Hon‟ble Delhi High Court it was held that that the suppliers were of no means or were found to be incapable of doing business of that scale. Further, in that case there was a finding by the Ld. assessing officer that the rates on which purchases made by the assessee were on the higher side. Further the bank account of the supplier was also operated by one of the persons introduced by the partner of the firm and it was alleged that the bank account was also being operated by the assessee firm. In the present case there is no such allegation that that the rates at which the purchases are been booked by the assessee are higher than the market rate and further the bank account of the suppliers are also being operated by the assessee. Therefore there is material difference between the facts found by the Hon‟ble Delhi High Court and the facts in the present case. Decision of Hon‟ble Gujarat High Court cited before us in CIT versus Sanjay oil cake industries limited 316 ITR 274 facts were

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where certain additions were made on account of inflated purchase price and alleged sellers were not traceable and though payments had been made by account-payee cheques, entire amounts so deposited had been withdrawn by bearer cheques, the Hon‟ble high court upheld the addition confirmed by the tribunal. In the present case the fact of purchases made by the assessee are at inflated prices as well as the withdrawal of the amount deposited in the bank account of the suppliers are absent. Therefore reliance by the Ld. assessing officer on both these decisions is misplaced. 30. Before us the Ld. DR during the course of hearing further relied on the decision of coordinate bench in case of Vijay proteins Ltd versus ACIT [58 ITD 428]. We have carefully considered the facts of that decision. In that particular case the assessee was said to have purchased material from 33 parties which were not found genuine. During the course of assessment proceedings, the assessee could not produce the suppliers, the brokers and transporters in spite of specific opportunities provided to the assessee. The documents pertaining to the brokers were also provided before the 1st appellate authority only. In that particular case certain transactions were totally denied by the parties and amount was collected through cheques by almost all parties through the bank account in the name of one person who has close link between that person and the assessee company which was established and therefore the transactions were found to be fictitious. The transporters also either

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did not exist or denied having done any such transportation work. The cheques issued in this behalf were never received by the suppliers or the brokers and were in fact collected back by the assessee through the bank account of 'P' operated under the control and direction of the managing director of the assessee. In these facts and circumstances the contentions raised by the assessee that the transactions are made through the brokers was not believed and therefore the provisions of section 145 (2) was attracted and then 25% of the purchase price accounted through such fictitious invoices is disallowed. The entire amount of freight paid for purchase of those was also disallowed. The assessee was also asked to produce the brokers before the assessing officer which assessee failed to produce. In the present case the provisions of section 145 (2) were not at all invoked. Secondly the payments made by the assessee to the supplier are through banking channels and same were deposited in the bank account of the suppliers only. Thirdly, there is no evidence that the payment has come back to the assessee which was made to the supplier. In present case the assessee has specifically submitted that the purchases have been made through brokers and affidavit of the brokers were also submitted. None of brokers were ever examined by the assessing officer even in the remand proceedings also. In view of these facts of the present case as well as the case of coordinate bench cited before us we are of the view

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that they are not similar. In view of this the reliance placed by the Ld. departmental representative on that case is misplaced. 31. Over and above the three cases discussed above , it will be worthwhile to mention that the learned representatives of both sides had cited several judgments during the course of hearing and written synopsis filed. We have carefully gone through all those judgments and have borne in mind the principles of law laid down by different courts in the various decisions cited by them. It is neither proper nor necessary to discuss the ratio laid down in various cases and its applicability or otherwise on the facts and circumstances of the present case. 32. It is also very important to note that despite there being a special audit under section 142 (2A) and Ld. assessing officer reaching to the conclusion that the purchases and recorded by the assessee are from non-existent parties and therefore bogus, the Ld. assessing officer did not invoke the provisions of section 145 (2) of the act. It‟s also pertinent to note that assessee has maintained the day-to-day stock register and also the regular books of accounts along with the quantity tally of the goods purchased and exported books of accounts of the appellant have not been rejected, in the decision cited before us by the Ld. DR in almost all cases the books of accounts have been rejected and the gross profit by disallowing the part of the purchases have been added. When the books of accounts are not rejected by providing latent, patent and glaring

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mistakes in accounts we are of the view that ld. Assessing officer does not have any power to tinker with the book results. 33. To justify that the gross profit rate earned by the assessee is proper assessee has given 3 comparable cases wherein the gross profit earned by those comparables are in the range of 3.23 percentages to 2.41 percentages whereas the gross profit earned by the assessee is 5.93%. The Ld. assessing officer has not commented on the comparables given by the assessee. In view of this it cannot be said that the gross profit earned by the assessee is less than what the industry standard. Further surprisingly it is also found that that in case of 1st comparable the gross profit including export incentive was Rs. 5.36 crores and the export incentive was 11.02 crores. In the 2nd comparable will instance given by the assessee the gross profit earned by the company was 3.27 crores whereas the export incentive was Rs. 9.05 crores. In the 3rd comparable the gross profit was Rs. 3.75 crores whereas the export incentive was Rs. 12.52 crore. All these result of the comparable also supports our view that in the export market the export incentive is one of the profit driver which cannot be excluded while working out the gross profit of the assessee who is engaged in the business of the export. 34. Regarding admission of additional evidences the ld CIT (A) has dealt with this issue as under :-

“10.2 From the above, i.e. the Assessing Officer's letter it becomes evident that most of the necessary documents and details which were

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not filed before the special auditor, in the absence of which the special auditor had pointed out various discrepancies, were filed before the Assessing Officer in response to show cause letter dated 12.05.2010. From the above letter dated 08.06.2010 it is evident that the Assessing Officer was not left with much time to complete the assessment. As the matter was getting barred by time to complete the assessment, the Assessing Officer could not provide sufficient opportunity to the appellant to furnish any further evidence, other than what he had submitted in response to the Assessing Officer's show cause notice dated 12.05.2010. I have also perused the fresh evidences that consisted of a) affidavits of brokers, b) details of creditors/depositors with confirmatory letters, c) copy of the ledger account of the partner and d) copies of cash book and ledger of the appellant and its partner Sh. Satvinder Singh. The affidavits are statements on oath which are legal documents constituting evidence in respect of purchases. The other evidence as mentioned above are also relevant evidences for the purpose of deciding the related issues. Therefore, these documents which are filed as additional evidences are required to be admitted in the interest of natural justice.

10.3 In view of the above, it is considered that the appellant was not given sufficient time and opportunity, except a show cause letter dated 12.05.2010, inter alia to furnish the evidences which the appellant has now produced before me in the form of additional

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evidence. In this situation the objection of the Assessing Officer against admission of fresh evidence is rejected and the additional evidences are admitted, in the interest of natural justice, as they are relevant and vital evidences in deciding the issues arising from the grounds of appeal.”

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that the letter dated 08/06/2010 by the Ld. assessing officer to the special auditor wherein the Ld. assessing officer has asked the special auditor to attend the office of the Ld. assessing officer on 18/06/2010. Therefore the Ld. CIT (A) was of the view that that there was no sufficient time left for the assessing officer to make further enquiry and to ask assessee to submit further details on the relevant issues. Further as the additional evidences submitted by the assessee were vital to decide that issues in appeal the LD CIT (A) has rightly admitted the additional evidences. We do not find any irregularity in the order of the Ld. CIT (A) in admitting those additional evidences. 36. On the issue of the disallowance on account of bogus purchases , Ld CIT (A) has dealt with this addition while deleting it as under :-

“15 I have considered the facts of the case, written submissions filed by the appellant in the course of appellate proceedings, supported with additional evidences, Assessing Officer's comments thereon in his remand report and the appellant's rejoinder thereto and adjudicated the issues raised in the grounds of appeal on merit. The impugned addition of Rs.6,90,10,4987- to the total income of the appellant has been made by the AO by disallowing 30% of the total purchases by treating the same as bogus and inflated purchases relying on the report of the special auditor. On perusal of the material on record, I find that the Assessing Officer, except for the report of special auditor, has not brought on record any material on his own for arriving at the conclusion that the purchase price has been inflated. I consider it necessary to refer here to the letter of the Assessing Officer dated 8.6.2010 written to the special auditor,

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which has been reproduced above. In this letter, the Assessing Officer has clearly stated that the appellant furnished most of the relevant documents and details which were not filed before the special auditor and in the absence of the same, the special auditor had pointed out various discrepancies. It was also stated by the Assessing Officer in the same letter that the special auditor pointed out various discrepancies in the absence of the documents and details which the appellant could not submit before the special auditor. I have also gone through the reply dated 31.5.2010 filed by the appellant in response to the Assessing Officer's show cause notice dated 12.5.2010. From the assessment order, it is noted that the Assessing Officer has not made any observations as to why the reply filed by the appellant dated 31.5.2010 was not acceptable to him. On the basis of the special auditor report, the Assessing Officer conducted enquiries through the Inspector and found that the suppliers were non-existent. Thereafter, I also find from the assessment order that the Assessing Officer has not confronted the appellant with the report of his Inspector in which he reported that the suppliers mentioned in his report did not exist at the given addresses. The Assessing Officer ought to have confronted the appellant with the Inspector's report with regard to the non-existent suppliers at the given addresses, Had this opportunity been given to the appellant in the course of the assessment proceedings by the Assessing Officer the appellant would not have filed the affidavits of the brokers as additional evidence in the course of the appeal proceedings. Even during the remand proceedings, the Assessing Officer did not examine these affidavits pertaining to the suppliers despite of the letter dated 25.10.2011 and asked the appellant's version on this issue. This is a denial of opportunity to the appellant. The Assessing Officer has recorded his findings such as "nature of the bills is bogus" and "transactions are highly doubtful"

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and "the modus operand! appears to be that similar to those used by the accommodation entry operators", without bringing any adverse any material on record to rebut the appellant's version. He has also not identified any such entry operators who provided the inflated bills of purchases to the appellant. According to the Assessing Officer, in the instant case, the appellant procured the fictitious inflated purchase bills through entry operators. But he has not identified the so called entry operators nor gave a finding that the alleged suppliers were the entry operators. While accepting that the export sale is genuine, the Assessing Officer doubted the suppliers from whom the alleged inflated purchases were made and stated that the alleged suppliers were apparent sellers and the actual suppliers were some other parties. However, he has not given a clear finding, as to who were the actual sellers and brought any material on record to say who were the actual sellers to whom he made a reference in his order. In this situation, the Assessing Officer did not give a categorical finding pertaining to the alleged suppliers except for some vague observations based on surmises and conjectures. In such situation, the Assessing Officer's finding is nothing but a vague statement in a casual manner. 15.1 After the considering the material on record, I find that the Assessing Officer accepted the fact that the appellant is a merchandise exporter of readymade garments. He did not dispute the total export sale shown by the appellant in his return of income. All the export sales were made through the banking channels after proper clearance from the custom authorities on verification/examination of the shipping and airways bills and payments were received by the appellant through banking channels. The bankers have also sanctioned the packing limit for the export business. Reference is made to the case reported in 134 ITJ 167

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Delhi CTR volume 52 part vi page 39 where it was held that purchases cannot be disallowed due to non-filing of confirmations from the suppliers, especially when the assessee furnished certificates from the bank stating that cheques were cleared and no defect in the books of accounts was pointed by the Assessing Officer. When the appellant furnished the details of purchases, simply because the bank account of the seller and the purchaser are maintained in the same bank and without proving that the amount had come back to the appellant in some form the addition on account of bogus purchases cannot be made in the case of the purchaser of goods. If the Assessing Officer considered that the purchases were bogus he ought to have examined the suppliers who furnished their affidavits on oath. Reliance is also placed in the judgment in the case of CIT vs. M.K. Bros. 163 ITR 249 (Guj.) where it was held that if the payment was paid by an account payee cheque, and the same has not been received back in any form, even if the seller declares that simply he has issued the bill and he has not sold the goods still nothing can be added in the case of the assessee. The appellant exported goods and furnished various expenses in the form of purchase bills, affidavits of the sellers, evidence of payment made through the banking channels. This evidence was sent on remand to the Assessing Officer. However, the Assessing Officer did not conduct a complete verification of such persons. No material was brought on record to suggest that purchases were bogus and audited accounts of the appellant were accepted by him. The Assessing Officer also did not identify the purchases that were found outside the books of accounts. After obtaining all the pieces of the evidence furnished by the appellant, the Assessing Officer is duty bound to bring further material on record before making an addition on account of bogus/inflated purchases. Reliance is also placed in the judicial pronouncement in

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the case of CIT vs. Hilux Automotive Pvt. Ltd. 23 DTR Delhi 383 wherein it was held that the appellant furbished sufficient material namely bank account of each parties to show payment, the finding of fact arrived by the Tribunal that the said parties were genuine supplier and the received payment by an account payee cheque is plausible and based on evidence. In view of all these evidences the Assessing Officer has not disputed the genuineness of the export sales rather he has admitted the export sale as genuine. 15.2 From the material on record, I find that the purchases were made by the appellant through brokers and since there was no dispute about the quantity and quality of goods supplied, the appellant did not enquire about these suppliers. The affidavits of the brokers which have been admitted as additional evidence have also been provided to the Assessing Officer to offer his comments subsequent to verification /examination. The Assessing Officer in his remand report has merely reiterated and reproduced what he already stated in the assessment order, dated 24.6.2010. As mentioned above the Assessing Officer was given another opportunity in the course of appellate proceedings to examine the affidavits and submissions filed by the appellant and to give his version on the issue of estimated disallowance of inflated purchases made vide order dated 24.6.2010. The Assessing Officer on 29.11.2012 appeared and stated that the Assessing Officer's order was correct with reference to the special auditor's report and comments in remand report. In the affidavits on oath, the brokers have confirmed having supplied the readymade garments to the appellant. In the remand proceedings too, the Assessing Officer did not issue summons to the brokers (who confirmed through affidavits) from whom the appellant made purchases. In the affidavits the brokers have confirmed having supplied the

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readymade garments to the appellant. Therefore in light of the judicial pronouncements in the cases of Hanutram Ramprasad vs. CIT (1978) 114 ITR 19 (GAU), Sri Krishna Vs. CIT (1983) 142 ITR 618 (All) & CIT Vs. Birbal Khanna & Co. (1983) 33 CTR 240 (MP), I have no reason to disbelieve the affidavits filed as additional evidence during the course of the appellate proceedings. The Assessing Officer did not give any categorical finding that the appellant purchased goods at inflated prices from the apparent seller and he did not bring out any comparable cases to substantiate his stand and also did not bring on record any material that would support the purpose of the appellant by indulging in the modus of operand! of procuring inflated purchases while accepting the entire exports sale as genuine. The Assessing Officer did not bring any material on record to show that the appellant derived any benefit or gain by procuring inflated purchases which is not found recorded in the books of accounts of the appellant. The Assessing Officer did not question the rate of purchase in comparison to/market price. Therefore, the Assessing Officer's finding that the appellant made inflated purchases is without any supporting material on record. On the contrary, the appellant furnished the complete details like purchase bills and payment made through banking channels to these alleged non-existent sellers. 15.3 As pointed out above, there is no dispute regarding the goods exported by the appellant and the Assessing Officer has also admitted the same. Once the genuineness of the export is proved it is but natural that the goods were purchased by the appellant. It may be mentioned that neither the special auditor nor the AO has brought on record any cogent material to show that the appellant had made purchases from the parties other than the parties recorded in the books of accounts.

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15.4 On the basis of the special auditor's report in the appellant's case the issue of purchases was identified by the Assessing Officer as an issue of inflated purchases. The appellant declared a GP rate of 5.93% for the year under consideration, which is better than the last year GP rate of 4.52%. The appellant has also filed three comparable cases before the Assessing Officer namely M/s. G.D. Manglam Exim Pvt. Ltd., M/s. Konark Exim Pvt. Ltd. M/s. Sidh Designers Pvt. Ltd. wherein G.P. rate of 3.23%, 2.41% and 3.02% respectively was declared but there was no comment in the assessment order in respect of such comparable cases. This action of the Assessing Officer is contrary to the judgment of the Hon'ble Calcutta High Court in the case of CIT V Eastern Commercial Enterprises 210 ITR 103 (Cal) in which it was held in para 4, "it is the duty of the Assessing Officer to counter the comparative statement cited by the assessee before he can have the option to estimate the Gross Profit. Again it is the comparative instance that alone can be the foundation of such estimate in case the accounts are really found to be unreliable and requiring to be rejected." The GP rate thus shown by the appellant in his own case is comparable with the GP rate declared in other cases of the State engaged in similar trade or nature of business. Reliance is placed in the judgment of the Hon'ble Rajasthan High Court in the case of CIT vs. Kansara Bearing Pvt. Ltd. 270 ITR 235 where it was held that the last year's profit declared by the assessee is the best guide for application of profit rate. The appellant G.P. rate during the year under consideration was far better than the last year. The Assessing Officer has not brought on record any comparable case for showing higher G.P. rate than that which was declared by the appellant for the year under consideration, then the action of the Assessing Officer to disallow the purchases as bogus inflated is not warranted. The Assessing Officer could not point out that any expenditure

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claimed in the trading or profit and loss account as fictitious or inflated. There must be something more than a mere suspicion to support the estimation. Without finding any defect in the books, addition was simply based on assumptions and presumptions. The Assessing Officer in this case did not disturb the GP rate declared by the appellant but he disallowed on estimate basis Rs.6,90,10,4987- which is 30% of the total purchases of the appellant. If the trading account of the appellant is re-casted on the basis of disallowance of purchases of Rs.6,90,10,498/- and examine the GP rate thereafter, the GP rate would be 34.15% which in the nature of the appellant's business is not practicable. In this case, the AO did not reject the books of accounts of the appellant and invoke the provisions of section 145 of the IT Act, 1961 but by disallowing 30% of the total purchases, the AO has indirectly enhanced the GP rate of the appellant to 34.15%. The disturbance of the GP rate without rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the Assessing Officer has not pointed out any discrepancy pertaining to the quantitative tally on the basis of the record and without those purchases the appellant could not have exported those goods. The Assessing Officer did not bring on record any comparable purchase price to that of the appellant in the similar trade to show that the appellant inflated his purchases. He also did not bring on record any comparable G.P. rates to that of the appellant in similarly placed business. If there was any claim pertaining to purchase by the

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appellant that remained unverifiable, the same would constitute a defect in the books of accounts of the appellant and therefore, such books of accounts are liable to be rejected u/s 145(3) of the IT Act, 1961. This view is also supported by the decision of the Hon'ble Supreme Court in the case of JCIT vs. Kachwala Gems 288 ITR 10 (SC). Therefore, the action of the Assessing Officer in not rejecting the books of accounts of the appellant and simply disallowing the purchases on estimate basis is unjustified and unwarranted. It is only after the rejection of books of accounts that the appellants profit or loss can be estimated at a reasonable level and after considering the relevant details and documents on record. Non- rejection of books of accounts by the Assessing Officer amply suggests that purchases by the appellant were found recorded correctly as no discrepancy pertaining to the purchases was pointed out by the Assessing Officer nor there was any material brought by the Assessing Officer to establish that purchases were inflated. In his order in para 3.18, the Assessing Officer did not dispute the purchases made by the appellant. However, according to the Assessing Officer the purchase bills furnished by the appellant were not from the actual suppliers but were procured at inflated prices from persons who the Assessing Officer referred as apparent sellers or entry operators. However, in the case of the appellant the export of all the goods purchased were found to be genuine. Thus without purchase of goods there could not be any export. Further, in the appellant's case, there was an evidence by way of bankers certificate that all the payments relating to purchases were credited to the account of the payees, from whom the purchases were made. Concurrent to the special auditor's report, the Assessing Officer referred two case laws namely CIT vs. La Media (2001) 250 ITR 575, (Delhi) and CIT vs. Sanjay Oil Cake Industries (2009) 316 ITR 274 (Gujarat) and tried to draw a parallel to the facts of the appellant's

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case. In the cases relied upon by the Assessing Officer there was an evidence that their bank accounts were operated by the appellant or their persons, which is not a fact in the present case. Therefore, the case laws relied upon by the Assessing Officer are not applicable to the facts in this case. In this situation, the case laws as relied upon by the AO are not applicable in this case. 15.5 In view of the above facts, the legal provisions and the case laws cited by the appellant and discussed supra, I hold that disturbing the trading account without invoking the provisions of section 145(3} is not justified. I also hold that the disallowance of purchases to the extent of Rs.6,90,10,498/-, which is 30% of the total purchases of Rs.23,00,34,993A, by treating the same as inflated purchases from apparent sellers/entry operators is without any cogent and categorical evidence and based on vague surmises and conjecturers. The disallowance of purchases of Rs.6,90,10,498/- has also resulted into an enhancement of GP rate to 34.15%, which is neither practicable nor possible in the case of export of readymade garments. In substance, the report of the special auditor, relied upon by the AO, estimating 30% of the total purchases as inflated purchases and disallowance thereof is only on the basis of conjectures, presumptions and surmises. In this situation the total purchases of goods has to be accepted because without these purchases 100% export sale is not possible. In view of these facts and circumstances of the case I hold that the AO was not justified in making the addition of Rs.6,90,10,498/- to the income of the appellant. Hence, the addition made by the AO is therefore deleted.” 37. We find no infirmity in the order of LD CIT (A) in deleting the addition on account of purchases made by the assessee of Rs 69010498/-. The Ld.

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CIT (A) has also given almost the similar reasons for the deletion of disallowances. 38. A new dimension was given by the LD DR during the course of hearing before us when he submitted that Income Tax Settlement Commission (ITSC) has passed order under section 245D (4) of the act on 29/07/2013 for assessment year 2009 – 10 to assessment year 2011 – 12 in the case of the assessee along with others. In the said petition, the assessee to avoid unnecessary litigation and to have peace of mind offered additional income of 1% of the total purchases shown in the profit and loss account. In para No. 14 of that order the settlement commission has passed the orders where income of the assessee was assessed at a much higher figure. It was also stated by the Ld. departmental representative that the during the course of Inquiry settlement commission has come to a conclusion that that the books of accounts have been maintained by the assessee only to ensure that they get the export incentives from the government and during the course of Inquiry assessee has failed to verify single purchase transactions. Learned settlement commission has further come to the conclusion that but for getting the cash incentives the assessee would have incurred losses in all the assessment years. Therefore, the settlement commission has come to the conclusion that no prudent businessman would be doing business for incurring losses in successive years. In view of this the result shown in the books of accounts of the applicants are not given

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any cognizance by the settlement Commission and the income of the assessee was assessed at a much higher figure under section 245D(4) of the act. The Ld. DR further submitted that the during the year the assessee has procured goods from same parties from whom the goods have been purchased for AY 2009-10 i.e. assessment years before ITSC, and therefore the same principle may be applied in this case. 39. Against this the Ld. authorized representative submitted that the settlement petition has been filed for buying peace and based on the orders passed for the assessment year 2007- 2008 in case of the assessee. He further submitted that the settlement is made for a specific year and that does not apply to the assessment year 2007 2008 which is in appeal before us. It was further stated that before the settlement commission the assessee produced all the three brokers who sold the goods and they have confirmed that they have sold the goods to the assessee either from the parties or from sub brokers. In view of this, the purchases cannot be said to be bogus. He further submitted that the order passed by the commission solely based on the presumption that no businessmen would do business at the loss. He further submitted that the settlement commission failed to appreciate the fact that most of the export businesses are being carried on the benefit of export incentive and same is considered as part of the profit. He further argued that settlement commission could not find any single instance where the purchases are found to be inflated or higher than the market rates and

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in absence of such findings it cannot be said that the purchases are not at the correct rate. Regarding purchases he submitted that the assessee has conclusively established that the material has been purchased by it from the brokers which was stand of the assessee from the day one and not directly from the parties and therefore the assessee produced the brokers before the investigating authorities and they have given their statement and confirmed that they have sold the goods to the assessee. He submitted that as the doubts have been expressed on the bills through the goods procured by the sub brokers and for goods supplied to the assessee and therefore only to buy the peace the assessee has offered 1% of such purchases as additional income of the assessee. That admission before the settlement commission cannot be used again the assessee to presume that the purchases shown by the assessee are bogus. In view of this his submission was that that the order of the settlement commission does not bind the assessee for the assessment year 2007- 2008 and same cannot be applied to the facts of the present case. 40. We have carefully considered the rival contentions on this issue. We have also perused the orders of the settlement commission in case of the assessee along with others. The ITSC has decided this issue vide para No. 14 onwards of its order as under:-

“14. Conclusion We have considered the arguments and the submissions of both the applicants/A.R and CIT(DP)/CJT carefully and have come to the conclusion that the Books of Accounts have been kept by the

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applicants in both the cases namely Shri Inderpal Singh Wadhawan & M/s. Vardaan Fashion only to ensure that they get the export incentives from the Government. As mentioned earlier, despite of giving several opportunities the applicants have foiled in verifying even a single purchase and in fact the A.R conceded this fact during the course of hearing. Similarly, as regards the cash credits the money has been routed through number of channels and it appears that the accounts are more like running current accounts. Various accounts of the sister also been created for this purpose. This conclusion is further fortified by the fact that but for getting the cash incentives , in cases of the both the applicants they would have incurred losses in all the assessment year under consideration as is evident from the following chart:- Inderpal Singh Wadhawan Asst.Year Purchase Sales Loss 2009-10 33,596,736.00 33,575,885.00 20,851.00 2010-11 155,100,604.00 104,700,642.00 50,399,962.00 2011-12 J 111,864,630.00 97,549,684.00 14,314,996.00

M/s. Vardaan Fashion • Purchases Sales Loss Asst.Year 2009-10 214,165,520.00 203,367,697.00 10,797,823.00 2010-11 210,715,897.00 203,163,763.00 7,552,129.00 2011-12 102,981,805.00 102,057,667.00 924,133.00

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Vardhan Fashions Asstt, tear Total return Additional Total income Cash incentive Addition made income income including income received u/s 245D(4) disclosed as disclosed before per SOF settlement commission 2009-10 3644690 2141655 5787345 23206348 17420003 2010-11 4340093 2107159 6747252 20170600 13723348 2011-12 2337789 1029818 3367607 10372439 7004832 Total 10322572 5278632 15601204 53701204 38148183

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CIT. Therefore the CIT concluded that the broker was operating 5-6 bogus firms from his own address. The above finding was reached for assessment year 2008-2009. During the course of examination the broker has not stated at all that he has not supplied the goods to the assessee from those parties. All those facts mentioned were about the address of those parties as well as the confirmation of provided by those parties. Furthermore the statement is all about assessment year 2008- 2009 and there is no averment by this broker about not supplying goods to the assessee for assessment year 2007 -2008. Similarly another broker Mr. Rapinder Singh was also examined wherein he stated that he has only facilitated the sale and purchase of material and he used to introduce the seller and purchasing parties and would get the commission. The purchaser used to pay directly to the seller and broker has no role in payment again materials sold. He provided the names of 23 parties who supplied goods to the assessee however he could not provide address of any of these firms. The conclusion about his statement by the CIT were similar to what were made in case of Mr. Sumit Arora. 3rd broker Mr. Savinder Singh Bhatia was also examined wherein also he stated that he has not supplied him goods but he was the broker of the parties who were selling goods to the assessee. His statement was similar to the statement of Mr. Rapinder Singh. In para No. 6.4 it was also noted by the settlement commission that these persons are presented as a broker in the in the current proceedings

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however during the assessment proceedings for A Y 2008 – 09 they were presented as real sellers. Furthermore as per pair of 6.4 of the order of the settlement commission it is to be noted that as in assessment year 2007- 2008 these parties proved to be nonexistence and the purchases are proved to be bogus and therefore it was the opinion of the CIT before ITSC that for this year too the parties are bogus. Further the CIT before ITSC in his letter dated 29th of may 2013 a stated that assessee has declared a very low GP rate and therefore he has given the details of 8 comparables for demonstrating that the gross profit of the assessee is not at all according to the industry and trade standards. We have carefully perused that statement also where in the column No. 5 in the nature of business of the persons are stated. We have perused that column and found that all the 8 comparables that has been cited by the CIT before the settlement commission are manufacturer of garment for export and sale in local market. We find that assessee is a Trader and he is not a manufacturer and therefore the gross profit shown by a manufacturer cannot be compared with the trade. Furthermore the settlement commission was also of the opinion that gross profit of the assessee is negative, if these export incentive received by the assessee is ignored, no prudent businessman would be doing the business in loss. We have already stated earlier that that export incentive receivable by the assessee is always considered to be the part of the profit that an assessee would be earning if the goods are exported and therefore we are of the

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view that the gross profit of the assessee should be ascertained only after taking the export incentive into consideration. Further in the order of the settlement commission we do not find any assertion/finding by the CIT investigation whether the prices at which the goods are purchased at inflated prices. It is not denied that assessee has not exported the goods and has not earned the export incentives on such exports. It is also not denied that that foreign remittance on export of goods is also received through banking channel. Even otherwise the order of settlement commission in the case of the assessee pertains to assessment year 2009 – 10 to 2011-12 for which the application for settlement of the case was made. Appeal before us is to be adjudicated for assessment year 2007 - 2008. It is an admitted position that „settlement of case‟ and the „assessment of the income‟ of an assessee operate under two different provisions of the income tax act having their own procedures and statutory rights vested in the parties. Separate benefits are conferred on the assessee in case of settlement of cases and therefore there may be 101 reasons for which assessee opts for that route. However in the process of settlement of the case assessee foregoes several of its rights to get the cases settled, that does not mean that whatever is foregone would go against the assessee for the purpose of assessment of his income for all together different years. For the above stated reason we are of the view that that order passed by the IT SC does not have any implication on the present appeal as (1) it does not deal with the any facts related to

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the assessment year under appeal, (2) the price paid for the purchase of goods is not found to be inflated, (3) for the purpose of determining the profit from export of goods export incentives receivable by the assessee have been excluded, which according to us is one of the factors which determines the profitability of the export of goods and (4) the comparables stated are manufacturer and sellers of the garment where as the assessee is a traders in the garments. 42. For the reasons stated in above paragraphs we do not find any infirmity in the order of Ld. CIT (A) in deleting the disallowance on account of bogus purchases of Rs. 6 9010498/-. We are also of the view that the order of the settlement commission past in case of the assessee for assessment year 2009 – 10 and 2011 – 12 does not have any implication on our decision in confirming the order of the Ld. CIT (A) in deleting the disallowance. In the result ground No. 1 and 4 of the appeal of the revenue is dismissed. 43. The 2nd ground of the appeal was against the order of CIT (A) in deleting the addition of Rs. 61546908/- on account of unexplained unsecured loans. During the course of assessment proceedings assessing officer noted that assessee has obtained interest free loan from 6 parties amounting to Rs. 6.15 crores as under :-

a) M/s.Arun Textiles Rs.50,10,000/- b) M/s. Deewana Dairy Rs.2,42,60,000/- c) M/s. KartikAgency Rs. 71,95,000/- d) M/s. 'Rups Kraft Inc. Rs.25,10, OOO/- e) M/s, Hanuman Enterprises Rs.2,05,71,908/-

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f) M/s. Super Veg. Oil Pvt Ltd. Rs.20.00.000/- Total Rs.6,15,46.908/-

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report by the Ld. assessing officer Ld. CIT (A) deleted the addition of Rs. 6.15 crores. Therefore assessee is in appeal before us on this issue. 45. Before us the Ld. DR submitted same arguments which were made for the purpose of bogus purchases. He vehemently contended that the most of the depositor are also the suppliers to the assessee which have already been doubted. He raised all those contentions which were raised by him to show that that if the suppliers are non-existent similarly the parties who deposited the money with the assessee are also non-existent. He further submitted that the transactions are also adequately demonstrating that that the parties are not creditworthy to deposit the sum with the assessee and further the genuineness of the transactions have already been doubted by the assessing officer and therefore the addition has wrongly been deleted by the Ld. CIT (A). 46. Learned authorised representative of the assessee‟s submitted that the copy of the PAN card duly certified by the ITD portal was submitted before the assessing officer to show that PAN are correct. He further submitted that one individual may have more than one proprietary concerns and therefore just to disbelieve transactions when a person has more than one proprietary concern is not correct. He further submitted that Ld. assessing officer has wrongly stated that there are cash deposits in the accounts of the parties before issuance of cheque to the assessee. He submitted that there is no cash deposit in the bank accounts of the depositors. He further submitted that more than one PAN and parties not

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depositing it with the bank cannot be found fault of the assessee for the purpose of this addition. He further stated that that the transactions have been made through proper banking channels, the loan amounts have been repaid also by cheque and in case of super Veg Oil Private Limited it is the assessee who has given loan to the party and not that party has given loan to the assessee. In case of other parties he submitted that these are the advances given to those parties for the supply of goods which have been received back during the year, and therefore are not loans. He further submitted that that the assessee had business relationship with the some of the parties as they were suppliers to the appellant. Their purchase transactions are also reflected in the books of accounts of the assessee. He further took us to para No. 9 of his written submission wherein he has submitted the conformations of the parties showing their PAN and addresses, in case of loan transactions the bank account of those parties were also submitted. He further relied on decisions of Hon‟ble Delhi high court in case of CIT versus Vrindavan farms P Ltd dated 12.08.2015 for the reason that low income cannot be the sufficient ground to dispute about the creditworthiness of the loan providers. To buttress the claim that once the assessee has repaid the loan and the Department has accepted the repayment then genuineness of the loan cannot be doubted he relied upon the decision of Hon‟ble Gujarat High Court in case of CIT versus Ayachi Chandresekhar N [221 Taxman 146].

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“21. I have considered the facts of the case, written submissions of the appellant, AOs comments thereon and appellant's rejoinder thereto. The written submissions as well as the additional evidence produced by the appellant during the appellate proceedings were provided to the Assessing Officer for examination and to offer his comments. However, I find that the Assessing Officer instead of examining the additional evidence produced on the issue merely reiterated and reproduced the assessment order. The remand report is nothing but a repetition of the assessment order and the assessment order is nothing but an incorporation of the special auditor's report. The Assessing Officer did not examine or verify the contents of the additional evidence nor the written submissions and bring out any fresh material on record contradictory to that of the appellant. Under these circumstances, I have to decide the issues raised in the grounds of appeal on the basis of the reasons given out by the Assessing Officer in his order while making the impugned additions, submissions made by the appellant in the course of the appeal proceedings. 21.1 On perusal of the material on record, I find that the appellant filed the list of the creditors along with their confirmations. The Assessing Officer mentioned in his order, that some of the PANs

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were invalid but he did not categorically specify as to which creditor's PAN was invalid. The Assessing Officer made a general and vague observation which cannot be made the basis for addition u/s 68 of the IT Act, 1961. Even during the remand proceedings, the Assessing Officer did not point out as to which creditor whose PAN furnished by the appellant was not valid. The Assessing Officer's observation that one particular creditor was shown as proprietor of many business concerns has no relevance to the present case and it is a passing and casual comment without bringing out any material on record in favour of revenue. The law does not bar any person from conducting business in diverse fields or under different names when a person showed to the authorities his status as a "proprietor" and there is nothing unusual or astounding element in it and this cannot be the basis of addition in the case of the appellant. Hence, this observation of the Assessing Officer cannot be made as a basis for the addition in the appellant's case. The Assessing Officer also did not point out any specific name out of the creditors list who did not have the capacity to advance the loan. Without any material on record, the Assessing Officer made a vague observation that many creditors did not have substantial income to extend large amount as loans/advances to the appellant. Without bringing any adverse material on record, or without pointing any specific instance where the appellant did not discharge the onus cast on it the Assessing Officer was not justified to quote vague reasons and to hold that the appellant did not discharge satisfactorily the primary onus cast upon it under u/s 68 of the IT Act, 1961. All the creditors are legal entities and filed their confirmations with their PAN, identity proof and bank statements with proof of filing of their returns. What is required here was that the Assessing Officer ought to have issued summons u/s 131 of the IT Act, 1961 to the creditors and conducted a proper enquiry before making any addition u/s 68 of the IT Act, 1961. On perusal of the details filed by the appellant it is seen that the appellant received the loans and deposits by way of cheques and most of them were repaid in the subsequent years. There may be certain differences like the name, year etc. and the person may be operating his activities in the name of different proprietorship concerns whereas the PAN may be either on the individual name or proprietorship name. The mismatch of details on the PAN cannot be a reason for holding that the parties are non-genuine. When a non- existent PAN is reported then there is a requirement more so on the

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Assessing Officer to conduct complete verification of such persons. On perusal of the details pertaining to the above six parties mentioned in the order by the Assessing Officer, I find that it is not a case of receipt of loan in the case of M/s. Super Veg. Oil Pvt. Ltd. but a case of recovery of loan. In fact, vide cheque no.486720 dated 15.11.2006 the appellant extended a loan of Rs.20,00,000/- to M/s. Super Veg. Oil Pvt. Ltd. and it was received back by the appellant on 19.1.2007 through an account payee cheque. In support of the submissions the appellant placed reliance on the judgment of the Hon'ble Calcutta High Court in the landmark case Shankar Industries Vs. CIT (1978) 114 ITR 689 (cal.) followed in C. Kant & Co. Vs. CIT (1980) 126 ITR 63 (cal.) wherein the Hon'ble Court has laid down three ingredients & conditions to prove the credits appearing in the assessee's books of account i.e. (i) the existence and identity of the creditor, (ii) the genuineness of the loan/deposits received and (iii) the credit worthiness of the creditors. The appellant has proved the identity and existence of the creditors beyond doubt. All the loans/deposits were received through account payee cheques. The maximum loans/deposits were also refunded by the appellant in subsequent year. In this situation, the conditions no. (ii) & (iii) i.e. genuineness of the loan and credit worthiness of the creditor have also been established by the appellant. 21.2 According to section 68 of the IT Act, 1961, where any sum credited in the books of accounts of the assessee maintained for any previous year, and the assesses offers no explanation about the nature and source of the same or the explanation offered by the assessee is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee for that previous year, Existence of books of accounts of the appellant is not denied by the Assessing Officer, which is a prerequisite condition for making addition u/s 68. As per section 2(12A) of the IT Act, 1961, books include ledgers, day books, cash books, whether kept in written form or as print outs of data stored in floppy, disk, tape or any other electromagnetic data storage device. In Central Bureau of Investigation vs. V.C. Shukla (1998) 3 SCC 410, the Hon'ble Supreme Court has held that "book" ordinarily means a collection of sheets of papers or other material blank or written or printed fastened or bound together so as to form a material as a whole.

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21.3 In present case, the Assessing Officer did not reject the appellant's books of accounts but levied tax u/s 68. Section 68 is an independent and deeming provision and would be applicable to the appellants case in case he failed to offer an explanation pertaining to the particular receipt / credit appearing in the books of account or if explanation given by the appellant is found to be not satisfactory in the opinion of the Assessing Officer. However, on considering the material on record, I find that the Assessing Officer did not make any enquiries or conduct further enquiries based on the confirmations filed by the appellant. Even during the remand proceedings summons u/s 131 was not issued to the loan creditors (only six parties). Section 68 of the IT Act, 1961, empowers the Assessing Officer to make enquiry regarding the credit. If he is satisfied that the entries are not genuine, the Assessing Officer has every right to add these credits as income. But before rejecting the appellant's explanation, and in the absence in the enquiries the addition made by the Assessing Officer cannot be sustained. 21.4 Prima facie the onus is always on the appellant to prove the credit entry found in the books of accounts of the appellant. In the present case, the appellant discharged its onus by furnishing the confirmations giving the details like address, PAN, Bank Statement and assessment details. These details itself proves the identity of the creditor, capacity of the creditor and the genuineness of transactions in question. Without making further enquiries, disbelieving the evidence furnished by the appellant is not justified, as the appellant discharged its onus. In the opinion of the Assessing Officer, the explanation offered by the appellant is required to be based on proper appreciation of material and other attending circumstances available on record. Evidence produced by the appellant cannot be brushed aside in a casual manner. The conditions for applicable for Section 68 are (a) ) Existence of books of accounts maintained by the appellant. (b) Credit entry in the books of accounts (c) The absence of satisfactory explanation by the appellant above the nature and source of the sum credited.Section 68 requires that the Assessing Officer must be satisfied that the explanation offered by the appellant is genuine. When the law has given the Assessing Officer a discretion and it is this satisfaction upon which the genuiness has to be decided, his inference on the basis of the facts filed by the appellant is finding of fact. Inspite of filing the confirmations, the Assessing Officer did not verify the creditors and the explanation offered by the appellant is not a sufficient cause for rejection of explanation.

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21.5 It is also found that neither at the time of the assessment proceedings, nor during the remand proceedings the Assessing Officer gave sufficient time and opportunity to the appellant to put forth his version. In tandem with the Special Auditor's report, the Assessing officer issued a show cause letter dated 12.05.2010 asking the appellant to show cause as to why an amount of Rs. 6,15,46,9087- should not be treated as income of the appellant. In this show cause letter, the Assessing Officer did not confront the appellant with the material available in his possession if any. The Assessing Officer is entitled to reject the explanation when he is in possession of some other positive evidence contrary to that to falsify the appellant's case. The Assessing Officer arbitrarily rejected the appellant's explanation without giving an opportunity to the appellant to substantiate his assertions. It is also a point to mention that the Assessing Officer has not rejected the books of Accounts of the appellant. Non-rejection of books of accounts or unchallenged books of accounts are prima facie proof of correctness of entries made therein and in this case, there can not be a presumption.In view of the above discussion, it is seen that the appellant has fulfilled all the ingredients and conditions laid down in Section 68 of the IT Act, 1961. 21.6 The appellant further relied on the following case laws: (a) Anil Rice Mills Vs. Commissioner of Income Tax (2006) 282 ITR 236 (All) (b) Commissioner of Income Tax Vs. Tania Investments (P) Ltd. (2010)322 ITR 394 (Bom) (c) Commissioner of Income Tax Vs. Micro Melt (P) Ltd. (2010) 327 ITR 70 (Guj.) (d) Nemi Chand Kothari Vs. Commissioner of Income Tax & ANR. (2003) 264 ITR 254 (Gau).

21.7 In the light of the facts and circumstances of the case as discussed above, legal provisions and the case laws cited and discussed in this order. I find that the addition made by the Assessing Officer u/s 68 was on presumption and surmises with vague and general observations. All the transactions were routed through banking channels. Therefore, after considering all the facts on record of the case, I hold that the addition made by the Assessing Officer by treating the above amounts aggregating to Rs.6,15,46,908/- as unexplained credits u/s 68 of IT Act, 1961 is

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unjustified. The Special auditor and the Assessing Officer also checked the books of accounts and did not point of any that these transactions were not found recorded in the books of accounts of the appellant. The provisions of section 68 of the IT Act, 1961, does not provide any room for disallowances until the credit entries are not found recorded. The specific credit entry has to be identified which remained unexplained to the satisfaction of the Assessing Officer and which was not found recorded by the appellant in its books of account. In the course of the appeal proceedings appellant furnished the copies of PAN cards of all the parties with confirmation letters. These were provided to the Assessing Officer for examination and comments. Even in this remand proceedings, the Assessing Officer did not verify/examine the creditors but reproduced the same version which was already stated in the assessment order dated 24.6.2010. In view of this discussion above, the addition made by the Assessing Officer amounting to Rs.6,15,46,908/- is therefore deleted.”

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that the onus is already been discharged by the assessee by providing the confirmation of the parties and in case of loan transactions the bank account of those parties. All these findings of the Ld. CIT (A) remained unassailed before us. No instances were pointed before us none we could find in the assessment order or in the special audit report where cash has been deposited in the bank account of the suppliers/lenders before issuing cheques to the assessee. The reliance placed by the Ld. AR‟s on the decision of jurisdictional High Court regarding low incomes of the lender/depositors/suppliers cannot be the basis for making any addition under section 68 by doubting the genuineness is appropriate. In view of the above facts, we do not find any infirmity in the order of the Ld. CIT(A) in deleting the addition under section 68 of Rs. 6.15 crores. In view of this ground No. 2 of the appeal is dismissed. 49. The 3rd ground of appeal is against the order of Ld. CIT (A) in deleting the addition of Rs. 17.99 Lacs on account of negative cash balance. The brief facts of the transactions are that the assessee had cash balance as at 31/10/2006 of Rs. 400384/- in its cash book. On 1/11 2006 and entry was passed for the payment to Mr. S S wadhwan of Rs. 22 lakhs. Three transactions of cash withdrawals were shown through 3 cheques from banks, however same were shown by the bank statement of the assessee as cleared on subsequent dates. Therefore according to the Ld. assessing officer there was a deficit of cash resulting into negative cash balance of Rs. 17.99 Lacs on 01/11/2006 and therefore the addition was made .

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Assessee submitted before the assessing officer that partner was looking after the banking transactions of the assessee and his books of accounts the money is deposited showing correct dates however by mistake the accountant of the assessee has recorded the above receipt through oversight on different dates. Assessee submitted that it is a mere human error and no adverse inference may be drawn. 50. Before us the Ld. departmental representative relied upon the order of the Ld. assessing officer and submitted that on that particular that there was a deficit in the cash book of the cash balance and therefore the addition has rightly been made by the Ld. assessing officer which is been wrongly deleted by the Ld. CIT(A). 51. Against this the Ld. authorised representative of the assessee relied upon the order of the Ld. CIT (A) and further submitted that that when the money is deposited in the books of the partner of the firm‟s who was looking after the business of the partnership firm has correctly recorded the transactions and by mistake the transactions have been recorded in the books of the firm by the accountant which was further rectified by submitting the corrected cash book and the addition has resulted only because of the human error. He further submitted that that in fact the money which is deposited in the cash book of the partner of the firm which was also before the assessing officer and the money has not been utilized on 1/11 2006 but subsequently and therefore the addition made by the Ld. assessing officer is incorrect.

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“27. I have considered the facts of the case, submissions of the appellant and the remand report of the Assessing Officer and the rejoinder of the appellant thereto. I find that there was a mistake on the part of the Accountant while passing the entry, which was a mere human error and no adverse inference should be drawn from such a human error. I have also perused the copies of cash book of the appellant and that of the partner Sh. Satvinder Singh and the copy of the ledger account of Sh. Satvinder Singh in the books of the appellant and ledger account of

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the appellant in the books of Sh. Satvinder Singh and did not find a wrong entry in them. Even in the remand report, the Assessing Officer stated that the withdrawals were made on 08.11.2006, 04.11.2006 and 10.11.2006. The receipt on these dates were correspondingly entered in the cash book of Sh. Satvinder Singh, the partner of the Appellant's firm. However the Assessing Officer did not accept this fact in his report on the basis of material on record that the payment was made on the abovementioned dates and there was no negative balance as on 01.11.2006. Therefore, the addition made by the Assessing Officer on the basis of a human error caused on the part of the Accountant cannot be said to be justified. Accordingly, the addition of Rs.17,99,6167- made by the Assessing Officer on account of negative balance is deleted and this ground of appeal is allowed.” 53. We have also perused the relevant submission made before us. The assessee has produced before the Ld. 1st appellate authority as well as before the assessing officer the cash book of the partner in whose books of accounts the amount of cash was deposited. The cash was deposited in the account book of that partner on the respective dates on which the amount was withdrawn from the bank accounts of the assessee firm. It is not the case of the revenue that the person in whose books of accounts the cash was deposited has utilized this cash on dates prior to the withdrawal of the cash from the bank account of the assessee firm. The addition could have been sustained only in the case when that partners would have utilized the said cash before it is withdrawn from the bank account of the assessee. That is not the case. Therefore no further motives can be attributed to the wrong accounting entry date mentioned

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by the accountant while recording the transactions in the books of accounts of the assessee. In view of this we do not find any infirmity in the order of Ld. 1st appellate authority in deleting the above addition on account of negative cash balance of Rs. 17.99 Lacs. In the result ground No. 3 of the appeal of the revenue is dismissed. 54. In the result appeal of the revenue In ITA o 950/Del/2013 is dismissed. 55. Now we come to the appeal of the assessee wherein 4 effective grounds were raised. Before the commencement of the hearing the Ld. authorised representative of the assessee submitted that the ground No. 4 of the appeal on the issue of validity of the reference made under section 142 (2A) of the income tax act 1961 of the act is not pressed. In view of this we dismiss ground No. 4 of the appeal of the assessee. 56. Ground No. 1 of the appeal of the assessee is general in nature and therefore same is also dismissed. 57. Ground No. 2 of the appeal of the assessee is against the order of the 1st appellate authority in upholding the disallowance of Rs 10966600/- under section 40 A (3) of the income tax act 1961. The brief facts of the case are that as per the special audit report it was found that appellant has made payment of Rs. 5.43 crores to its suppliers in respect of purchase of goods by pay orders instead of account payee cheque or bank drafts as required under section 40 A (3 ) of the act. It was also stated that the Pay orders were issued by the appellant were not even crossed pay orders. As per the assessing officer it was in contravention of

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the provisions of section 40 A (3 ) of the act. Accordingly disallowance of 20% of Rs. 5.43 crores amounting to Rs. 1.08 crores was made. The assessee carried the matter before the Ld. that 1st appellate authority who in turn confirmed the disallowance. Therefore the assessee is in appeal before us. 58. Ld. Authorised representative submitted before us that the payments made by the account payee pay orders are equivalent to the account payee bank cheques and therefore the disallowance has wrongly been made and confirmed by the Ld. CIT (A). He also took us to page No. 34 to 42 of the special audit report where copies of those bankers‟ cheques are available. He further relied on decision of the coordinate bench wherein it has been held that even the payments made by the pay orders are equivalent to the payments made by the account payee cheques and no disallowance can be made. 59. Ld. departmental representative relied on the orders of lower authorities and submitted that there is a clear-cut violation of the provisions of section 40A (3) of the income tax act and therefore no infirmity can be found in those orders. 60. We have carefully considered the rival contentions. We have also carefully perused the copies of the banker‟s cheques which shows at page No. 34 of the special audit report. The banker‟s cheque is issued on 31st may 2006 for Rs. 50 Lacs in favour of Penta trade private limited by Indian overseas bank on account of M/s Vardan fashions. This bankers‟

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cheque is signed by the manager of a particular bank. It is also not transferable and valid for six months only. We are surprised by the findings of the lower authorities on payment by assessee through these instruments in making disallowance u/s 40A (3) of the act. In fact banker‟s cheque is issued by the bank of the remitter which is signed by the manager of the bank only if there is adequate bank balance in the account of such person. The bankers cheque is insisted by the parties because of the reason that it cannot be dishonoured. It also goes into the bank account of the person in whose name it is drawn. Payment made by the bankers cheque is akin to payment by the account payee cheques. Bankers' cheque are issued by the Bank to customers for making local payments like payment of telephone / electricity bills, payments to other accounts in other banks etc. Banker's Cheques are negotiable instruments payable to order and attract all provisions applicable to an order cheque and are valid for three months from the date of issue and in genuine cases may be revalidated. In view of this we reverse the finding of the Ld. CIT (A) in confirming the disallowance under section 40A (3) of Rs. 1.08 crores. In the result ground No. 2 of the appeal of the assessee is allowed. 61. Ground No. 3 of the appeal of the assessee is against the order of the 1st appellate authority in upholding the disallowance of Rs. 287451/- on account of bank charges. The Ld. assessing officer has disallowed this payment for the reason that the bank charges were paid for non business

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purposes. It was also noted that that assessee issued cheques from its own account maintained with Punjab national bank in its own favour and deposited the same in its other accounts maintained with Indian overseas bank. Subsequently this amount was paid to the various parties as loans and advances without charging any interest and those loan accounts got squared up later on. On appeal before the 1st appellate authority this disallowance was confirmed as appellant was not able to establish that the banking judges which were paid for discounting of the cheques were for the business purposes of the assessee. The assessee admitted before the 1st appellate authority that as and when the partner urgently required the funds for his personal leads the appellant from transferred the funds from the Punjab national bank account to its Indian overseas bank account for issuing the same to the partners. Therefore the assessee is in appeal before us contesting this disallowance. 62. The Ld. authorised representative reiterated the submissions that he has made before the lower authorities. Ld. departmental representative relied on the orders of lower authorities. 63. We have carefully considered the rival contentions. The Ld. assessing officer has made the disallowance for the reason that assessee could not established before him that the expenditure of bank charges have been incurred for the purpose of the business. Before the 1st appellate authority the assessee himself admitted that that the funds are used for

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the private use of the partners. Before us no new facts or arguments have been raised. In view of this we do not find any infirmity in the order of the 1st appellate authority in confirming the disallowance of the bank charges of Rs. 287451/-. In the result ground No. 3 of the appeal of the assessee is dismissed. 64. In the result appeal of the assessee is partly allowed. Order pronounced in the open court on 08/07/2016. -Sd/- -Sd/- (I.C.SUDHIR) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08/07/2016 A K Keota Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

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