Bhavnesh Saini, J.M.: This appeal by assessee is directed against order of CIT(A), Jammu, with headquarters at Amritsar, dt. 22nd March, 2002, for asst. yr. 1998-99 on following grounds: "1. (a) That learned CIT(A), Amritsar, has wrongly confirmed addition of Rs. 7,66,519 under s. 68 while considering sale of VDIS jewellery to M/s Bishan Chand Mukesh Kumar Saraf as bogus. (b) That learned CIT(A), Amritsar, has wrongly confirmed addition made on basis of information collected on back of assessee and not confronted to assessee. That learned CIT(A) has wrongly confirmed action of learned AO for reducing long-term capital loss from Rs. 2,13,512 to Rs. 31,696." We have heard learned representatives of both parties and gone through observations of authorities below. Briefly facts are that assessee filed return of income and is stated to be in business of trading in shoes. GP rate was better as compared to preceding assessment years. AO on perusal of computation of income filed by assessee found that assessee inter alia, is claiming carry forward of capital loss of Rs. 2,13,512 on account of sale of jewellery claimed to have been disclosed in VDIS Scheme. assessee has sold 98 gold coins of Rs. 3,52,800, sold gold jewellery of Rs. 4,13,719 and sold 14 kgs. of silver for sum of Rs. 1,05,007. After applying indexation to cost of acquisition, assessee claimed loss carry forward in sum of Rs. 2,13,512. It was submitted before AO that silver was sold to M/s Bhagwan Dass Vinod Kumar Saraf at Amritsar who has also confirmed purchase of silver from t h e assessee in response to query letter issued by AO It was also submitted that gold coins and gold jewellery was sold to M/s Bishan Chand Mukesh Kumar Saraf at Delhi. AO further observed that other family members of assessee have also sold jewellery to M/s Bishan Chand Mukesh Kumar Saraf at Delhi. registered letter was issued to that party on 8th Nov., 2000 whereby it was required to confirm purchase of jewellery. Since no reply was received, reminder was issued by speed-post on 24th Nov., 2000. Again letter through speed-post was issued on 11th Dec., 2000 and in alternative, commission under s. 131 of IT Act was issued to office of DDI, Delhi, to make enquiry and after verifying books of parties give findings of genuineness of purchase of jewellery from assessee. However, subsequently confirmation was received by AO from M/s Bishan Chand Mukesh Kumar Saraf on 22nd Feb., 2001. However, commission filed report that said party is not co-operating. AO found that signature of Shri Bishan Chand on vouchers and confirmatory letter do not tally. AO finding time limitation decided issue on basis of material on record. AO held that sale is bogus as party is not traceable at Delhi even though confirmation has been received by him. AO accordingly was of view that assessee has introduced his own money and made addition of Rs. 7,66,519 in respect of gold coins and jewellery under s. 68 of IT Act. loss of Rs. 2,13,512 as claimed by assessee was also reduced to Rs. 31,696 only on account of sale of silver. addition was challenged before CIT(A) and it was briefly submitted that gold jewellery and gold coins were shown in returns earlier which were disclosed in VDIS Scheme which is accepted by CIT(A). Copies of same are also filed. It was also explained that gold jewellery and gold coins were sold to M/s Bishan Chand Mukesh Kumar Saraf at Delhi, payment was received through cheque drawn on PNB. Sale vouchers were also filed before AO. It was further submitted that AO only asked for examination of assessee and his son and their statements have been recorded in which they have confirmed to have sold jewellery to aforesaid Delhi party. It was further submitted that no other query was raised by AO. It was further submitted that AO made certain inquiries at back of assessee which was not confronted to assessee and moreover in this case purchaser have confirmed transaction with assessee and filed confirmation report directly in office of AO. It was further submitted that report of DDI, Delhi, was never confronted to assessee. It was further submitted that AO made addition mainly on reasons that signatures on vouchers and confirmatory letter did not tally and parties were not traceable, but such grounds would not exist as party has confirmed transaction with assessee. CIT(A), considering submissions of assessee and material on record was, of view that AO has not raised any enquiries regarding existence of M/s Bishan Chand Mukesh Kumar Saraf at assessment stage and has made enquiries directly from concerned party by issuing letter and commission. CIT(A) on basis of material on record also found that purchasers M/s Bishan Chand Mukesh Kumar is assessed to tax at Delhi with ITO, Ward-10(2), New Delhi, and even perusal of Inspector s report reveals that purchaser existed at relevant premises and on basis of enquiry conducted by Inspector, purchaser was still functioning from premises where letters were sent by AO. CIT(A) also observed that letters issued by AO did not return back undelivered to show that purchaser was served with letter issued by AO. CIT(A) on basis of these material on record was of considered view that these facts kly indicate existence of purchaser to whom assessee claimed to have sold jewellery. CIT(A) was also of view that assessee received payment through cheque. CIT(A), however, observed that purchaser further has failed to appear before Investigation Wing to confirm purchases. purchasers had not confirmed purchases made by them to AO. CIT(A), therefore, was of opinion that case of assessee is not free from doubt. CIT(A) also observed that even upto appellate proceedings, no confirmation has been received by AO. CIT(A) in this view of matter dismissed appeal of assessee. learned counsel for assessee reiterated submissions made before authorities below and submitted that purchaser has confirmed purchase of gold jewellery and coins directly to AO which is also confirmed by AO in assessment order and other enquiries were conducted by AO at back of assessee and, therefore, such material cannot be read in evidence against assessee. He has further submitted that report of Inspector revealed that purchaser existed at given address and is also assessed to income-tax. He has further submitted that AO without any basis compared signature which has no evidentiary value. learned counsel for assessee relied upon following decisions: (1) Kishinchand Chellaram vs. CIT (1980) 19 CTR (SC) 360: (1980) 125 ITR 713 (SC) (2) Sona Electric Co. vs. CIT (1984) 43 CTR (Del) 287: (1985) 152 ITR 507 (Del) (3) Chiranji Lal Steel Rolling Mills vs. CIT (1972) 84 ITR 222 (P&H) (4 ) Jay Frozen Foods & Ors. vs. ITO (1992) 196 ITR 724 (Mad). learned counsel for assessee further submitted that CIT(A) has given contradictory finding. On other hand, learned Departmental Representative relied upon orders of authorities below and submitted that authorities below were justified in making addition against assessee. We have considered rival submissions and material available on record. There is no dispute that assessee owned and possessed gold coins and gold jewellery and silver which were disclosed under VDIS Scheme. assessee sold silver, which is not in dispute as is confirmed by purchaser. statements of assessee and his son were recorded in which they have confirmed to have sold gold jewellery with coins to M/s Bishan Chand Mukesh Kumar. assessee claimed that AO did not make any other query from assessee. CIT(A) affirmed statement of assessee by perusing record that AO during assessment proceedings has not raised any enquiry regarding existence of purchaser and made enquiries directly from purchaser by issuing letters. AO issued letters to purchaser party of Delhi to confirm purchase/sale of gold jewellery and coins. M/s Bishan Chand Mukesh Kumar Saraf, Delhi, confirmed transaction with assessee by sending confirmatory report to AO directly and this fact is admitted by AO in assessment order. However, CIT(A) gave contradictory finding in appellate order by observing that even upto date of appellate proceedings, no confirmation has been received by AO. It is admitted fact that report of Inspector indicates that purchaser existed at given address and that same is also assessed to income-tax, as is observed by CIT(A) in appellate order. assessee filed sale bill before AO and showed that payment of sale consideration is received through cheque. Therefore, this evidence on record clearly establish that assessee has sold gold jewellery and coins to M/s Bishan Chand Mukesh Kumar, who has also confirmed this fact to AO in confirmatory letter. assessee has, therefore, discharged onus of proving that he has sold gold jewellery and gold coins to purchaser. On other hand, AO has not brought any evidence on record to contradict evidence led by assessee. AO has made certain queries directly from concerned party through issue of letters as well as through DDI, Delhi. letters of AO did not return unserved as (sic-which) indicated that party existed at given address. purchaser also confirmed directly purchase of gold to AO. Only DDI, submitted in report that party is not co-operating. AO also observed that signature did not tally. However, those materials on record were never confronted to assessee. Therefore, these circumstances considered by AO against assessee cannot be read as evidence against assessee. There is no other evidence available on record to justify findings of authorities below. Hon ble Supreme Court in matter of Kishinchand Chellaram vs. CIT (supra) held that letter from manager of bank through which money remitted was not shown to assessee and, therefore, such evidence is not admissible and cannot be used against assessee. Hon ble Punjab & Haryana High Court in matter of Chiranji Lal Steel Rolling Mills (supra) held that if evidence is collected by ITO then it is his duty to disclose such evidence to assessee and afford him reasonable opportunity of rebutting it. Hon ble Delhi High Court in matter of Sona Electric Co. (supra) held that credit entry in assessee s books of account can be rejected by ITO on cogent grounds. When such grounds are themselves based on no evidence, question of raising presumption against assessee does not arise. Hon ble Madras High Court in matter of Jay Frozen Foods & Ors. (supra) held that "It is settled law that evidence of handwriting expert is very weak piece of evidence. It is not evidence, but it is only opinion. Unlike opinion of fingerprint expert, opinion of handwriting expert cannot be taken with certainty." Considering above discussion and case laws referred to above, we are of view that there was sufficient material available on record to prove that assessee sold jewellery to M/s Bishan Chand Mukesh Kumar Saraf, Delhi. Whatever enquiry was conducted by AO was conducted at back of t h e assessee and even observation with regard to handwriting of assessee also done at back of assessee without giving any opportunity to assessee to explain point, therefore, such evidence is not legally admissible against assessee. Even AO has not made out case that gold jewellery and silver were available with assessee. Hon ble Madras High Court even did not take into consideration report of handwriting expert as it would not lead to certainty but in present case, AO conducted enquiry at back of assessee (and) merely compared handwriting n d made addition against assessee. Therefore, we do not find any justification to sustain addition against assessee. We accordingly set aside orders of authorities below. As result, addition of Rs. 7,66,519 is deleted. ground No. 1 is, therefore, allowed. Ground No. 2 is consequential in nature and AO is directed to give necessary relief to assessee as per our findings above in respect of ground No. 1. As result, appeal of assessee is allowed. *** JAGDISH MITTER v. DEPUTY COMMISSIONER OF INCOME TAX