This appeal by assessee is directed against order of CIT(A), dt. 18th Nov., 2005 which pertains to asst. yr. 1999-2000. Briefly stated, facts of case are that assessee derives income from purchase and sale of agricultural produce and also from Arhat . assessee firm filed its return for this year on 28th Oct., 1999 declaring total income of Rs. 12,539 which was assessed under s. 143(1)(a) on 30th Nov., 1999. Subsequently, AO received information from Sales-tax Department that assessee firm has shown purchases from such concerns, which either did not exit or did not make any sales during relevant period. On basis of this information, AO recorded reasons for reopening and issued notice under s. 148/147 of Act. reasons were recorded by AO that assessee made bogus purchases worth Rs. 6,58,652 and same were not recorded in his books of accounts. Therefore, AO found that income chargeable to tax had escaped assessment. On basis of this reason recorded by AO, assessee was show caused. After hearing assessee assessment under s. 143(3) r/w s. 147 was made by computing total income at Rs. 3,04,510. assessee assailed additions so made by AO in first appeal but only partly succeeded. AO observed that during relevant assessment year, assessee made purchases of Narma from M/s Lal Chand Rai Harish Kumar and M/s Om Prakash Ashish Kumar to tune of Rs. 2,23,018 and Rs. 81,510, respectively. main issue of this appeal relates to sustained addition of Rs. 2,20,000 made by AO on account of unproved purchases amounting to Rs. 2,20,000 allegedly made from M/s Lal Chand Rai Harish Kumar. In sales-tax proceedings. Shri Om Prakash Agarwal, proprietor of M/s Lal Chand Rai Harish Kumar, filed affidavit wherein he deposed that no purchases or sales were made by him during financial year 1998-99 which is relevant to asst. yr. 1999-2000. Similar affidavit was also filed by partner of M/s Om Prakash Ashish Kumar. On basis of this information, AO concluded that purchases allegedly made from these parties were not genuine. AO made further enquiries during assessment proceedings and found that in bank account of above two parties, there were only credit entries and withdrawals were by way of cash. assessee made payment of Rs. 2,23,000 on 8th March, 1999 by way of cheque to M/s Lal Chand Rai Harish Kumar and this cheque was deposited in bank of recipient. It was also noticed that M/s Lal Chand Rai Harish Kumar withdrew above amount by way of self cheque, on reverse side of which it was mentioned that "Rs. 2,20,000 deposited in CA 156 contra entry 100 x 30". Account No. 156 belongs to assessee. From this, AO concluded that sum of Rs. 2.2. lakhs was directly credited in current account No. 156 whereas balance sum of Rs. 3,000 was withdrawn in cash by M/s Lal Chand Rai Harish Kumar. AO recorded statement of asstt. manager of bank under s. 131 on 19th Jan., 2004 and made verification in respect of entry on reverse side of self cheque. asstt. manager stated that sum of Rs. 2.20 lakhs was deposited in current account No. 156 and balance amount was given in cash. According to manager, reverse entry in banking accounting system is known as contra entry. From this factual matrix, AO concluded that M/s Lal Chand Rai Harish Kumar issued self cheque of Rs. 2.23 lakhs and out of which only cash of Rs. 3,000 was paid at counter while remaining sum of Rs. 2.20 lakhs was credited in account of assessee M/s Jagdamba Trading Company. When confronted assessee flatly denied any connection with relevant narration made on reverse side of cheque issued by M/s Lal Chand Rai Harish Kumar. It was further explained that on 18th March, 1999 cash of Rs. 2,20,000 was deposited by assessee in bank from withdrawals earlier made from Bank of Maharashtra. According to assessee, he had credit balance of Rs. 9,394 in his bank account of Bank of Punjab and since he already issued cheque of Rs. 2,23,000 on 8th March, 1999 in favour of Lal Chand Rai Harish Kumar, it was necessary for him to deposit sum in his account in Bank of Punjab. AO verified this fact and finally came to conclusion that facts stated by assessee were correct but information found on reverse side of cheque could not be ignored. From abovementioned facts AO came to conclusion that assessee did not made any such purchases either from M/s Lal Chand Rai Harish Kumar or from M/s Om Prakash Ashish Kumar. Consequently, he made addition of Rs. 3,04,510 under s. 69 of Act. He further held that assessee had actually purchased these items from farmers or other parties and in process saved 2 per cent sales-tax, 2 per cent Mandi tax and 1.6 per cent Arhat expenses. Consequently, he further made addition of Rs. 17,050 being extra profits @ 5.6 per cent on purchases. learned CIT(A), however, deleted addition made on account of purchases from M/s Om Prakash Ashish Kumar, but upheld addition made on account of purchase of Narma from M/s Lal Chand Rai Harish Kumar. assessee has challenged sustained addition of Rs. 2,20,000 as mentioned above. I have heard rival submissions and perused evidence available on record. main thrust of Shri N.R. Mertia is that assessee made payment against impugned purchases through cheque and there is no evidence to prove that assessee received back amount so paid. further submission of learned Authorised Representative is that findings of Commercial-tax Department are that sum of Rs. 2,23,000 was drawn by M/s Lal Chand Rai Harish Kumar through self cheque No. 50890, dt. 8th March, 1999, and, therefore this amount was withdrawn by Shri Rajender Prasad, proprietor of M/s Jagdamba Trading Company, but as per statement of manager of bank, who stated while replying to question No. 6 on 19th Jan., 2004 that it was Rajesh (not Rajender Prasad) who took payment. It was further submitted that alleged contra entry on backside of cheque is not correct narration or in any case not related with withdrawal of amount of this cheque because on 8th March, 1999, in account of M/s Lal Chand Rai Harish Kumar, cheque of M/s Jagdamba Trading Company amounting to Rs. 2,23,000 was credited first and no credit was made in CA 156 after making payment of above cheque. It was further submitted that in account of CA 156, which belongs to assessee firm, opening balance was Rs. 9,394 and on that day assessee deposited Rs. 2,20,000 in cash after withdrawing sum of Rs. 3,50,000 from his bank account with Bank of Maharashtra. It was only after depositing this cash amount that concerned cheque was issued to M/s Lal Chand Rai Harish Kumar and same was debited and, thereafter, cheque No. 50890 issued in self name by M/s Lal Chand Rai Harish Kumar was paid by bank. On other hand, learned Departmental Representative has placed heavy reliance on orders of authorities below. Having gone through rival submissions, in light of available evidence on record, it is crystal clear finding of facts that there is no proof on record that amount of Rs. 2,20,000 was deposited in account of M/s Jagdamba Trading Company a/c. This was amply verified by Department and AO could not make clear-cut finding in this regard. It is also evidently clear from available evidence that impugned addition of Rs. 2,20,000 was made only on account of contra entry narration made on backside of cheque in question. recipient of cash amount etc. is stated to be one Mr. Rajesh and not Rajender Prasad as has been alleged by Revenue. AO recorded statement of asstt. manager of bank in which he has categorically confirmed above facts. But still, AO went on harping same tune that it was Rajender Prasad and not Rajesh. AO could make further investigation in this regard if he so desired but he failed to do so. Except this contra entry on backside of abovementioned cheque, there is no other evidence on record to connect assessee with allegation that it had received back said money. There is no proof of deposit of this amount in account No. CA 156. name of recipient has not been clearly established as proprietor of M/s Jagdamba Trading Company. other facts mentioned b y assessee with regard to withdrawal from one bank and depositing same in relevant bank are found to be correct from available evidence on record, which were minutely examined by me in presence of both parties. I agree that contra entry on backside of cheque may give rise to doubt against assessee but doubt howsoever k it may be, cannot take place of proof of fact. This is not supported by any other evidence on record, in case seller stated in his affidavit that it did not make any sales during relevant year, that too in sales-tax proceedings, and particularly when opportunity of cross-examination was not given to assessee, it is hardly justified to heavily rely on same. It is strange that more often than not Revenue rejects such affidavits filed by assessees in support of their claim but in this case because it suits their version, AO is blindly accepting contents of these affidavits. These affidavits were filed during sales-tax proceedings of seller, which do not have any concern with income-tax proceeding of this assessee. In that view of matter, these affidavits have hardly any evidentiary value against present assessee. I agree with learned Authorised Representative that when Revenue has not disputed purchase in question and it has only disputed purchase from particular party, it is hardly case of unexplained investment. assessee has clearly shown and explained alleged investment. In case seller did not pay sales-tax and Mandi tax, purchase in question cannot be taken as bogus. There are hundred and one reasons for seller to tell untrue facts and unless seller is confronted with by assessee, alleged statements do not have any useful meaning. AO took purchases made by assessee from these parties as fictitious and bogus mainly on. strength of affidavits of these parties tendered before sales-tax authorities. These affidavits and even statement of asstt. manager of bank were never subject-matter of cross-examination by assessee. In these circumstances, decisions of Hon ble Supreme Court in case of Kishinchand Chellaram vs. CIT (1980) 19 CTR (SC) 360: (1980) 125 ITR 713 (SC) and in case of Tin Box Co. vs. CIT (2001) 166 CTR (SC) 509: (2001) 249 ITR 216 (SC) come to rescue of assessee. Hon ble apex Court in these decisions have categorically held that unless contents of affidavits, etc. are confronted with assessee by giving opportunity of cross-examination, same cannot be read in evidence against assessee. In view of my above observations, it is clear that purchase in question cannot be held to be bogus. My above decision also finds support from decision of this Bench given in case of ITO vs. Paramanand, Prop. M/s Jai Karan Das Paramanand, in ITA No. 275/Jd/2005 (asst. yr. 1999-2000) [reported at (2007) 107 TTJ (Jd) 395 Ed.] in which also same seller, namely, M/s Rajender Prasad (sic) is involved. As result, impugned addition stands deleted. other effective issue of this appeal is in relation to disallowances of Rs. 5,000 and Rs. 2,500 out of shop expenses and telephone expenses. This was not really pressed before me at time of arguments. Consequently, this issue is hereby dismissed. appellant has also raised one additional ground, which is purely legal ground by which initiation of reassessment proceedings under s. 147/148 has been challenged. reassessment proceedings under s. 147/148 has been challenged. learned Departmental Representative did not object to admittance o f this additional ground because it is obviously legal ground. Consequently, this additional ground is admitted to memo of additional ground No. 5. By this ground, it has been submitted that purchase of Rs. 6,58,652 was taken as bogus and outside books of accounts. learned Authorised Representative has submitted that reasons recorded by AO (copy of which is placed at page No. 1 of paper book) are not germane to issue of notice under s. 148 of Act because neither AO has made such addition nor that this was personal opinion of AO but it was borrowed from sales-tax authority. learned Departmental Representative, Smt. Swati Joshi, however countered submissions of learned Authorised Representative by stating that reason is quite valid and legal, and AO has investigated books of accounts of assessee and found this fact to exist. I have gone through rival submissions and I do not agree with learned Authorised Representative, because after commitment (sic-amendment) of s. 147 w.e.f. 1st April, 1989, power to reopen has been widened to larger extent. I agree that on basis of borrowed information, reopening is not permissible but with AO investigate into facts in given case and therefrom forms his own opinion then in that cases, reasons cannot be held to be valid (sic-invalid). After receiving order of sales-tax authority, AO has investigated books of accounts of assessee and from there he has found that sales and purchases by assessee were not verifiable from books of assessee s account. Therefore, this ground of appeal cannot be accepted and has to be dismissed. In result, appeal is partly allowed. *** JAGDAMBA TRADING COMPANY v. INCOME TAX OFFICER