IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : NEW DELHI BEFORE SHRI I.P.BANSAL, JM AND SHRI R.C.SHARMA, AM ITA No.2665/Del/2008 Assessment Year : 2006-07 Dy.Commissioner of Vs. M/s Bishan Singh Didar Singh Income Tax, Jewellers, Central Circle-2, 1381, Chandni Chowk, New Delhi. Delhi 110 006. PAN No.AAAFB3833G. (Appellant) (Respondent) Appellant by : Shri B.K.Gupta, Sr.DR. Respondent by : Shri Sanjeev Jain, CA. ORDER PER R.C.SHARMA, AM : This is appeal filed by Revenue against order of CIT(A) dated 15.5.2008 for AY 2006-07, in matter of order passed u/s 143(3) read with Section 153A. 2. Rival contentions have been heard and record perused. Facts in brief are that assessee is partnership firm engaged in business of manufacturing and sale of jewellery with S/s Didar Singh and his son Gurdeep Singh as partners, was searched by department on 20.1.2006 u/s 132 of IT Act, 1961. During course of search operations, several books of account and documents were seized. statements of both partners were recorded u/s 132(4) and partners made disclosure of Rs.1.00 crore for and on behalf of firm represented by excess stocks, amount recoverable from customers, advances made and articles of jewellery given to karigars and excess value of jewellery found at residence and in lockers. 2 ITA-2665/D/2008 3. During course of assessment proceedings assessee was asked to explain details of transactions recorded at page no.13 of Annexure A-3/Party R-1. entries at that page read as under:- Adv. To 2,50,000 Owner 4,00,000 Chq. 1,00,000 7,50,000 Cash withdrawal 2,00,000 (8 + 2) Chani 3,00,000 Amarjeet Anand 5,00,000 R.S. & Firm 30,00,000 Cheque Mo 1,00,000 Cheque iss for S.ax 50,000 For safe 15,000 Intt. for 2 months on 10,00,000 25,000 Total for jt. A/c in shop 49,40,000 Our share 32,93,333 Amrik 8,00,000 Loan from Sethi & P 10,00,000 50,93,333 Cheques BK 900000 + 400000 KS 13,00,000 Cheque from BSDS 10,82,427 Paid to Premji 2,50,000 Paid cash 8,50,000 4 + 450000 85,75,760 4. In response to that assessee vide its letter dated 10.12.2007 has submitted that this above account pertains to AY 1998-99. In its explanation to above entries, assessee tried to prove that entry of Rs.13,00,000/- and Rs.10,82,427/- pertains to AY 1998-99. Being not satisfied with assessee s explanation, addition of Rs.1,35,15,760/- was made by AO which was agitated by assessee before CIT(A). 5. By impugned order, CIT(A) deleted addition after calling for remand report and observing that document No.13 of Annexure A-3 did not 3 ITA-2665/D/2008 pertain to period of assessment in question but actually pertain to period ending on 31st March, 1998 which stands established with reference to books of account of period ending on 31st March, 1998. Bank pass book of firm and partner Shri Didar Singh Chadha and confirmations of retiring partner Shri Kanwaljeet Singh Chadha and his family members as filed before AO were also produced. CIT(A) further observed that assessee had filed detailed explanation about entry of Rs.13 lakhs (cheque B.K. 9 lacs + K.S. Rs.4 lacs) in seized document as to how these two cheques were cleared on 27.1.2008 from firm s bank account, copy of which was filed before AO. perusal of bank account shows that these 2 cheques of Rs.9 lacs and 4 lacs were indeed debited in appellant s bank account on 27.1.1998. This clearly shows that these related to assessment year 1998-99 and were also duly recorded. AO has not given any reason for not accepting explanation of appellant either in assessment order or in his remand report. From books of account of firm for financial year 1997-98, which were produced before CIT(A), he observed that in ledger account of State Bank of Saurashtra, bank account has been credited by these two cheques of Rs.4 lacs and Rs.9 lacs. copy of relevant page of ledger account was also verified by him. ledger accounts of Mrs. Bhupender Kaur Chadha and Shri Kanwanljeet Chadha were also seen in ledger of firm produced before CIT(A) and it was observed that their accounts were debited on same date by Rs.9 lacs and Rs.4 lacs respectively. Aggrieved by order of CIT(A), Revenue is in further appeal before us. 6. In grounds of appeal filed by Revenue, deletion of addition on merit was challenged as well as action of CIT(A) for accepting additional evidence. 7. We have considered rival contentions, carefully gone through orders of authorities below and remand report placed on record. From record, we found that addition of Rs.1.35 crores was made on basis of document 4 ITA-2665/D/2008 No.13 of Annexure A-3. It was explained before AO that this document pertains to AY 1998-99 during which one of partner firm of assessee retires and payment was made to him. After calling for detailed remand report and examining books of account and TDS challans so produced before CIT(A), CIT(A) recorded categorical finding that entire document was written in one go and entries mentioned therein clearly pertains to period prior to period covered by proceedings u/s 153A and which was verifiable from entries in books of account of assessee pertaining to that relevant assessment year. Revenue is also aggrieved for admitting additional evidence, which we found were in form of TDS certificate. CIT(A) while accepting additional evidence had called for remand report in terms of Rule 46A and after considering contents thereof has come to conclusion that entries on seized paper pertain to AY 1998-99. In view of remand report having been called for, we do not find any merit in contention of learned DR for alleging action of CIT(A) in terms of Rule 46A. case law cited by learned DR and reported at 288 TIOL 474, in case of Mittal International (India) Pvt.Ltd. is distinguishable on facts. From order of CIT(A), it is discernable that additional evidence has been accepted after due application of mind, moreover additional evidence in form of TDS certificate forms part of department record, therefore same cannot be alleged as additional evidence. Calling of remand report from AO amounts to giving full opportunity to AO to examine evidence or to cross examine witness if any produced by assessee. In view of detailed finding recorded by CIT(A) with regard to period to which document on basis of which addition was made, we do not find any reason to interfere in order of CIT(A) for deleting addition made in AY 2006-07. Even if CIT(A) has observed that most of entries on seized paper have been explained and same were verified from books of account, bank statement etc., some of entries which were not explained by assessee even no addition was warranted insofar as assessee himself has declared Rs.1 crore during course of search itself on 5 ITA-2665/D/2008 which there is no comment of AO in assessment order. Keeping in view totality of facts and circumstances of case, there is no infirmity in order of CIT(A). 8. In result, appeal of Revenue is dismissed. Decision pronounced in open Court on 30th September, 2009. Sd/- Sd/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 30.09.2009. VK. Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Deputy Registrar DCIT CC-23 v. Bishan Singh Didar Singh Jeweller