ORDER
Per Shri B. L. Chhibber, (Accountant Member) – These cross-appeals arise out of the order of the CIT (Appeals)-I, Ahmedabad.
2. The first ground raised by the revenue reads as under :-
“The ld. CIT (A) erred in law and on facts in making the Amnesty Scheme applicable to Rs. 1,87,500 out of Rs. 2,25,000 declared and in directing not to levy interest under section 215 on Rs. 1,87,500.”
Since the CIT (A) gave part relief to the assessee, the assessee is also in appeal on this issue (ITA No. 3636/Ahd./1990) raising the following ground :
“The CIT (A) failed to appreciate that the facts and the circumstances which led him to hold that the benefits were available in respect of 5/6th of disclosed income equally applied to the remaining 1/6th income.”
3. The assessee is a partnership firm and is engaged in the business of cotton seed oil and ginning of cotton and purchase and sale of Kapas, Kapasia, Cotton seed oil, oil cake, etc.
4. Search and seizure operations were carried out at the premises of the assessee-firm on 1-6-1984, during the course of which various books of account and other records were seized therefrom. Statement of one of the employees of the assessee-firm, Shri Kalyanbhai A. Vora, was also recorded during the course of search proceedings. Simultaneously, search operations were also carried out at the residential premises of one of the partners, Shri G. K. Parikh. Various loose papers, etc., were seized therefrom and statement of Shri G. K. Parikh was also recorded. Simultaneously, statements of a few of the other partners of the firm were also recorded.
5. In the statement recorded of the employee Shri Kalyanbhai A. Vora, he was questioned on a paper found from his custody by the search party during the course of search proceedings and was asked to explain the same. In his answer to question No. 6, he stated, “to my knowledge, the above paper reflected the distribution of the income earned by the firm not reflected in the books of account aggregating to Rs. 2,25,000”. Thereafter, in his subsequent answers, he stated that the said amount was brought and distributed by Shri G. K. Parikh and that the said income was earned by the firm over a period of 6 years. It is noteworthy here to state that simultaneously, search was also conducted at the residential premises of the partner Shri G. K. Parikh, and who, as per the statement of the employee Shri Kalyanbhai Vora, is the person responsible to have brought in the above sum of Rs. 2,25,000 and distributed the same. However, this information, it seems, must have been passed on to the search party carrying the search activity at the residential premises of the partner Shri G. K. Parikh and on being confronted vide question No. 44, Shri G. K. Parikh denied of any such activity, as his reply to the said question. The statement of some of the other partners and/or family members of such partners, who had signed on these papers, were also recorded during the course of these search proceedings. It is noticed that different partners have interpreted the said paper differently. One of the partners Shri Jayantbhai S. Bhavsar stated that the paper represented the amount which was decided to be collected for building a godown of the firm and those who had consented had signed in front of their name with the figure to be brought in by them. Another partner Shri Jasubhai N. Patel had stated that he had received the said amount but did not know anything about the said paper. Thus, it is observed from the various statements of the partners that each one had interpreted the said paper differently and no consistent stand had been taken with reference to the same. It is pertinent to note that there were as many as 19 partners in the firm and Shri G. K. Parikh is the partner looking after most of the activities of the firm. Further Shri G. K. Parikh is not only the partner of this firm, but is also a partner in other firms, as well as, is carrying on the activity of purchase and sale of oil seeds in his individual capacity.
6. The assessee filed its original return for Rs. 91,000 which was thereafter revised showing a total income of Rs. 3,41,000 filed under the Amnesty Scheme. The revised return included a sum of Rs. 2,50,000 as additional income offered for tax under the Amnesty Scheme. A note was appended with the return which it was clearly stated that this additional income included Rs. 2,25,000 as admitted by the Accountant of the firm on the basis of the seized loose paper being the unaccounted profit of the past six years. It was further mentioned in this note that the appellant was not willing to dispute the testimony of the Accountant and further that it was not willing to spread over the amount over the past six years in order to save further litigation and to avail itself of the immunity as granted under the Amnesty Scheme. The Assessing Officer did not consider the aforesaid amount as voluntarily declared on the ground that the seized paper specifically mentioned about the distribution of unaccounted money amongst partners and the accountant of the firm admitted of such accumulation of unaccounted profit. He, therefore, treated the unaccounted profit of Rs. 2,25,000 as concealed business income and added accordingly and the extra amount of Rs. 25,000 was also assessed as additional income as declared by the assessee. She has not specifically mentioned whether the Amnesty Scheme was applicable to the assessee or not in respect of the disclosure of additional income of Rs. 2,50,000. However, since interest had been charged and penalty proceedings had been initiated, it is evident that the ITO had not granted the benefits of Amnesty Scheme in respect of the aforesaid disclosure.
7. On appeal, the learned CIT (A) allowed the benefits of the Amnesty Scheme to the assessee-firm on a sum of Rs. 1,87,500 out of the sum of Rs. 2,25,000 disallowing Amnesty concession on Rs. 37,500. He did so giving consideration to the statement of the employee Shri Kalyanbhai A. Vora, who had stated that a sum of Rs. 2,25,000 was earned by the firm over a period of six years and thus, 1/6th of the sum would be the income of the year in question. He has, thus, disallowed the benefits of Amnesty Scheme on the said amount of Rs. 37,500.
8. Shri M. S. Rai, the learned DR submitted that the assessee filed the revised return after the search and seizure operation and since the amount of Rs. 2,50,000 was declared after detection by the department, the CIT (A) was not justified in holding that the assessee was entitled to the benefits of Amnesty Scheme in respect of the amount of Rs. 1,87,500. In support of his contention, the learned DR relied upon the decision of the Ahmedabad Bench B in the case of Asstt. CIT v. Ilaxi Textiles Industries [1994] 49 ITD 330. The learned DR further submitted that it was not open to the CIT (A) to split the amount of Rs. 2,25,000 offered by the assessee into two parts. The amount can not be split and the entire amount ought to have been held as not qualified for the benefits of the Amnesty Scheme.
9. Shri S. N. Soparkar, the learned counsel for the assessee submitted that though search was conducted on 1-6-1984, no action was taken by the revenue to tax the impugned amount of Rs. 2,25,000 as admitted by the accountant on the basis of the seized paper as unaccounted profit of the Firm for the six last years. He took us through the seized paper (page 65) and submitted that it did not indicate the year or years to which the alleged unaccounted profit related to, though the date 18-10-1983 was mentioned on the paper. The learned counsel for the assessee submitted that it is the Accountant who stated that the profit is related to the past six years being accumulated from short payment of wages and bonus to the employees. This statement of the accountant had been absolutely relied upon by the Assessing Officer without bringing anything to corroborate that profit was really accumulated by adopting the modus operandi of making short payment to the employees of amounts different than what was recorded in the regular books of account. The statement, therefore, according to the assessees counsel, should have been read as a whole and the unaccounted profit of Rs. 2,25,000 should have been assessed in six assessment years including the assessment year 1984-85 which is under appeal. The learned counsel submitted that no such reopening of the past assessments was done by the ITO and no show-cause notice was issued in this regard upto the date on which the return was filed declaring additional income of Rs. 2,50,000 on 31-3-1986. Thus, upto one year and nine months after the date of search which was on 1-6-1984, the revenue did not act upon the impugned seized paper and the statement of the accountant possibly because there was doubt as to the evidentiary value of the paper as well as the statement of the accountant and the taxability of the amount in one or more years. The learned counsel for the assessee submitted that it is the assessee-firm which filed the return voluntarily declaring not only the amount of Rs. 2,25,000 as mentioned in the seized paper but also further amount of Rs. 25,000 under the Amnesty Scheme. Therefore, the return should have been accepted under the said scheme and the benefits as promised in the scheme should have been allowed in toto in regard to charging of interest under various sections and initiation of penalty proceedings. In support of his contentions, he relied upon the judgment of the Honble Calcutta High Court in the case of Anand Kumar Saraf v. CIT [1995] 211 ITR 562.
10. As regards the appeal filed by the assessee, the learned counsel for the assessee submitted that the ground of appeal before the CIT (A) was that the assessee-firm was entitled to the benefits of Amnesty Scheme in respect of the income of Rs. 2,25,000 disclosed by the appellant under the said scheme and having held that the assessee-firm was entitled to the said benefits of Amnesty Scheme, in respect of 5/6th of the disclosed income the CIT (A) grossly erred in holding that the benefits of the Amnesty Scheme would not be available to the assessee-firm in respect of 1/6th of income of Rs. 2,25,000, i.e., in respect of income of Rs. 37,500 out of the income of Rs. 2,25,000 disclosed by the assessee under the Amnesty Scheme, amongst others, on the following grounds :
“(a) He failed to appreciate that the facts and the circumstances which led him to hold that the benefits were available in respect of 5/6th of disclosed income equally applied to the remaining 1/6th income.
(b) He grossly erred in holding that the benefits were not available in respect of 1/6th of disclosed income in the absence of any material having been found by the Assessing Officer or by him to support the statement of the accountant Shri Kalyanbhai A. Vora that the appellant was furnishing inaccurate particulars of income by recording more payments of wages and bonus than actually paid.
(c) He grossly erred in interpreting that in view of the clarification issued by the CBDT at question No. 19 in Circular No. 451 dated 17-2-1986 the benefits of the Amnesty Scheme were not available in respect of 1/6th of disclosed income. The appellant submits that the said clarification issued by the CBDT clearly supported the appellants submission that the benefits of the Amnesty Scheme were available in respect of the remaining 1/6th of disclosed income.”
11. We have considered the rival submissions and perused the facts on record. It is evident from the above facts that the search was conducted as early as in 1984 and the revenue took no action whatsoever, with reference to the various statements recorded of the partners and the employee, nor with reference to the loose paper in question, which has formed the basis for this sum of Rs. 2,25,000. As will be apparent from the decision of the Honble Calcutta High Court in the case of Anand Kumar Saraf (supra) relied upon by the learned counsel for the assessee, the Honble High Court has clearly held that merely seizure of papers cannot mean detection and that when detection has not taken place, if the assessee were to come forward with a disclosure under the Amnesty Scheme he is very well eligible for all the benefits as envisaged under the Amnesty Scheme. The Honble High Court further observed at page 574 as under :
“The mere stigma of search and seizure can not shut out the assessee from the amnesty. The scheme is an inducement to evaders to make a clean breast of past evasions and square up accounts with the revenue. The persons who are left out from this opportunity are those whose concealments have come to light beforehand by investigations and search and seizure operations carried out by the revenue. The clarification of the Board in its answer to question No. 19 as to the meaning of the expression “before detection by the Department” show that if the assessing authority has a prima facie belief that would not mean detection. The dictionary meaning of the word “detect” is “to discover the true especially hidden or disguised” character or “to discover or determine the existence, presence or fact” (see Websters Third New International Dictionary), 1976 edition). In the instant case, certain documents and papers were seized. They might or might not reveal concealment. Even the seizure could not lead to a prima facie belief as to concealment as the contents, purport and the implications of the documents were yet to be gone into. Therefore, at the point of time the return under the Amnesty Scheme was filed, the Assessing Officer admittedly had no idea as to whether the seized papers would reveal any concealment. The mere fact that the petitioner-appellants case was awaiting a probe with reference to his past records as well as extrinsic sources could not lead to his ouster from the scope of the scheme.”
The Honble Calcutta High Court has further relied on the answer 19 of the CBDT to Circular No. 451 and in para 14 of the judgment, has mentioned as under :
“It is an admitted fact that the assessee disclosed fully and truly his income and wealth in such revised returns and had also paid taxes in due time as provided under the Amnesty Scheme. Since the Department had not looked into the seized papers and had not carried out investigation prior to March 31, 1986, it can not be said that by the mere fact of seizure, the tax authorities could be said to have even a prima facie belief that the concealment of income and wealth by the assessee had been detected. Even if there had been such prima facie belief, the existence of such belief could not deprive the assessee from claiming the immunity and benefits given under the Amnesty Scheme provided the assessee disclosed his true income and wealth in the revised returns and paid taxes based on such revised returns in due time as prescribed in the Amnesty Scheme. This has been clearly explained by the Central Board of Direct Taxes in reply to question No. 19 in the said Circular No. 451 [see (1986) 158 ITR (St.) 135], dated February 17, 1986.”
All the more, in the said case, search had been carried out only a few days prior to the date of furnishing the revised return of the assessee. Whereas, in the present case, the search had been carried out as long back as on 1-6-1984 i.e. almost two years prior to the filing of the return by the assessee-firm, and no action whatsoever had been taken by the revenue to go into the facts of the case and unearth concealed income which they through to have been concealed by the assessee-firm. Merely for the reason that one of the employees Shri Kalyanbhai A. Vora had made the statement with reference to a particular paper that it reflected the unaccounted income of the firm, and which had, there and then simultaneously at a different premises been rejected by the partner, could in no way be said that the offer made by the firm under the Amnesty Scheme for a sum of Rs. 2,50,000 was after the detection. The suo motu offer by the assessee-firm was for a sum of Rs. 2,50,000, whereas Rs. 2,25,000 is presumed to be concealed income of the firm by the Department, could in no way abstain the firm from the benefits as envisaged under the Amnesty Scheme. Moreover, the reasoning of the learned CIT(A) that 1/6th of Rs. 2,25,000 could be the concealed income of the firm, referable to this assessment year, can not also hold the ground for the fact that the Department has failed to detect any concealed income, and merely a seizure of a paper and a statement of an employee which had been rebutted immediately by the partner of the firm cannot be treated as detection. Thus, in our opinion, there was no detection, the offer of the sum of Rs. 2,50,000 was made suo motu by the firm only to avail the benefits of the Amnesty Scheme and to avoid further litigation, can not be taken as a ground that the offer was after detection and estop the firm from the benefits under the Amnesty Scheme. The revenue had almost two years after the search was conduced and the statements of the employee and the partners were recorded, to proceed in this matter and to cross-examine various employees, partners etc. of the firm and quantify the real concealed income, if any, of the firm based on the paper etc. seized during the course of the search proceedings, which has not been done, and subsequently, because the firm offers a sum which is all the more, more than what has been reflected in the loose paper, can not abstain the firm from the benefits of the Amnesty Scheme, even on 1/6th portion of the amount reflected in the loose paper. As there is no detection, the question of granting immunity on a part of a sum and not on the balance also does not arise. Following the aforesaid judgment of the Calcutta High Court in the case of Anand Kumar Saraf (supra) we hold that the assessee is entitled to the benefits of Amnesty Scheme on the entire amount of Rs. 2,50,000.
12. Coming to the decision of the ITAT in the case of Ilaxi Textiles Industries (supra), relied upon by the learned DR, we find that the facts of two cases are distinguishable. In the case of Ilaxi Textiles Industries (supra), inquiry by the revenue had proceeded further, and had reached to a stage where concealment by the assessee had been detected and various statements of third parties to justify the same had also been recorded. Further, one of the technical third party who had given statement against the assessee was also cross-examined by the partner of the assessee-firm. Subsequently, after the cross-examination on the date fixed for the next hearing of the case neither the assessee or his authorised representative appeared before the Assessing Officer. Thereafter, the assessee firm filed a revised return disclosing additional income referable to the enquiry in question under the Amnesty Scheme. For this very reason, subsequent filing of a revised return by the assessee firm showing therein an additional income and claiming the benefits of the Amnesty Scheme had not been granted and the matter when brought before this Tribunal was upheld in favour of the revenue. In the case before us, as will be apparent from the facts discussed hereinabove, no such enquiry had been made after the search by the revenue and moreover as will be observed from the various statements of the partners of the firm and the employee all the statements are vague giving different explanations to the question. The revenue has therefore made no exercise whatsoever to enquire into the matter and unearth facts which would lead to say that unaccounted income did accrue to the firm as stated by the employee Shri Kalyanbhai A. Vora but rejected in toto in the very preliminary statement of the main partner of the firm, viz. Siri G. K. Parikh. The act, therefore, of the assessee firm of filing a return showing therein an additional income disclosed pursuant to the immunities of the Amnesty Scheme can not thus be considered as based to be a disclosure by the assessee firm after detection and thereby estopping the assessee firm from the immunities as per the Amnesty Scheme. It is thus clear that the decision of the Tribunal in the case of Ilaxi Textiles Industries (supra) does not apply to the present case as the facts of the present case are vastly different from what were in the case of Ilaxi Textiles Industries (supra). Moreover the facts in the case of Anand Kumar Saraf (supra) though being slightly different, wherein the assessee was placed on a much more tight rope than in the present case, has been awarded by the Honble High Court, the benefits of Amnesty Scheme. Thus, the assessee firm rightly deserves all the benefits of the Amnesty Scheme and the whole of the amount offered by the assessee firm as disclosure under the Amnesty Scheme is covered by the immunities envisaged by the said shame. We, accordingly, dismiss the ground raised by the revenue and allow the ground raised by the assessee.
13. The next two grounds raised by the revenue relate to addition of Rs. 4,01,919 being allegedly undisclosed sales to Shri G. K. Parikh and addition of Rs. 81,110 as unexplained payments to Shri G. K. Parikh.
14. The facts are that in the course of search at the residence of the partner Shri G. K. Parikh on 1-6-1984 a diary inventorised at B-38 of the Panchnama was seized which indicated various notings and jottings relating to certain financial transactions entered into by Shri G. K. Parikh as admitted by him in his statement. Shri G. K. Parikh has stated that he did not remember the exact nature of the transactions in view of distance of time; he, however, offered for taxation the peak credits in three assessment years i.e. 1982-83, 1983-84 and 1984-85 taking into account the receipts and payments as indicated in the said diary. It is noteworthy to mention that Shri G. K. Parikh has been assessed as such in respect of income as declared purportedly under Amnesty Scheme. In the said diary at page 306 there were some notings which have been analysed by the ITO at pages 7, 8 and 9 of the assessment order. A xerox copy of the page has also been attached to the assessment order. At the top of this page “MAL” or “NAL” has been mentioned and below this, 4,01,919.30. There were some other figures by way of additions and deductions in this page. The name of the assessee firm i.e. Prakash Oil Industries and Ginning Factory has not been mentioned in this page at all though some other names like Vyapari Ginning, Navin, Kirti, J. N. Shah etc. have been mentioned in respect of certain payments or receipts. There was also mention of “Ti Bill” of Rs. 14,559.30, Insurance 1842, G. K. 1500, J. N. Shah 1800, Motor 15,000. The ITO interpreted the entire page as relating to purchase of goods from M/s. Prakash Oil Industries, i.e. the assessee firm and distribution of profit between the assessee and Shri G. K. Parikh at 50% each. He, therefore, added Rs. 4,01,919 as undisclosed sales by the assessee firm to Shri G. K. Parikh. In some other pages of the diary, there were mentions of payments by the assessee firm amounting to Rs. 81,110 on different dates and this amount was also added as unexplained payments to Shri G. K. Parikh.
15. On appeal, the CIT (Appeals) deleted the addition observing as under :
“On careful consideration of the facts and circumstances of the case and the judicial decisions on the points, I am of the view that the impugned addition of Rs. 4,01,919 in respect of the alleged undisclosed sales on the basis of undecipherable notings at page 306 of the diary B-38 as seized from the residence of Shri G. K. Parikh, partner of the firm, cannot be made a basis for making the aforesaid addition. I have gone through the notings and the interpretation as placed by the ITO on these notings linking the appellant firm and I find that no such linkage is possible to hold that goods of the aforesaid value had been sold by the appellant to Shri G. K. Parikh and the profit to the extent of 50% had been divided between Shri G. K. Parikh and the appellant. This page does not even mention whether the figure of Rs. 4,01,919 related to purchase or sale much less mentioning the name of party, quantity or rate. On this very page there are several other names and mention of other purposes for which expenditure has been incurred like Insurance, Motor etc. If transactions to the extent as indicated in this page would have really occurred as alleged, in the simultaneous search at different places, some other evidences would have been found out supporting such transaction. But admittedly nothing was found out from the premises of the firm or from the premises of other partners. Shri G. K. Parikh has admitted about the various notings and jottings in the entire diary as relating to his own financial transactions in general and he has not implicated the appellant in any way. He has even offered for taxation Rs. 3,37,000 in three different assessment years i.e. 1982-83 to 1984-85 on the basis of the peak credits taking into account the receipts and payments in the diary and such peak credits addition has been upheld in appeal in the case of Shri G. K. Parikh.”
16. The learned CIT (Appeals) also deleted the addition of Rs. 81,110 observing as under :
“Exactly for the same reasons, the addition of Rs. 81,110 relating to alleged unexplained payment to Shri G. K. Parikh as noted on different pages of diary and interpreted as such by the ITO is also deleted.”
17. Shri M. S. Rai, the learned Departmental Representative submitted that it is wrong on the part of the CIT (Appeals) to state that the document inventorised at page 306 of the Panchnama is not decipherable. He submitted that the ITO has taken great pains to deciphere this document and in this connection he drew our attention to pages 7, 8 and 9 of the assessment order. The learned Departmental Representative further submitted that the CIT (Appeals) has simply gone by the behaviour of Shri G. K. Parikh whereas he ought to have called for a remand report or set aside the assessment.
18. Shri S. N. Soparkar, the learned counsel for the assessee relied upon the order of the CIT (Appeals). He submitted that no such goods were sold to Shri G. K. Parikh and no such payments were made to him as has been interpreted by the ITO. The learned counsel further submitted that the diary was seized from the residence of Shri G. K. Parikh who has got interest in 12 different firms in his individual sub-group and if he has admitted about his financial transactions as recorded in this diary, such admission binds him alone on the basis of receipts and payments as recorded in this diary. He has already offered to be taxed on the basis of the peak credits, and therefore, the undecipherable notings in the diary here and there in the aforesaid manner can not be taken as a base in making any addition in the assessment of the assessee firm. According to the assessees counsel in page 306 of the diary which purportedly gives a summary of the transactions in the diary there is no mention of the name of the assessee firm though mention has been made about other payments to some others persons and for certain purposes like insurance, Motor etc. The learned counsel submitted that there is absolutely no indication that any amount of profit, much less 50%, could have been given to the assessee firm by Shri G. K. Parikh. The learned counsel further submitted that this paper at page 306 did not indicate in any way whether Prakash Oil Industries & Ginning Factory sold any goods or purchased any goods. It could be the total of and summary of G. K. Parikhs group transactions with various concerns. The assessees counsel further submitted that in the course of simultaneous search at the business premises of the assessee and residence of the partners, no proof was found anywhere relating to any sale or purchase of goods with Shri G. K. Parikh. He therefore submitted that the CIT (Appeals) was justified in deleting the addition of Rs. 4,01,919 on account of alleged undisclosed sales to Shri G. K. Parikh. The learned counsel further submitted that on the same analogy the addition of Rs. 81,110 for alleged unexplained payments to Shri G. K. Parikh is not justified.
19. We have considered the rival submissions and perused the facts on record. The learned DR produced before us the diary seized at the residence of Shri G. K. Parikh. We have minutely gone through it. We have also perused the paper at page 306. We find that the name of the assessee i.e. Prakash Oil Industries & Ginning Factory has not been mentioned in page 306 at all. Those of the other names like Vyapari, Navin, Kirti, J. N. Shah etc. have been mentioned in respect of certain payments or receipts. There was also mention of some other entries which we have detailed supra in para 14. When read as a whole page 306 of the diary purportedly gives a summary of the transactions carried on by Shri G. K. Parikh at his end and there is no corroborative evidence to establish that the assessee-firm made sales to Shri G. K. Parikh. It is an admitted fact that the diary was seized from the residence of Shri G. K. Parikh who has got interest in 12 different firms in the individual sub-group and if he has admitted about his financial transactions as recorded in this diary such admission binds him alone and not the assessee-firm merely because he happens to be one of the partners of the assessee-firm. It is further noted that five different families are interested in the assessee firm and therefore it is difficult to believe that Shri G. K. Parikh would have been allowed to divert any profit to the extent of 50% in respect of any transaction. Further the ITO has talked of 50% share in the accounted profit whereas Shri G. K. Parikh individually holds only 25% share and even with his daughter and brother he has only 32% share in the firm and, therefore, the distribution could not have been 50%. Further it is noted that Shri G. K. Parikh has owned up the entries in the diary and has surrendered peak of credits in the assessment years 1982-83, 1983-84 and 1984-85. He has paid substantial tax thereon. Mere entries in the accounts of third party was not sufficient to prove that the assessee had indulged in such transaction, as there was no guarantee that the entries were genuine. In this we are supported by the judgment of the Bombay High Court in the case of Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696.
20. We do not find any merit in the submissions of the departmental representative that the CIT(A) should have remanded the matter to the file of the Assessing Officer or set aside the same for proper verification of the facts. We find that all the basis facts were before the Assessing Officer and this fact is accepted by the departmental representative when he says that the Assessing Officer has taken great pains to deciphere the contents at page 306 of the diary and the Assessing Officer appreciated the same and arrived at a definite conclusion. In this we are supported by the judgment of the Gujarat High Court in the case of CIT v. Harikishan Jethalal Patel [1987] 168 ITR 472 where it has been held that where foundational facts do not exist raising even a remote doubt regarding the genuineness of the firm/or the transactions in question, a second innings should not be permitted to the revenue as it would result in avoidable hardship and harassment to hundreds of assessees. In the present case the facts have been thoroughly marshelled by the Assessing Officer and the CIT (Appeals) and after hearing detailed arguments from both the sides, put before us we do not feel any necessity to restore the matter back to the file of the Assessing Officer.
21. In the light of above discussion, we do not find any infirmity in the findings of the CIT (Appeals) and confirm the same that the Assessing Officer is not justified in making the additions of Rs. 4,01,919 and Rs. 81,110. These grounds accordingly fail and are dismissed.
22. The last ground raised by the revenue is against the deletion of Rs. 2,20,974 on account of alleged purchase from the sister concern. M/s. Pragati Trading Company and M/s. Rajul Traders and G. K. Parikh Family Trust, at prices higher than prevailing market price. It is admitted by both the sides that the facts here are identical to those discussed by us in our order in the case of Prabhat Oil Mills Kadi [IT Appeal No. 3904 (Ahd.) of 1990 dated 3-4-1995], a sister concern of the assessee-firm. As such the decision given in our aforesaid order will apply mutatis mutandis to the facts of the present case. For the reasons discussed therein we confirm the finding of the CIT (Appeals).
23. In the result, the revenues appeal is dismissed and the assessees appeal is allowed.