Shri Vasantlal Ambalal Patel, Surat V. The ACIT.,Cent.Circle-3, Surat

CO 96/AHD/2008

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5819 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 24-04-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON' BLE SHRI N.S.SAINI, A.M . ) I.T.A. NO.754/AHD./2008 : ASSESSMENT YEAR: 2005-2006 A.C.I.T., CENT. CIRCLE-4, SURAT -VS- SHRI VASANTLAL AMBALAL PATEL, SURAT (PAN: ADQPP 0318M) (APPELLANT) (RESPONDENT) C.O. NO.96/AHD/2008 : ASSESSMENT YEAR: 2005 -2006 (ARISING OUT OF ITA NO.754/AHD./08) SHRI VASANTLAL AMBALAL PATEL, SURAT -VS- A.C.I.T., CENT. CIRCLE-4, SURAT (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI K. M ADHUSUDAN, SR.D.R ASSESSEE BY : SHRI P .M.MEHTA, A.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARE AGAINST THE ORDER DATED 23.11.2007 PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, AHMEDABAD FOR THE ASSESSMENT YEAR 200 5-2006. 2. GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER: 1 . THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELET ING THE ADDITION OF RS.6,91,297/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF INT EREST. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.2,55,505/- MADE BY THE A.O. ON ACCOUNT OF UNACCOUNTED INVESTM ENT IN DIAMOND. 2.1 VARIOUS GROUNDS RAISED BY THE ASSESSEE IN THE C ROSS OBJECTION ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, (REVENUE EFFECT BEING LESS THAN RS.2 LAKHS) DEPARTMENTS APPEAL DESERVES NOT TO BE ADMI TTED AT ALL AND AT ANY RATE DESERVES TO BE DISMISSED IN LIMINE IN VIEW OF: 2 ITA 754-AHD-08 & C.O.96-AHD-08 (I) THE CBDT INSTRUCTION NO.2705 OF 2005 DATED 24.10.20 05 READ WITH INSTRUCTIONS NO.1979 DATED 27.3.2000 AND NO.1985 DA TED 29.6.2000; AND (II) THE ITAT AHMEDABAD BENCH B DECISION IN ITA NO.3570/AHD/2007 DATED 28.12.2007 IN THE CASE OF JC IT VS. HEMETA AGRICULTURAL EQUIPMENTS A.Y. 2002-03. 2. WITHOUT PREJUDICE, EVEN ON MERITS DEPARTMENT S APPEAL DESERVES TO BE DISMISSED. 3. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEN D AND/OR WITHDRAW ANY GROUND OR GROUNDS OF CROSS OBJECTIONS EITHER BEFORE OR DURIN G THE COURSE OF HEARING OF THE SAME. 3. AT THE OUTSET, SHRI P.M.MEHTA, APPEARING ON BEHA LF OF THE ASSESSEE, POINTED OUT THAT CONTROVERSY INVOLVED IN GROUND NO.1 OF REVENUES AP PEAL IS SQUARELY COVERED BY THE DECISION DATED 07.01.2011 OF ITAT B BENCH, AHMEDABAD IN AS SESSEES OWN CASE IN ITA NOS. 748,751 TO 753/AHD/2008 FOR THE ASSESSMENT YEARS 1999-2000 AND 2002-03 TO 2004-05. HE ACCORDINGLY POINTED OUT THAT ON FOLLOWING THE DECISION OF THE T RIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 748,751 TO 753/AHD/2008 FOR THE ASSESSMENT YEARS 19 99-2000 AND 2002-03 TO 2004-05, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) BE UPHELD. 4. ON THE OTHER HAND, SHRI K. MADHUSUDAN, SR. D.R. , APPEARING ON BEHALF OF THE REVENUE, COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS OF T HE LD. COUNSEL FOR THE ASSESSEE. 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION OF THE ITAT B BENCH , AHMEBAD IN ASSESSEES OWN CASE ( SUPRA ), RELIED ON BY THE LD. COUNSEL OF THE ASSESSEE. IT I S PERTINENT TO NOTE THAT FACTS RELATING TO DISALLOWANCE OF RS.6,91,297/- MADE FOR THE ASSESSM ENT YEAR UNDER APPEAL IS IDENTICAL WITH THAT OF DISALLOWANCE OF INTEREST MADE IN EARLIER FOUR AS SESSMENT YEARS. THE ITAT IN EARLIER FOUR ASSESSMENT YEARS DELETED THE SAID DISALLOWANCE. WE, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE ( SUPRA ), UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THIS ISSUE DELETING THE DISA LLOWANCE OF INTEREST OF RS.6,91,297/- FOR THE ASSESSMENT YEAR UNDER APPEAL. 6. WITH REGARDING TO DELETION OF RS.2,55,505/-, THE LD. D.R., APPEARING ON BEHALF OF THE REVENUE, POINTED OUT THAT AT THE TIME OF SEARCH, A DIAMOND PACKET WAS FOUND AND THE ASSESSEE 3 ITA 754-AHD-08 & C.O.96-AHD-08 COULD NOT PRODUCE EVIDENCE REGARDING ITS OWNERSHIP. THEREFORE, THE ASSESSING OFFICER RIGHTLY TREATED THE INVESTMENT IN DIAMOND FROM UNDISCLOSED SOURCES. IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE SAM E IGNORING THE FACT THAT PACKET OF DIAMOND WAS FOUND IN POSSESSION OF THE ASSESSEE. HE ACCORDINGLY POINTED OUT THAT ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THIS ISSUE BE REVERSED AND ADDITION OF RS.2,55,505/- MADE BY THE ASSESSING OFFICER BE REST ORED. 7. ON THE OTHER HAND, SHRI P.M.MEHTA, APPEARING ON BEHALF OF THE ASSESSEE, POINTED OUT THAT A VAN NO. MH-04-5-1298 IN WHICH LUGGAGE BELONGING TO ABOUT 8 TO 10 ANGADIAS WERE BEING TRANSPORTED FROM THEIR OFFICES SITUATED AT BHULESHW AR AREA TO MUMBAI CENTRAL RAILWAY STATION. THIS VAN WAS JOINTLY HIRED BY VARIOUS ANGADIAS TO C ARRY THE VALUABLE PARCELS FROM THEIR OFFICES FOR THE SECURITY PURPOSES. THE PARCELS OF THE ASSESSEE CONTAINED VARIOUS DIAMOND PACKETS, CASH, TAPALS BELONGING TO VARIOUS PARTIES RECEIVED BY THE ASSESSEE, DURING ITS ORDINARY COURSE OF ANGADIA BUSINESS FOR TRANSFERRING THEM FROM MUMBAI TO VARIO US CITIES, TOWNS IN GUJARAT. CASH, VALUABLES AND TAPALS OF ALL THE PARTIES WERE RELEASED BY THE DEPARTMENT AFTER DUE VERIFICATION EXCEPT ONE DIAMOND PACKET VALUING RS.2,55,505/- BELONGING TO S OOR DIAM JEWELLERY PVT. LTD., CONSTITUENT OF THE ASSESSEE FIRM. HE AGAIN SUBMITTED THAT DIAMOND PACKET, TO WHOM, IT BELONGED, ACCEPTED THE OWNERSHIP OF THE SAID PARCEL. THEREFORE, ON THIS BA SIS, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RIGHTLY DELETED THE ADDITION OF RS.2,5 5,505/-. 8. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT DIAMOND PACKET IN QUESTION WAS RECEIVED BY THE ASSESSEE IN ITS NORMAL COURSE OF BUSINESS. THE PACKET IN QUESTION B ELONGED TO SOOR DIAM JEWELLERY PVT. LTD. ONCE IT IS PROVED THAT PARCEL WAS RECEIVED DURING O RDINARY COURSE OF ANGADIA BUSINESS AND THE CLAIMANT ACCEPTED THE OWNERSHIP, THE COURIER CANNOT BE BURDENED TO EXPLAIN THE SOURCE IN THE HANDS OF THE CLAIMANT. WE ARE, THEREFORE, OF THE VI EW THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN DE LETING THE ADDITION OF RS.2,55,505/-. THIS GROUND OF THE APPEAL OF THE REVENUE IS ALSO REJECTE D. 4 ITA 754-AHD-08 & C.O.96-AHD-08 9. AT THE TIME OF HEARING BEFORE US, THE CROSS-OBJE CTION FILED BY THE ASSESSEE HAS NOT BEEN PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. HENCE, THE C.O. FILED BY THE ASSESSEE IS DISMISSED, AS NOT BEING PRESSED FOR. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 08.04.2011. SD/- SD/- (N.S.SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 08/04/2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S.