Shri Zahir Abbas Abdul Rehman Pattiwala, Modasa V. The Income tax Officer,Ward-4, Modasa

ITA 1202/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57169 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Business income
• Section: 147; 69; 2

Judgement Text

ITA N O.1202/AHD/2010. ASSES SMENT YEAR 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHM EDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT AND SHRI A.L. GEH LOT) I.T.A. NO. 12 02/AHD/2010 (ASSESSMENT YEAR: 2005 -2006) ZAHIR ABBAS ABDUL REHMAN PATTIWALA, PROP. ANAND SALES AGENCY, KADIYAWALA ROAD, MODASA, DIST. SABARKANTHA. (APPELLANT) VS. INCOME TAX OFFICER, WARD 4, MODASA (DIST. SABARKANTHA) (RESPONDENT) PAN: ALKPP 7513 N ON BEHALF OF THE ASSESSEE : MR. M. K. PATEL. ON BEHALF OF THE REVENUE.: MR.SAMIR TEKRIWAL, SR.D .R. ( )/ ORDER DATE OF HEARING : 12-1-2012 DATE OF PRONOUNCEMENT : 10-2-2012 PER: SHRI A.L. GEHLOT,A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT (A)VI, AHMEDABADS ORDER DATED 20-11-2009 FOR THE ASSESSME NT YEAR 2005-06. 2. IN ITS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THAT ON FACTS AND IN LAW, THE LD. CIT (A) HAS G RIEVOUSLY ERRED IN HOLDING ASSESSEES INVESTMENT AS UNEXPLAINED INVEST MENT WITHIN THE MEANING ITA N O.1202/AHD/2010. ASSES SMENT YEAR 2005-06 2 OF SECTION 69 OF THE ACT WHEN ASSESSEE HAS SHOWN AN D MAINTAINED BOOKS OF ACCOUNTS. 2. THAT ON FACTS AND IN LAW, THE LD. CIT (A) HAS GRIEV OUSLY ERRED THAT NOTICE ISSUED U/S. 148 IS IN ACCORDANCE WITH LAW. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO RECEIVED INFORMATION FROM OFFICER OF OTHER CIRCLE OF THE DEPARTMENT THAT THE ASSESSEE HA S DEPOSITED RS.6,30,000/- IN BACKWELL BISCUITS LTD. THE AO REOPENED THE CASE U/S . 147 AND ISSUED NOTICE U/S. 148 ON 5-3-2008. THE AO DID NOT ACCEPT ASSESSEES C ONTENTION AND MADE ADDITION OF RS. 6,30,000/-U/S. 69 OF THE ACT AND ASSESSED IN COME AT RS.6,78,960/- WHICH INCLUDE BUSINESS INCOME OF RS.48,960/- DECLARED BY THE ASSESSEE IN AGRICULTURE INCOME RS. 24,000/-. 4. THE CIT (A) CONFIRMED THE ORDER OF AO. THE CIT (A) ALSO UPHELD AOS ACTION FOR REOPENING. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF PARTIES AND RECORDS PERUSED. THE DISPUTE IS IN RESPECT OF RS.6,30,000/- INVESTED IN BAKWELL BISCUITS LTD. THE ASSESSEE EXAMINED ON OATH ON 15-1-2007 WHEREIN IT W AS STATED THAT THE INVESTMENT WAS MADE OUT OF HIS CASH CREDIT ACCOUNT WITH DENA BANK MAINTAINED FOR HIS FOOD BUSINESS. RS. 1,46,000/- LOAN WAS TAKEN FROM BHAVIR MANDLI. STATEMENT ON OATH OF ASSESSEES FATHER WAS ALSO RECORDED ON 3-5-2008 WHE REIN IT WAS CONFIRMED ABOUT THE INVESTMENT AND EXPLAINED THAT THE SOURCE OF INV ESTMENT WAS MADE OUT OF WHOLESALE BUSINESS OF BISCUITS AND OTHER PROVISIONA L ITEMS. THE AO SIMPLY STATED THAT HE IS NOT SATISFIED WITH THE EXPLANATION FURNI SHED BY THE ASSESSEE WITHOUT CONTRAVERTING THE MATERIAL AND EVIDENCE FURNISHED B Y THE ASSESSEE. THE ADMITTED FACT THAT THE ASSESSEE WAS DOING BUSINESS. THE ASSE SSEE DECLARED INCOME OF ITA N O.1202/AHD/2010. ASSES SMENT YEAR 2005-06 3 BUSINESS FOR THE YEAR UNDER CONSIDERATION IS RS. 48 ,960/-. IN ADDITION TO THAT THE ASSESSEE WAS ALSO DOING AGRICULTURE ACTIVITIES AND INCOME DECLARED FOR THE YEAR IS RS.24,000/-. THE ASSESSEE MADE INVESTMENT FROM BOOK S OF ACCOUNT/CASH CREDIT ACCOUNT. THE AO AND CIT (A) BOTH DID NOT CONTRAVENE TO THE FACT THAT THE ASSESSEE TOOK LOAN OF RS.1,46,000/- FROM BHAVIR MANDLI. THIS FACT IS ALSO NOT CONTROVERTED THAT WHEN ASSESSEE WAS DOING BUSINESS AND AGRICULTU RE OPERATION THE PAST SAVING ALSO CANNOT BE DOUBTED. IF WE CONSIDER ALL THESE FA CTS TOGETHER WE FIND THAT THE ASSESSEE HAS EXPLAINED THE INVESTMENT OF RS.6,30,00 0/- VERY WELL IN ACCORDANCE WITH LAW. APART FROM ALL THESE FACT IT IS ALSO FACT THAT THE INVESTMENT WAS RECORDED IN BOOKS OF ACCOUNT/CASH CREDIT ACCOUNT. SECTION 69 IS APPLICABLE ONLY IN THE CASE WHERE INVESTMENT IS NOT RECORDED IN BOOKS OF ACCOUN T. THUS, IN THE CASE UNDER CONSIDERATION ADDITION U/S. 69 IS NOT WARRANTED. IN THE LIGHT OF ABOVE DISCUSSION WE DELETE THE ADDITION OF RS.6,30,000/-. 6. SINCE WE DECIDED THE ISSUE ON FIRST GROUND I.E. MERIT OF THE CASE THEREFORE WE DO NOT THINK NECESSARY TO ADJUDICATE LEGAL GROUND/S ECOND GROUND CHALLENGING REOPENING. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 10 2 - 2012 . SD/- SD/- (MUKUL KR. SHRAWAT) (A. L.GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA N O.1202/AHD/2010. ASSES SMENT YEAR 2005-06 4 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-VI,AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 31 - 01 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 31 /01 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 9 -2 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 10 - 2 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 10 - 2 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13 - 2 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..