The DCIT Circle-8(3), Ahmedabad V. Shri Jaswantlal M Shah, Ahmedabad

ITA 1272/AHD/1999

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9307 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-08-2009
• Assessment Year: 1993-1994
• Appeal Filed On: 01-06-1999
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDEV
• Assessee Lawyers: T P HEMANI
• Keywords: Business income; Loose papers; Share purchase agreement; Opportunity of being heard; Corroborative evidences; Documents seized; TDS; Set aside
• Section: 234B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, A-BENCH, AHME DABAD. BEFORE :SHRI H L KARWA, JUDICIAL MEMBER, AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER. ITA NO. 1138, 1139, 1140/AHD/2004 (ASSESSMENT YEARS 1991-92, 1992-93, 1996-97) JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. VS. THE ASSTT. CIT, CIRCLE-11, AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO. 1100 AND 1101/AHD/2004 (ASSESSMENT YEARS 1992-93) THE ASSTT. CIT, CIRCLE-11, AHMEDABAD. VS. JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO. 2656, 2657/AHD/2003 (ASSESSMENT YEARS 1994-95, 1995-96) JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. VS. THE DY. CIT, CIRCLE-8(3), AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO. 2091,2092/AHD/2003 (ASSESSMENT YEARS 1 994-95, 1995-96) THE ASSTT. CIT, CIRCLE-11, AHMEDABAD. VS. JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO.1366/AHD/1999 (ASSESSMENT YEAR S 1993-94) JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. VS. THE ASSTT. CIT, CIRCLE-8(3), AHMEDABAD. 2 (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO.1272/AHD/1999 (ASSESSMENT YEAR S 1993-94) THE DY. CIT, CIRCLE-8(3), AHMEDABAD. VS. JASWANTLAL M. SHAH 30/1, PANKAJ SOCIETY, BHATTA, PALDI, AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO.31-109-HY-0984 ITA NO.1879/AHD/2003 (ASSESSMENT YEAR S 1994-95) THE ASSTT. CIT, CIRCLE-11, AHMEDABAD. SHRI. BHARAT D. SHAH, 501 B MANGALYA TOWERS BHATTA, PALDI, AHMEDABAD. (APPELLANT) (RESPONDENT) PAN/GIR NO. 721-B FOR ASSESSEE SHRI T.P. HEMANI AR FOR REVENUE SHRI JAGDEV, DR ORDER PER BENCH: IN THE ABOVE CASES ASSESSMENT YEARS 1991-92, TO 199 6- 97 ARE INVOLVED. THERE ARE CROSS APPEAL ALSO FOR THESE ASSESSMENT YEARS AND COMMON ISSUES ARE INVOLVED. THEREFORE THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. IN THIS CASE, THE ASSESSEE SHRI. JASHWANTLAL M. SHA H & HIS ASSOCIATE, & SHRI. BHARAT D. SHAH WERE SEARCHED BY THE DEPARTMEN T ON 25-08-1994. THEY WERE ALLEGED TO BE CARRYING OUT HAWALA OPERA TIONS AND THEREBY PROVIDING HAWALA ENTRIES AND EARNING COMMISSION A ND INTEREST THEREON. THE BASE YEAR IS CONSIDERED AS ASSESSMENT YEAR 1993 -94 THEREFORE IT IS TAKEN UP FIRST FOR THE SAKE OF CONVENIENCE. IN THE ASSESSMENT YEAR 1993-94 THE ASSESSEE AND TH E DEPARTMENT, BOTH HAVE FILED APPEALS. IN ASSESSEES APPEAL ITA NO. 1 366/AHD/1999 AND IN DEPARTMENTAL APPEAL ITA NO. 1272/A/1999, FOLLOWING GROUNDS ARE RAISED. 3 A.YR. 1993-94 ASSESSEES GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INCOME OF SHR I. BHARATBHAI IN THE HANDS OF THE APPELLANT ON SUBSTAN TIVE BASIS. AS A MATTER OF FACT SHRI. BHARATBHAI HAS MADE A SEP ARATE DECLARATION AT THE TIME OF SEARCH AND HE HAS EVEN F ILED SEPARATE RETURN OF INCOME. SINCE BHARATBHAI IS A SEPARATE T AX PAYING ENTITY, HIS INCOME SHOULD BE TAXED IN HIS HANDS ALO NE. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE INTEREST INCOME AT RS. 20,11,691/-. THIS ACTION OF LEARNED COMMISSIONER O F INCOME TAX(APPEALS) IN ESTIMATING THE INCOME AT AN IMAGINA RY FIGURE IS UNSCIENTIFIC, ARBITRARY AND BASELESS AND THEREFORE DESERVES TO BE DELETED. WITHOUT PREJUDICE LD. LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN TAKING THE GROSS INTEREST FIGURE AT RS. 69,35,074/- AS A MATTER OF F ACT THIS FIGURE OF GROSS INTEREST INCLUDES INTEREST FIGURE EARNED B Y SHRI. BHARATBHAI ALSO WHICH HAS TO BE ASSESSED IN HIS HAN DS. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE PORTION OF I NTEREST RETAINED BY THE APPELLANT AT 6%. AS A MATTER OF FA CT THE APPELLANT EARNS ONLY 1% OUT OF THE SALE TRANSACTION S AND THIS FACT GETS FURTHER SUPPORT FROM THE STATEMENT GIVEN BY THE APPELLANT AT THE TIME OF SEARCH. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF EXPENSES OF RS. 2,03,000/-. ALL THE DETAILS OF EXPENDITURE WER E PLACED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) AND THE EXPENDITURE CLAIMED ARE MOST REASONABLE LOOKING TO THE NATURE OF BUSINESS OF THE APPELLANT. LEARNED COMMI SSIONER OF INCOME TAX(APPEALS) SHOULD HAVE ALLOWED THE ENTIRE CLAIM OF THE EXPENDITURE. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)HAS ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING UPON THE GR OUND FOR LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. GROUNDS OF DEPARTMENT 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN DIRECTING TO ADOPT GROSS INT EREST OF RS. 62,16,327/- INSTEAD OF RS. 64,00,000/- TAKEN BY THE ASSESSING OFFICER. 4 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 99,625/- BEING EXPENSES CLAIMED FROM INTEREST INCOME. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 5,04,708/- BEING INTEREST INCOME OF BHARAT D. SHAH TO BE TAXED ON SUBSTANTIVE BASIS IN THE CASE OF THE ASSESSEE. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALS O ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO ALLOW SHARE BUSINESS LOSS CLAIMED JUST BEFORE ONE DAY OF COMPLETION OF A SSESSMENT ORDER WITHOUT ANY SUPPORTING EVIDENCES. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. IT IS THEREFORE, PRAYED IN APPEAL THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MAY BE SET ASID E AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE AB OVE EXTENT. 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: 3. DURING THE COURSE OF SEARCH PROCEEDINGS, IT WAS REVEALED THAT ASSESSEE HAS BEEN RUNNING SEVERAL PROPRIETARY CONCE RNS (85 TO BE PRCISE) AND OTHER CONCERNS/ OFFICES, IN THE NAMES OF RELAT IVE AND FRIENDS (TOTAL NUMBER OF SUCH CONCERNS 164). THESE CONCERNS WERE ENGAGED IN THE BUSINESS OF PROVIDING LOAN ENTRIES BY TAKING CASH AND ISSUING CHEQUES AGAINST CASH SO RECEIVED. IT WAS EXPLAINED BY THE ASSESSEE DURING THE SEARCH PROCEEDINGS AND ALSO ASSESSMENT PROCEEDINGS THAT ANY PERSON WHO WANTS TO GET MONEY BY CHEQUE BRINGS HIS MONEY IN CA SH. THIS CASH IS DEPOSITED IN THE BANK ACCOUNT OF ONE OR MORE OF THE GROUP CONCERNS FLOATED AND RUN BY THE ASSESSEE AND HIS ASSOCIATES. THEREAFTER THE MONEY IS ROTATED INTO 4 OR 5 CONCERNS SO AS TO BLUR/ CAMO UFLAGE THE CONNECTION BETWEEN THE CONCERNS WHICH FOR THE FIRST TIME INTRO DUCED THE CASH AND ULTIMATE LANDING CONCERN WHICH ISSUED THE CHEQUE. F OR EXAMPLE, IF CASH IS INTRODUCED IN CONCERN A THEN IT IS ROTATED THR OUGH BANKING CHANNELS IN CONCERNS B, C, D, E, F, ETC. AND IT FINALLY COME S INTO THE ACCOUNT OF 5 CONCERN G FROM WHERE IT IS LENT BY CHEQUE TO THE PE RSON WHO BROUGHT CASH TO ASSESSEE. THE SAID AMOUNT APPEARED IN THE ACCOUNT BOOKS OF CONCERN G AS A LOAN GIVEN TO THAT PERSON AT THE I NTEREST RATE OF 18%. OUT OF INTEREST EARNED AT A RATE OF 18%, THE INTERE ST AT 12% IS RETURNED TO THE PERSON WHO HAD BROUGHT THE CASH. THUS, INTERES T AT A RATE OF 6% REMAINED WITH ASSESSEE GROUP. IT IS FURTHER CLAIME D THAT INTEREST AT RATE OF 1% IS GIVEN AS INCENTIVE COMMISSION TO THE MIDDLE M AN WHO BROUGHT THE CLIENT, 3 TO 4% IS GIVEN TO THE SISTER CONCERN WHER E MONEY IS FIRST INTRODUCED AND ONLY 1% REMAINED WITH THE ASSESSEE, MANAGING THE AFFAIRS OF THE ENTIRE GROUP. IT WAS FURTHER CLAIMED THAT A LL THESE PROPRIETARY CONCERNS ARE SEPARATE LEGAL ENTITIES ASSESSED TO TA X AND THE TAX IS DEDUCTED AT SOURCE FROM THE INTEREST EARNED BY THEM. THEY M AINTAIN SEPARATE BANK ACCOUNTS OPERATED INDIVIDUALLY OR THROUGH POWER OF ATTORNEY. 4. DURING THE COURSE OF SEARCH PROCEEDINGS, THE ASS ESSEE MADE DECLARATION OF UNDISCLOSED INCOME OF RS. 65,00,000/ - WHICH WAS EXPLAINED BY HIM BEFORE THE A.O. AS UNDER: 2.6 THE ASSESSEE ALONGWITH THE ABOVE LETTER, FURNI SHED THE WORKING OF DISCLOSURE OF RS.65 LAKHS ACCORDING TO T HE STATEMENT RECORDED U/S. 132(4) ON 25.8.94 AS UNDER: - --------------------------------------------------- ------------------------- AMOUNT OF INTEREST 18% RS.2,50,00,000 1/3 RD = 6% = 85,00,000 LESS: EXPENSES 30,00,000 ------------ 55,00,000 OTHER INCOME 10,00,000 GROSS INCOME DISCLOSED 65,00,000 --------------------------------------------------- ----------------------- 6 5. IN THE STATEMENT TAKEN ON OATH DURING SEARCH PR OCEEDINGS, HE STATED THAT HE RECEIVED RS. 2.5 CRORES BY WAY OF INTEREST AT A RATE OF 18% OF THE TOTAL AMOUNT OF LOAN GIVEN FROM ALL HIS PROPRIETARY CONCERNS SINCE THE STARTING OF THE SAID BUSINESS. OUT OF THE TOTAL SU M 1/3 THEREOF I.E. RS. 80 LACS TO 85 LACS WAS RECEIVED BY HIM TOWARDS COMMISS ION CHARGES AGAINST LOAN ENTRIES GIVEN BY HIM. OUT OF THE SAID AMOUNT RS. 25,00,000/- TO 30,00,000/- WERE SPEND TOWARDS EXPENSES FOR MAINTAI NING FILES , OFFICE AND TOWARDS MISC. EXPENSES AND NET INCOME EARNED WA S RS. 55,00,000/-. THIS SUM OF RS. 55,00,000/- WAS FURTHER ROTATED ON WHICH IT EARNED FURTHER SUM OF RS. 10,00,000/- AND THUS TOTAL INCOME AROUND IS RS. 65,00,000/- WHICH WAS DISCLOSED BY HIM. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT IT HAD EARNED AN INTEREST OF RS. 3,8 1,97,447/-.HE HAS RETAINED ONLY 1/6 THEREOF AT RS. 63,85,987/- OUT OF WHICH EXPENSES WERE ALSO INCURRED BY HIM. THE WORKING WAS GIVEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS UNDER: AMOUNT OF INTEREST RS.3,81,97,447 FOR THE PERIOD OF F.Y. 90-91 TO 95-96 1/6 = 3% = RS.63,85,987 LESS: EXPENSES RS.28,33,500 ---------------- RS.35,32,487 ---------------- 7. THE ASSESSING OFFICER HOWEVER DID NOT AGREE. AC CORDING TO HIM ASSESSEE HAS NOT FURNISHED ANY EVIDENCE AS TO HOW H E HAS ARRIVED AT ONLY 1/6 TH OF THE INTEREST RECEIVED BY HIM AND ALSO THE DETAI LS OF EXPENSES CLAIMED BY HIM. THE ASSESSEE HAS ALSO NOT GIVEN TH E DETAILS OF TOTAL LOANS 7 GIVEN BY HIM THROUGH CHEQUES BY ACCEPTING CASH. HE THEREAFTER CALLED FOR THE BANK STATEMENTS FROM DIFFERENT BANKS AND WORKED OUT TOTAL OF CREDITS IN THESE ACCOUNTS FOR THE FINANCIAL YEAR 1992-93 AT RS. 31,67,66,454/- AND FURTHER WORKED OUT INTEREST AT THE RATE OF RS. 6% T HEREON AT RS. 1,26,70,656/-. HE ALLOWED EXPENDITURE OF RS. 3,00, 000/- FOR THE ASSESSMENT YEAR 1993-94 AS AGAINST RS. 5,03,000/- C LAIMED BY THE ASSESSEE. ENTIRE WORKING DONE BY THE ASSESSING OFF ICER IS REPRODUCED BELOW: CHART -1 SR. NO. NAME OF THE BANK CREDIT RS. 1. PRAGATI CO. OP. BANK LTD. RELIEF ROAD BRANCH 28,56,67,032 2. BANK OF BARODA VASANA BR. 80,508 3. SOCIAL CO. OP. BANK LTD. KHAMASA BR. 8,30,672 4. SYNDICATE BANK MANEKSHOWK BRANCH 31,07,859 5. MANEKSHOWK CO. OP. BANK LTD. 31,34,278 6. NAVNIRMAN CO. OP. BANK LTD. ASARWA BR. 17,11,680 7. COLOUR MERCHANT BANK ASTODIA BR. 1,67,65,085 8. NAVNIRMAN CO. OP. BANK LTD. DELHI GATE BR. 54,69,340 GRANT TOTAL 31,67,66,454 CHART -2 SR. NO. PERIOD COVERED AMT. OF DEPOSIT & WORKING RT. OF INT. TOTAL INT. RS. 1. 1/4/92 TO 30/6/92 OF TOTAL DEPOSIT RS.7,91,91,613 1.5% 11,87,874 2. 1/7/92 TO 30/9/92 OF TOTAL DEP. RS.15,83,83,227 1.5% 23,75,748 3. 1/10/92 TO 31/12/92 OF TOTAL DEP. RS.23,75,74,840 1.5% 47,51,496 8 4. 1/1/93 TO 31/3/93 11/12 TH OF DEP. RS.29,03,69,249 1.5% 43,55,538 TOTAL INTEREST AT THE RATE OF 6% (AGGREGATE) 1,26,7 0,656 CHART-3 (CALCULATION OF INCOME BY THE A.O.) BUSINESS INCOME: INTEREST RECEIVED/RECEIVABLE AS DISCUSSED IN THE ORDER 1,26,70,656 LESS: DEDUCTION OF EXPENSES ALLOWED AS DISCUSSED - 3,00,000 -------------- TOTAL INCOME 1,23,70,656 I.E. 1,23,70,660 8. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) THE ASSESSEE EMPHASIZED ON A CHART WHICH WAS REPRODUCED BY THE ASSESSING OFFICER IN HIS ORDER. IT CONTAINED THE DETAILS OF I NTEREST EARNED BY THE ASSESSEE, COMMISSION CLAIMED THEREON AND EXPENSES F URTHER CLAIMED THERE FROM. THIS CHART IS ANNEXED BY LD. C.I.T. IN THE AP PELLATE ORDER AS CHART A. FOR THE SAKE OF CONVENIENCE THIS CHART IS ALS O REPRODUCED BELOW : CHART A F.Y. TDS RS. INT.RECD. RS. NEP025EC RS. EXT- EXP RS. NET PROFIT RS. ACCOUNT EXP. RS. 90- 91 27142 2598746 433123 145000 288123 36000 91- 92 113349 5642547 640169 241500 698669 77000 92- 93 151764 6935074 1155846 377000 778846 126000 93- 94 732342 8094575 1349099 426000 923099 144000 94- 95 632776 8922882 1487147 416000 1071147 159000 9 95- 96 284767 6003623 1000603 590000 410603 96000 1942140 38197447 6365987 2195500 4170487 3532487 9. BEFORE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) IT WAS ALSO CONTENDED THAT THE ASSESSING OFFICER HAS FRAMED TH E ASSESSMENT WITHOUT GIVING OPPORTUNITY OF BEING HEARD AND THE METHOD AD OPTED FOR COMPUTATION OF THE INCOME BY ADDING THE CREDIT ENTR IES FROM THE BANK STATEMENTS SUFFERED FROM SEVER INFIRMITIES. ACCORD INGLY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) REMANDED THE MA TTER BACK TO THE ASSESSING OFFICER WHO AFTER CARRYING OUT FURTHER IN QUIRES REPORTED BACK TO THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). T HE SUMMERY OF THE REPORT DATED 22/03/99 OF THE ASSESSING OFFICER AS NOTED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS AS UNDER: (I) THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUN TS IN RESPECT OF HIS HAWALA BUSINESS INCOME AND IN THE ABSENCE OF BO OKS OF ACCOUNTS, HE WAS ASKED TO FURNISH THE DETAILS OF IN COME/INTEREST RECEIVED BY DIFFERENT PROPRIETARY CONCERNS AND CRED ITED IN THE BANK ACCOUNTS DURING ASSESSMENT PROCEEDINGS. HOWEVE R, THE ASSESSMENT HAD FAILED TO FURNISH THE DETAILS AND TH E BANK STATEMENTS WERE ALSO NOT PRODUCED DURING ASSESSMENT PROCEEDINGS. AND THEREFORE, THE BANK STATEMENTS WER E COLLECTED BY THE A.O. DIRECTLY FROM THE VARIOUS BANKS AND ACC ORDING TO THE A.O. IT IS NOT CORRECT TO SAY THAT EVIDENCE WAS COL LECTED BEHIND THE BOOK OF THE ASSESSEE. (II) DURING THE ASSESSMENT PROCEEDINGS, A CHART GIV ING YEAR WISE INCOME FROM HAWALA BUSINESS HAS BEEN FILED. HOWEVER , THE SUPPORTING AND CORROBORATIVE EVIDENCES WERE NOT PRO DUCED AND HEAD WISE CLARIFICATION IN RESPECT OF BANK ENTRIES WAS NOT FURNISHED. (III) AT THE REMAND REPORT STAGE, THE ASSESSEE HAS FILED CLARIFICATION IN RESPECT OF VARIOUS BANK ENTRIES UNDER THE HEADS LIKE INTERNAL & REPETITIVE TRANSACTION, REPAYMENT OF LOANS, P AYMENT FOR PURCHASES, CASH WITHDRAWALS, ETC. IN THIS REGARD THE A.O. HAS 10 REPORTED THAT ON VERIFICATION OF THE STATEMENT THE ENTRIES ARE SEEMED TO BE ROUTED THROUGH 4 TO 5 PROPRIETARY CONC ERNS. THE HEAD WISE BIFURCATION EXPLAINING THE ENTRIES BASED ON THE PARTICULARS NARRATED BY THE BANK WERE ALSO FURNISHE D BY THE ASSESSEE AT THIS STAGE. HOWEVER, THIS INFORMATION H AD BEEN FURNISHED IN RESPECT OF ONLY PRAGATI CO. OP. BANK E NTRIES, WHICH TOTALED TO RS.28,27,25,918/-. FOR THE REMAINING BAN KS, DETAILED AND HEAD WISE WORKING IS NOT FURNISHED. THE ASSESSE E HAS ALSO NOT PRODUCED RELEVANT SUPPORTING DOCUMENTARY EVIDEN CE FOR HIS EXPLANATIONS WITH REGARD TO THE HEAD WISE ENTRIES. 10. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE A ND REMAND REPORT OF THE ASSESSING OFFICER, LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) INFERRED THAT ONE CASH DEPOSIT IN ONE ACCOUNT IS RO TATED IN SEVERAL ACCOUNTS BEFORE LANDING MONEY BACK BY CHEQUE TO THE PERSON WHO BROUGHT CASH BUT THERE IS NO EVIDENCE TO SUPPORT THIS INFERENCE . VARIOUS DETAILS FURNISHED BY THE ASSESSEE IN RESPECT OF INTERNAL AN D REPETITIVE TRANSACTIONS, PAYMENT OF LOAN, PAYMENT FOR PURCHASES, CASH WITHD RAWALS, PAYMENT FOR EXPENSES, CLOSING BALANCES OR CHEQUES RETURNED ARE NOT FULLY VERIFIABLE. THE ASSESSEE DID NOT FURNISH FULL DETAILS TO THE AS SESSING OFFICER EVEN AT THE REMAND REPORT STAGE. WHEN LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFRONTED THE ASSESSEE, FURTHER SUBMI SSIONS WERE MADE. ACCORDING TO THE ASSESSEE THERE IS COMPUTER DATA AVAILABLE FROM WHICH A SUMMARY CAN BE WORKED OUT SHOWING LOANS GIVEN TO RESPECTIVE BORROWERS, GROSS INTEREST RECEIPTS, AND AMOUNT OF T DS MADE. IF ONLY THE ENTRIES PERTAINING TO ASSESSEE ARE TAKEN INTO CONSI DERATION, THEN THE ASSESSEE HAD IN ALL EARNED DURING THESE YEARS, A SU M OF RS. 8,51,590/- @ 3% FROM DEPOSITORS ON WHICH AN EXPENDITURE OF RS. 3 ,31,000/- IS INCURRED LEAVING AN INCOME OF RS. 5,20,590/-. THE ASSESSEE CATEGORIZED EXPENSES INTO 3 MAIN CATEGORIES AS UNDER: (1) COMMISSION, BROKERAGE & INCENTIVE, (2) NAME-HIRING, EXPENDITURE OF PROPRIETARY CONCER NS, 11 (3) ADMINISTRATIVE AND MAINTENANCE EXPENSES 11. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. SHE FOUND THAT THE ASSESSEE IS NOT MAINTAINING ITS BOOKS OF ACCOUNT SO AS TO FACILITAT E COMPUTATION OF INCOME. SHE HOWEVER AGREED WITH THE ASSESSEE THAT TO QUANTIFY THE LOAN AMOUNTS AFTER EXCLUDING INTERNAL AND REPETITIVE TRA NSACTIONS BETWEEN VARIOUS CONCERNS, LOAN REPAYMENTS AND OTHER DISBURS EMENTS WOULD BE A HIGHLY TEDIOUS, TIME-CONSUMING JOB AND MAY NOT ALSO BE FULLY VERIFIABLE. BUT SHE DISAGREED WITH THE ASSESSEE THAT THE METHOD SHOULD NOT BE DISCARDED MERELY BECAUSE IT CREATES A GIGANTIC TASK . SHE ALSO DID NOT FULLY AGREE WITH THE ALTERNATIVE METHOD OF COMPUTATION OF INCOME FROM THE COMPUTER DATA ON THE GROUND THAT IT IS ALSO NOT VER IFIABLE. SHE HOWEVER, CONSIDERED THE STATEMENT MADE DURING SEARCH AND DIS CLOSURE MADE THEREIN BY THE ASSESSEE AND INVESTMENT MADE BY HIM. THUS, FOR EXAMINING WHETHER THE ASSESSEE HAS RECEIVED OR RETAINED 6% I. E. 1/3 OF 18% OR 3% I.E. 1/6 TH OF 18% OR 3% I.E. 1/6 TH OF 18%, SHE CONSIDERED THE STATEMENTS OF THE ASSESSEE RECORDED DURING SEARCH PROCEEDINGS. T HEY ARE ALSO RELEVANT FOR OUR PURPOSES AND HENCE THEY ARE REPRODUCED BELO W. IN REPLY TO QUESTION NO. 26 AND THE ST ATEMENT RECORDED ON 25/8/1994, THE APPELLANT HAD STATED AS UNDER:- IN THE CLOTH BUSINESS SHOWN IN THE NAMES OF THE ME MBERS OF MY FAMILY, RELATIVES AND FRIENDS, BUSINESS OF GIVIN G CASH CREDIT ENTRY WAS ALSO DONE. IF ANY PARTY WANTS CASH CREDIT LOAN, IN THAT EVENT EITHER FROM THAT PARTY OR FROM ANY OTHER PARTY, CASH AMOUNT IS BEING TAKEN AND IN THE ACCOUN TS OF PROPRIETARY CONCERNS GIVING SUCH CASH CREDIT LOAN, CASH SALE EQUIVALENT TO CASH CREDIT LOAN AMOUNT IS SHOWN. FOR SHOWING CASH SALE, PURCHASE IS BEING SHOWN FROM OTHER PROPR IETARY CONCERN AND PAYMENT THEREOF IS BEING SHOWN AS OUTST ANDING. THEREAFTER, THE PARTY CONCERNED TAKING CASH CREDIT LOAN IS PAYING INTEREST AT THE RATE OF 18% PER ANNUM TO THE PROPRIETARY CONCERN AND OUT OF WHICH, INTEREST @ 12 % PER ANNUM IS BEING PAID TO THE PARTY FROM WHOM CASH IS TAKEN 12 (INTRODUCED), WHEREAS BALANCE AMOUNT OF INCOME EARN ED AT THE RATE OF 6% INTEREST PER ANNUM REMAINS WITH US. AMOUNT OF INTEREST IS BEING PAID IN CASH. 7.3 IN RESPONSE TO Q. NO. 73, THE REPLY GIVEN IS A S UNDER:- I HAVE STARTED/OPENED PROPRIETARY CONCERNS IN THE NAMES OF THE MEMBERS OF MY FAMILY, FRIENDS AND RELATIVES AND NAMES & ADDRESS THEREOF ARE FED IN THE COMPUTER INSTALLED AT KIDS CAMP AND IS STORED IN THE HARD-DISK OF THE SAID COM PUTER. THROUGH THESE PROPRIETARY CONCERNS, WE ARE DOING BU SINESS OF GIVING LOAN ENTRIES. ON SUCH LOAN ENTRIES, THE C ONCERNED PROPRIETARY CONCERN IS GETTING INTEREST @ 18% BY CH EQUE OR BY DRAFT. OUT OF THE SAID INTEREST AMOUNT, 12% INTE REST AMOUNT IS WITHDRAWN IN CASH AND IS PAID TO THE PART Y AND WE ARE GETTING 6% BY WAY OF COMMISSION. OUT OF THE SAI D AMOUNT, 30% AMOUNT (30 PAISE OUT OF ONE RUPEE) IS B EING SPENT TOWARDS MAINTENANCE OF FILES OF THE CONCERNED PROPRIETARY CONCERNS AND TOWARDS MISCELLANEOUS EXPE NSES. THE BALANCE AMOUNT RESULTS INTO OUR UNDISCLOSED INC OME. 7.5 IN THE STATEMENT RECORDED ON 20/12/1994 I.E. D URING POST- SEARCH INQUIRIES, IN REPLY TO QUESTION NO. 3, THE A PPELLANT STATED AS UNDER:- IN THIS REGARD, I WOULD LIKE TO STATE THAT FROM TH ESE LOAN ENTRIES 6% INTEREST, WHICH IS RETAINED, IS THE SOUR CE OF OUR INCOME AND THE SAME IS DIFFERENT THAN THE INCOME OF OUR SHARE TRANSACTION. OUT OF THE INTEREST WHICH IS PAI D BY THE OUTSIDE PARTY TOWARDS THE LOAN ENTRIES, 12% CASH IS GIVEN BACK AND THEREFORE, WE ARE MAKING THE ADJUSTMENT OF PROFIT & EXPENSES IN ALL OUR PROPRIETARY CONCERNS. FOR THIS CASH LOAN, ENTRIES ARE GIVEN IN CHEQUE AND THEREFORE, BOGUS PU RCHASE BILLS ARE USED FOR THIS PURPOSE AND SALE IS SHOWN I N BOGUS CASH AND THE CASH OF THE PARTIES IS INTRODUCED IN O UR PROPRIETARY CONCERNS. AFTER THAT, THROUGH OUR INTER NAL TRANSACTIONS, ENTRIES ARE GIVEN IN CHEQUE. WHERE IN TEREST IS RECEIVED ON THESE ENTRIES, THEN NEARLY 12% I.E. 2/3 RD IS GIVEN BY US TO THE PARTY IN CASH AND 1/3 RD IS REMAINING WITH US. FOR RETURNING THIS 2/3 RD AND FOR GETTING THIS 1/3 RD FROM THE PROPRIETARY CONCERNS, BOGUS EXPENSES ARE SHOWN AND MONEY IS WITHDRAWN AND FROM THIS WITHDRAWAL 3% IS GIVEN A S BROKERAGE IF ANY PERSON IS BRINGING OUTSIDE PARTY T O US AND THE REMAINING 3% REMAINS WITH US. I HAVE COMPLETE C ONTROL 13 ON THE 3% AND 4% WHICH REMAINS WITH US AND NOW & WH ERE IT HAS TO BE INVESTED IS DECIDED BY ME. THUS, SHE INFERRED THAT AS GENERAL RULE ASSESSEE IS RETAINING 6% AS HIS COMMISSION. FINALLY, SHE CONSIDERED THE CHART GIVE N BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER ON PAGE 7 SHOWING T OTAL AMOUNT OF INTEREST EARNED BY THE ASSESSEE WHICH HAS ALSO BEEN REPRODUCED BY US IN THIS ORDER. 12. SHE PREPARED SIMILAR CHARTS IN THE CASE OF BHAR ATKUMAR DHIRAJLAL SHAH AND FOR JASHVANTLAL NITINBHAI SHAH. THESE 3 C HARTS WERE ANNEXED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AS ANNE XURE-1 TO HER APPELLATE ORDER. CHART-B AND CHART-C REPRESENT RES PECTIVELY TOTAL OF AMOUNT OF INTEREST RECEIVED IN THE CASE OF PROPRIET ARY CONCERNS RUN BY BHARATKUMAR DHIRAJLAL SHAH AND IN THE CASE OF PROPR IETARY CONCERNED RUN BY JASHVANT MAFATLAL SHAH. THEY ARE REPRODUCED AS U NDER: CHART-C A.Y. TDS INT_RECEID NEP025PEC EXT_EXP NET_PROFIT AC COUNT EXP. NET CAPITAL 90- 91 14227 ________ 171444 45000 126444 14000 112444 91- 92 36474 1541871 256979 56500 200479 18000 182479 92- 93 4319 1825540 304256 130000 174256 12000 132256 93- 94 167481 1861598 310267 123500 186767 40000 138767 94- 95 144024 ________ 325146 143000 392146 51000 341146 95- 96 ______ 808025 134669 180000 45331 15000 60331 ______ 10276579 1712761 678000 1034761 188000 94675 1 CHART B THE TOTAL OF PROPRIETARY CONCERNS RUN BY JASHVANT M . SHAH A.Y. TDS INT NEP025 PEC EXT_EXP NET_PROFI T ACCOUN T EXP. NET CAPITAL 90-91 ______ 1570084 261679 190000 161679 22000 139 679 91-92 76857 4100676 683190 185000 498190 59000 4391 90 14 92-93 108570 5109534 851590 247000 604590 84000 520 390 93-94 562761 6216327 1036057 302500 733557 96000 63 7557 94-95 488752 5711999 932001 _________ 679001 ______ __ 571001 95-96 263217 5195598 863934 410000 455934 81000 374 934 1513090 27904218 4650451 1517500 450000 2632951 CHART A IS IN RESPECT OF INTEREST EARNED BY CONCERN S RUN BY JASHVANT M. SHAH, NITINBHAI CHIMANLAL DOSHI AND BHRATBHAI DHIRA JLAL SHAH. THUS, IN NUTSHELL, LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) ACCEPTED THE COMPUTATION OF TOTAL INTEREST SHOWN TO HAVE BEEN RE CEIVED BY THE ASSESSEE AND HIS CONCERNS DURING FINANCIAL YEARS 90-91 TO 95 -96 AND DIRECTED TO CHARGE INTEREST FOR THE ASSESSEE AT 6%. THUS FOR A SSESSMENT YEAR 1993-94, SHE ACCEPTED THE CLAIM OF THE ASSESSEE THAT GROSS I NTEREST EARNED BY THE ASSESSEE IS AT RS. 69,35,074/- AS GIVEN IN CHART-A 13. SHE WORKED OUT ASSESSEES INCOME FROM THE FIRM AT 6% AT RS. 23,11,695/-. (BEING 1/3 RD OF RS. 69, 35,074/-). REGARDING CLAIM OF EXPENSES AT RS. 5.03 LAC, LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOUND THAT THE SAME IS NOT VERIFIABL E AND THEREFORE SHE UPHELD THE ESTIMATE OF RS. 3,00,000/- MADE BY THE ASSESSING OFFICER. ACCORDINGLY, SHE DIRECTED TO COMPUTE THE INCOME OF THE ASSESSEE AT RS. 20,11,691/- AS UNDER: INTEREST INCOME/COMMISSION RECEIPTS = RS . 23,11,691/- LESS: EXPENSES = RS. 3,00,000/- ------------------- NET INCOME RS.20,11,691/- ------------------- 14. AGAINST THE ABOVE WORKING GIVEN BY LEARNED COMM ISSIONER OF INCOME TAX(APPEALS), WE HAVE HEARD LD. A.R. AND LD. D.R. LD. A.R. 15 BASICALLY EMPHASIZED ON THE ARGUMENT RAISED BY HIM BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THAT IT HAS TO PART AWAY SOME COMMISSION TO MIDDLE MAN WHO BRINGS CLIENTS TO HIM, BUT HE EXPRESSED HIS INABILITY TO PRODUCE ANY EVIDENCE IN THIS BEHAL F. HE ALSO FAIRLY ACCEPTED THAT EVEN WORKING ASSESSEES INCOME AT 6% IS ONLY ESTIMATE. SIMILARLY LD. D.R. COULD NOT POINT OUT AS TO WHAT I S THE MISTAKE IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) AND WHY THE INCOME OF THE ASSESSEE BE ENHANCED AS AGAINST WHAT IS COMPUTED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 15. AFTER HEARING THE PARTIES AND GOING THROUGH T HE MATERIAL ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) ON THE ISSUE OF ESTIMATION OF INCOME OF THE ASSESSEE. WE FULLY AGREE WITH THE REASONING GIVEN BY THE LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF A CCOUNTS. THE ASSESSEE HAS NOT GIVEN ANY ANALYSES OF DIFFERENT ENTRIES AS TO WHICH ENTRY HAS BEEN ROTATED, HOW MANY TIMES AND IN WHICH ACCOUNT, SO AS TO FIND OUT EXACT AMOUNT OF CASH RECEIVED FROM DIFFERENT PARTIES WHO APPROACHED THE ASSESSEE TO ISSUE CREDIT ENTRIES BY CHEQUE. WE H AVE NO DOUBT IN OUR MIND THAT THE ASSESSEE IS INDULGING IN HAWALA ENT RIES AND IS HELPING OTHER PARTIES IN TAX EVADING TRANSACTIONS, WHEREBY APPARENTLY UNACCOUNTED CASH IS GIVEN TO ASSESSEE AGAINST WHICH CHEQUE IS I SSUED TO THOSE PARTIES WHO BROUGHT CASH AND THUS THOSE PARTIES ARE HELPED IN CONVERTING THEIR BLACK MONEY INTO WHILE. NO EVIDENCE IS FURNISHED A S TO HOW MUCH CASH IS ACTUALLY RETURNED TO THOSE PARTIES FROM INTEREST CH ARGED ON SUCH HAWALA ENTRIES. IT IS ONLY A CLAIM THAT ASSESSEE IS RETUR NING 12% OF THE INTEREST BACK TO THE PARTIES WHO WERE BROUGHT CASH TO HIM AN D THUS RETAINING ONLY 6%. THE ASSESSEE HAS SOUGHT TO FURTHER REDUCE HIS INCOME BY CLAIMING 16 EXPENSES THERE FROM FOR WHICH THERE IS ALSO NO EVID ENCE. EVEN THE DEPARTMENTAL OFFICERS HAVE NOT CARRIED OUT NECESSAR Y ANALYSIS OF THE BANK ACCOUNT SO AS TO EXACTLY FIND OUT HOW MUCH CASH ASS ESSEE HAS ACTUALLY RECEIVED AND FROM WHICH PARTIES AND HOW MUCH EXACT CASH HAS BEEN RETURNED OUT OF THE INTEREST CHARGED. UNDER THESE CIRCUMSTANCES ONLY AVAILABLE OPTION IS THE ESTIMATION OF THE INCOME EA RNED BY THE ASSESSEE AND THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS DONE AN EXCELLENT JOB IN BALANCING THE DEFICIENCY OF BOTH T HE PARTIES AND COME OUT WITH A REASONABLE ESTIMATE OF INCOME. THERE IS NO EVIDENCE TO DIFFER WITH THE ESTIMATE MADE BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS). UNDER THESE CIRCUMSTANCES, WE CONFIRM HER ORDER AND REJECT THE GROUND TAKEN BY THE REVENUE AS WELL AS BY THE ASSESSEE ON THIS ACCOUNT. THIS DISPOSES OF BOTH THE APPEALS ON THIS ISSUE WHICH AR E ACCORDINGLY DISMISSED. 16. GROUND NO. 5 IN ASSESSEES APPEAL IS RELATING TO CHARGE OF INTEREST UNDER SECTION 234B. IT IS CONSEQUENTIAL AND THEREF ORE DOES NOT REQUIRE ANY SEPARATE ADJUDICATION. IT IS ALSO DISMISSED. 17. AS A RESULT APPEAL FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE IS DISMISSED. ITA NO. 2091/A/2003(DEPARTMENTAL APPEAL) AND ITA NO. 2656/A/2003 (ASSESSEE APPEAL) (A.YR. 1994-95) 18. GROUNDS IN ASSESSEES APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) XVII, AHMEDABAED HAS ERRED IN LAW AND ON FACTS IN PASSIN G THE APPELLATE ORDER DATED 12-3-2003 FOR ASSESSMENT YEAR 1994-95 IN THE CASE OF THE APPELLANT BY CONFIRMING THE INTE REST INCOME 17 COMPUTED AT 6% BY THE DY. COMMISSIONER OF INCOME TA X, CIRCLE8(3), AHMEDABAD VIDE ORDER DATED 31-03-1999. 2.THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTEREST INCO ME OF THE APPELLANT AT 6% AS AGAINST 3% SHOWN IN THE RETURN O F INCOME MORE PARTICULARLY WHEN COGENT EVIDENCES EVEN FROM S EIZED MATERIALS WERE PLACED ON RECORDS AND THERE WERE NO ADVERSE MATERIAL TO JUSTIFY THE ADDITION MADE BY TAKING INT EREST INCOME AT 6%. THE LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) OUGHT TO HAVE APPRECIATED THE FACTS IN PROPER PERSP ECTIVE AND SHOULD NOT HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 3. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT ACCEPTING THE CONTENTION AND EVIDENCES PUT FORT H BY THE APPELLANT MORE PARTICULARLY WHEN IN THE CASE OF SHR I. BHARAT D. SHAH, ASSOCIATE OF THE APPELLANT, THE INTEREST INCO ME WAS ACCEPTED @ 3%. THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELL ANTS FACTS WERE IDENTICAL WITH THOSE OF SHRI. BHARAT D. SHAH A ND THEREFORE THERE WAS NO JUSTIFICATION IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. GROUNDS IN DEPARTMENTAL APPEAL. 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND FACTS IN DIRECTING TO ADOPT GROSS INTEREST RS. 62,16,327/- INSTEAD OF RS. 64,00,000/- TAKEN BY THE ASSESSING O FFICER. 2. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FURT HER ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWA NCE OF RS. 99,625/- BEING EXPENSES CLAIMED FROM INTEREST INCOM E. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FURTHER ERRED IN LAW ON FACTS IN DELETING THE ADDITION OF R S. 5,04,708/- BEING INTEREST INCOME OF BHARAT D. SHAH TO BE TAXED ON SUBSTANTIVE BASIS IN THE CASE OF THE ASSESSEE. 4. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALSO ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO ALLOW SHARE BUSINESS LOSS CLAIMED JUST BEFORE ONE DAY OF COMPLETION OF A SSESSMENT ORDER WITHOUT ANY SUPPORTING EVIDENCES. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 18 6. IT IS THEREFORE, PRAYED IN APPEAL THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO TH E ABOVE EXTENT. DEPARTMENTAL APPEAL: GROUND NO. 1 19. THE ISSUE IS SIMILAR TO GROUNDS IN DEPARTMENTAL APP EAL AND ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 1993-1994. WE HAVE HELD THEREIN THAT LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS JUS TIFIED IN ADOPTING GROSS INTEREST SHOWN BY THE ASSESSEE. DURING THE A SSESSMENT PROCEEDINGS, THE ASSESSING OFFICER PICKED UP THE FIGURE OF RS. 6 2,16,327/- AS SHOWN IN CHART-C BY LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) RATHER THAN FIGURE OF RS. 80,94,575/- IN CHART-A FROM WHERE THE FIGURE OF INTEREST 69,35,074/- HAS BEEN ADOPTED BY LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) IN THE ASSESSMENT YEAR 1993-94. THUS, IN THE ASSESSMENT YEAR 1994-95 THE FIGURES OF CHART-C HAS BEEN RELIED UPON AND THE ASSESSING OFFICER HAS ALSO TAKEN THE SAME FIGURE. IN THE A.YR. 1994-95 THE LD. A.O. HAS, AS AGAINST INTEREST OF RS. 62,16, 327/-. ESTIMATED INTEREST AT RS. 64,00,000/-. THEREAFTER HE WORKED OUT ASSESSEES INTEREST AT 1/3 RD (ASSESSEES SHARE AT 6% AS AGAINST GROSS INTEREST AT 18%) THEREOF AND THUS, INTEREST INCOME EARNED BY ASSESSEE WAS WO RKED OUT AT 21,33,333/-. OUT OF THIS THE ASSESSING OFFICER ALLO WED EXPENDITURE OF RS. 2,98,875/- AS AGAINST TOTAL CLAIM OF RS. 3,98,500/- . OUT OF TOTAL CLAIM OF EXPANSES, ASSESSING OFFICER DISALLOWED 1/4 TH FOR WANT OF EVIDENCE AND THUS ALLOWED ONLY 2,98,875/- DISALLOWING RS. 99,625 /- OUT OF RS. 3,98,500/- CLAIMED. 20. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DIRECTE D THE ASSESSING 19 OFFICER TO ADOPT THE EXACT FIGURE OF INTEREST AT RS . 62,16,327/- BUT HE ALLOWED THE CLAIM OF EXPENSES MADE BY THE ASSESSEE IN FULL. THUS ALLOWING THE RELIEF OF RS. 99,625/-. THE REASON GI VEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS THAT THE AS SESSING OFFICER HAS MADE DISALLOWANCE ON AD-HOC BASIS WITHOUT GIVIN G ANY REASON. BUT, HE CONFIRMED THE WORKING OF ASSESSEES INTEREST AT A RATE OF 6% (I.E.@ 1/3 RD OF THE TOTAL INTEREST RECEIPT). 21. WE HAVE HEARD LD. A.R. AND LD. D.R. FOR THE REA SONS, MENTIONED BY US IN THE ASSESSMENT YEAR 1993-94 WE UPHOLD THE ESTIMATION OF INCOME OF THE ASSESSEE AT 6% OF INTEREST AND ALSO A DOPTING THE FIGURE SUBMITTED BY THE ASSESSEE AT RS. 62,16,327/-. HOWE VER, WE OFFER NO COMMENTS ON WHY THE FIGURE OF INTEREST RECEIVED AT RS. 80,94,575/- HAS NOT BEEN ADOPTED BY THE AUTHORITIES BELOW AS THIS I SSUE IS NOT BEFORE US. 22. THIS DISPOSES OF GROUND NO. 1 AND 2 IN ASSESSEE S APPEAL AND GROUND NO. 1 AND 2 IN DEPARTMENTAL APPEAL. 23. IN DEPARTMENTAL APPEAL, GROUND NO. 3 RELATES TO DELETING ADDITION OF RS. 5,04,708/- BEING INTEREST INCOME OF BHARAT D. SHAH. THE ASSESSING OFFICER PICKED UP FROM CHART- B FIGURE OF INTEREST WHICH IS ACCEPTED AS RECEIVED BY THE CONCERNS OF SHRI. BHARA T D. SHAH AT RS. 18,61,598/-. BUT THE ASSESSING OFFICER ESTIMATED GROSS INTEREST AT RS. 19,00,000/- AS AGAINST THIS. INTEREST INCOME, PER TAINING TO SHRI. BHARAT D. SHAH, WAS WORKED OUT AT RS. 6,33,333/- BEING 1/3 RD OF TOTAL INTEREST OF RS. 18,61,598 OUT OF WHICH EXPENDITURE OF RS. 1,28,625/ - WAS ALLOWED AS AGAINST CLAIM OF RS. 1,71,500/- BY DISALLOWING 25% OF THE CLAIM ON THE GROUND OF NON VERIFICATION AND THUS ARRIVED AT RS. 5,04,708/- BEING INCOME OF SHRI BHARAT SHAH. HOWEVER THE LD. A.O. TR EATED THE INCOME OF 20 SHRI. BHARAT SHAH AS THAT OF ASSESSEE AND CLUBBED T HE SAME IN HIS HANDS. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DEL ETED THE ADDITION IN RESPECT OF THE INCOME OF SHRI. BHARATBHAI SHAH, FROM THE ASSESSMENT OF THE ASSESSEE, ON THE GROUND THAT IT HAS BEEN SUBSTA NTIALLY ASSESSED IN THE HANDS OF BHARAT D. SHAH. THE DEPARTMENT HAD CHALLE NGED THIS FINDING OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 24. WE HAVE HEARD THE LD. D.R. AND LD. A.R. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THE INCOME OF SHRI. BHARAT D. SHAH HAS BEEN SEPARATELY ASSESSED ON SUBSTANTIVE BASIS AND THERE FORE THE SAME CANNOT BE AGAIN ASSESSED ON SUBSTANTIVE IN THE CASE OF THE AS SESSEE. THE ISSUE OF CLUBBING OF INCOME OF SHRI. BHARAT D. SHAH, IN THE HANDS OF ASSESSEE, IN THE ASSESSMENT YEAR 1993-94 HAS NOT BEEN TAKEN UP A ND THEREFORE THERE WAS NO CASE FOR US TO TAKE A VIEW ON THIS ISSUE IN THE ASSESSMENT YEAR 1993-94. THIS YEAR THE ASSESSING OFFICER HAS SEPAR ATELY CLUBBED THE INCOME OF BHARAT SHAH IN THE HANDS OF THE ASSESSEE AND THEREFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CO NSIDERED IT AND HELD IT AGAINST CLUBBING. ACCORDINGLY, WE HOLD THA T NO CASE IS MADE OUT TO CLUB THE INCOME OF SHRI. BHARAT C. SHAH IN THE HAND S OF THE ASSESSEE, ONCE IT IS ASSESSED ON SUBSTANTIVE BASIS IN THE HAN DS OF SHRI. BHARAT C. SHAH. 25. IN REVENUES APPEAL, 4 TH GROUND IS REGARDING ALLOWING SHARE BUSINESS LOSS CLAIMED BY THE ASSESSEE ONE DAY BEFOR E COMPLETION OF ASSESSMENT WITHOUT ANY SUPPORTING EVIDENCE. THE AS SESSING OFFICER DISALLOWED THE CLAIM OF RS. 3,88,247/- ON THE GROUN D THAT IT WAS NOT CLAIMED IN THE RETURN OF INCOME AND WAS JUST MADE B EFORE THE ASSESSING OFFICER, ONE DAY BEFORE OF THE FINANCIAL YEAR WHEN THE ASSESSMENT WAS 21 GOING TO BE BARRED BY LIMITATION. FURTHER, THE COP IES OF THE PURCHASE BILLS, SALES BILLS AND DELIVERY MEMOS WERE NOT FILED BEFOR E THE ASSESSING OFFICER AND ACCORDINGLY BUSINESS LOSS WAS DISALLOWE D. BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), IT WAS CLAIME D THAT THE SHARE BUSINESS LOSS IS GENUINE AND THEREFORE IT CANNOT BE REJECTED OUT RIGHTLY. IT WAS ALSO CLAIMED THAT NECESSARY VOUCHERS WERE SUBMI TTED FOR VERIFICATION AND INSPECTOR HAD VERIFIED THE SAME. THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) THEREAFTER CALLED A REMAND REP ORT FROM THE ASSESSING OFFICER AND TO PROVIDE REASONABLE OPPORTU NITY TO THE ASSESSEE. HOWEVER, NO COMMUNICATION WAS RECEIVED FORM THE ASS ESSING OFFICER. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) REM INDED THE ASSESSING OFFICER VERBALLY BUT NO REPORT WAS SUBMIT TED BY THE ASSESSING OFFICER TILL THE TIME OF PASSING OF APPELLANT ORDER . THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THEREAFTER ALLO WED THE CLAIM AFTER NOTING THAT ASSESSING OFFICER HAS NOT SUBMITTED IN REPORT CALLED FOR BY HIM. 26. WE HAVE HEARD THE LD. D.R. AND LD. A.R. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). ONCE THE ASSESSEE HAS SUB MITTED NECESSARY VOUCHERS INCLUDING SALE BILLS AND PURCHASE BILLS, O PPORTUNITY WAS PROVIDED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TO T HE A.O. BEFORE DECIDING THE ISSUE. THE ASSESSING OFFICER SEEMS TO HAVE NOT AVAILED OF THIS OPPORTUNITY AND DID NOT CARE TO SUBMIT THE REP ORT TO LEARNED COMMISSIONER OF INCOME TAX(APPEALS). IN VIEW OF TH IS NO CONTRARY VIEW CAN BE HELD. ACCORDINGLY, THIS GROUND OF REVENUE I S DISMISSED. 22 27. IN ASSESSEES APPEAL 3 RD GROUND RELATES TO CLAIM OF ASSESSEE THAT IN THE CASE OF BHARAT D. SHAH, INTEREST INCOME AT 3% HAS B EEN ACCEPTED WHEREAS IN THE CASE OF THE ASSESSEE IT HAS BEEN ACCEPTED AT 6%. 28. WE HAVE HEARD THE LD. D.R. AND LD. A.R. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR TAKING CONTRARY VIEW FROM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). WE HAVE HELD IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1993-94 THAT ASSES SEES INCOME AT 6% OF INTEREST CHARGED BY HIM IS REASONABLE. THE SAME VI EW HAS TO BE HELD CONSISTENTLY NOW. UNDER WHAT CIRCUMSTANCES, INCOME IN THE CASE OF BHARAT D. SHAH HAS BEEN ASSESSED AT 3% IS NOT SPELT OUT. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS REJECTED. 29. AS A RESULT, APPEAL FILED BY THE REVENUE AS WEL L AS BY THE ASSESSEE IS DISMISSED. ITA NO. 2092 & 2657/AHD/2003(ASSESSMENT YEAR 1995-96) 30. IN THIS CASE REVENUE HAS RAISED FOLLOWING GROUN DS. 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTI NG TO ADOPT GROSS INTEREST OF RS. 62,16,327/- INSTEAD OF RS. 64,00,000/- TAKEN BY THE ASSESSING OFFICER. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE DISALLOWANCE OF RS. 99,625/- BEING EXPENSES CLAIMED FROM INTEREST INCOME. 3. THE LD. CIT(A) FURTHER ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 5,04,708/- BEING INTER EST INCOME OF BHARAT D. SHAH TO BE TAXED ON SUBSTANTIVE BASIS IN THE CASE OF THE ASSESSEE. 4. THE LD. CIT(A) ALSO ERRED IN LAW AND ON FACTS IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLO W SHARE BUSINESS LOSS CLAIMED JUST BEFORE ONE DAY OF COMPLE TION OF ASSESSMENT ORDER WITHOUT ANY SUPPORTING EVIDENCES. 23 5.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6.IT IS THEREFORE, PRAYED IN APPEAL THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. WHEREAS THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)- XVII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PA SSING THE APPELLATE ORDER DATED 12-03-2003 FOR ASSESSMENT YEAR 1995-96 IN THE CASE OF THE APPELLANT BY CONFIRMING THE INTEREST INCOME COMPUTED AT 6% BY THE DY. COMMISSIO NER OF INCOME TAX, CIRCLE 8(3), AHMEDABAD VIDE ORDER DATED 31- 03-1999. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTERES T INCOME OF THE APPELLANT AT 6% AS AGAINST 3% SHOWN IN THE R ETURN OF INCOME MORE PARTICULARLY WHEN COGENT EVIDENCES EVEN FROM SEIZED MATERIALS WERE PLACED ON RECORDS AND THERE W ERE NO ADVERSE MATERIAL TO JUSTIFY THE ADDITION MADE BY TA KING INTEREST INCOME AT 6%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THE F ACTS IN PROPER PERSPECTIVE AND SHOULD NOT HAVE CONFIRMED TH E ADDITION MADE BY THE ASSESSING OFFICER. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT ACCEPTING THE CONTENTION AND EVIDENCES PUT FORTH BY THE APPELLANT MORE PARTICULARLY WHEN IN THE CASE OF SHRI. BHARAT D. SHAH, ASSOCIATE OF THE APPELLANT, THE INT EREST INCOME WAS ACCEPTED @ 3%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANTS FACTS WERE IDENTICAL WITH THOSE OF SHRI . BHARAT D. SHAH AND THEREFORE THERE WAS NO JUSTIFICATION IN CO NFIRMING THE ACTION OF THE ASSESSING OFFICER. DEPARTMENTAL APPEAL GROUND NO.1 24 31. IN THIS CASE, ASSESSING OFFICER RELIED ON CHART -C REPRODUCED BY US. WHILE ADJUDICATING THE APPEAL FOR ASSESSMENT YEAR 1 993-94 WE HAVE REFERRED TO CHART CIT(A) WHICH SHOWS GROSS INTEREST RECEIVED BY THE ASSESSEE AT RS. 57,11,999/- IN THE A.YR. 1995-96 ( F. YR. 1994-95) WHEREAS CHART-A HAD SHOWN GROSS INTEREST AT RS. 89, 23,882/-. THE ASSESSING OFFICER HAS CONSIDERED THE INTEREST PORTI ON OF THE ASSESSEE AS PER CHART C BUT ESTIMATED THE SAME OF RS. 58,00,000 /- AND APPLIED A PERCENTAGE OF 6% FOR WORKING OUT ASSESSEES INTERES T THEREIN. INTEREST AMOUNTING TO RS. 32,10,883/- AS PER CHART-B WAS CON SIDERED IN THE HANDS OF SHRI. BHARATBHAI SHAH. THUS, AFTER COMPLYING TH E RATIO OF 6% THE ASSESSING OFFICER DETERMINED ASSESSEES SHARE AT RS . 19,33,333/-. THE ASSESSEE HAD CLAIMED EXPENSES OF RS. 3,81,000/- OUT OF HIS SHARE OF INCOME BUT THE ASSESSING OFFICER DISALLOWED 25% THE RE FROM AT RS. 95,250/- AND THUS ALLOWED EXPENSES OF RS. 2,85,750/ -. IN THIS WAY ASSESSING OFFICER CALCULATED INCOME OF ASSESSEE AT RS. 16,47,583/- (19,33,333 - 2,85,750). 32. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) , HOWEVER, DIRECTED THE ASSESSING OFFICER TO ADOPT FIGURE OF G ROSS INTEREST DECLARING BY THE ASSESSEE BEING RS. 57,11,991/-. HE CONFIRME D THAT 6% THEREOF WOULD BELONG TO THE ASSESSEE. THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS), HOWEVER, ALLOWED FURTHER EXPENSES OF RS. 95,250/- WHICH WERE DISALLOWED BY THE ASSESSING OFFICER AS ACCORDI NG TO HIM THERE IS NO BASIS FOR SUCH DISALLOWANCE. 33. AS WE HAVE HELD IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1993-94 AND 1994-95, THE ACTION OF THE LEARNED COMM ISSIONER OF INCOME TAX(APPEALS) IN ADOPTING THE FIGURE OF INTEREST AS DECLARED IN CHART IS UPHELD, THE QUANTITY OF THE INTEREST RATE AT 6% BEI NG THE ASSESSEES SHARE IS 25 ALSO UPHELD FOR THE REASONS DISCUSSED IN THE ASSES SMENT YEARS 1993-94 & 1994-95. THE DECISION OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN ALLOWING RELIEF TO THE ASSESSEE BY DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENSES IS ALSO UPHE LD FOR THE REASONS MENTIONED BY HIM.. THE CLAIM OF BUSINESS LOSS IS A LSO ALLOWED FOR THE REASONS GIVEN BY US IN THE ASSESSMENT YEAR 1994-95. AS A RESULT, WE UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND DISMISS THE APPEAL FILED BY THE REVENUE. 34. IN ASSESSEES APPEAL, ALL THE 3 GROUNDS ARE THE SAME AS IN THE ASSESSMENT YEAR 1994-95. FOR THE REASONS DISCUSSED BY US IN THE ASSESSMENT YEAR 1994-95 AND ALSO IN THE ASSESSMENT YEAR 1993-94 WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 35. AS A RESULT BOTH THE APPEALS FILED BY THE REVEN UE AND ASSESSEE ARE DISMISSED. ITA NO. 1140 AND 1101/AHD/2004 ASSESSMENT YEAR 1996-97 36. GROUNDS IN ASSESSEES APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XVI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PASSING THE APPELLATE ORDER DATED 13-01-2004 FOR ASSESSMENT YEAR 1996-97 IN THE CASE OF THE APPELLANT BY CONFIRMING THE INTEREST INCOME COM PUTED AT 6% BY THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 8(3), AHMEDABAD VIDE ORDER DATED31-03-1999. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTEREST INCO ME OF THE 26 APPELLANT AT 6% AS AGAINST 3% SHOWN IN THE RETURN O F INCOME MORE PARTICULARLY WHEN COGENT EVIDENCES EVEN FROM SEIZED MATERIALS WERE PLACED ON RECORDS AND THERE WERE NO ADVERSE M ATERIAL TO JUSTIFY THE ADDITION MADE BY TAKING INTEREST INCOME AT 6%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE APPRECIATED THE FACTS IN PROPER PERSPECTIVE AND SHO ULD NOT HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFIC ER. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT ACCEPTING THE CONTENTION AND EVIDENCES PUT FORT H BY THE APPELLANT MORE PARTICULARLY WHEN IN THE CASE OF SHR I. BHARAT D. SHAH, ASSOCIATE OF THE APPELLANT, THE INTEREST INCO ME WAS ACCEPTED @ 3%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANTS FACTS WERE IDENTICAL WITH THOSE OF SHRI. BHARAT D. SHAH AND THEREFORE THERE W AS NO JUSTIFICATION IN CONFIRMING THE ACTION OF THE ASSES SING OFFICER. 37. IN THE ASSESSMENT YEAR 1996-97, THE DEPARTMENT HAS RAISED THE ISSUES SIMILAR TO THE ISSUES RAISED BY THEM IN THE ASSESSMENT YEAR 1995- 96. THE REVENUE IS BASICALLY AGGRIEVED AGAINST LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOR THE FOLLOWI NG ISSUES: (I) IN ADOPTING GROSS INTEREST AT RS. 51,95,598/- A S AGAINST RS. 53,00,000/- ESTIMATED BY ASSESSING OFFICER. (II) DELETING DISALLOWANCE OF EXPENDITURE OF RS. 1, 22,750/- BEING 25% OF THE TOTAL CLAIM OF EXPENSES AT RS. 4,91,000/ -. (III) DELETING ADDITION OF RS. 1,95,000/- BEING THE INTEREST INCOME OF SHRI. BHARAT D, SHAH AND (IV) DIRECTING TO ALLOW SHARE BUSINESS LOSS OF RS. 2,16,150/-. 38. ALL THE ABOVE ISSUES RAISED BY THE ASSESSEE AS WELL AS BY THE REVENUE ARE SIMILAR TO THOSE RAISED BY THEM IN THE ASSESSMENT YEAR 1994- 95 AND ASSESSMENT YEAR 1995-1996. FOR THE REASONS D ISCUSSED BY US WHILE DISPOSING OF THE APPEAL FOR THOSE YEARS AND AFTER H EARING THE PARTIES, WE HOLD THAT THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF THE LEARNED 27 COMMISSIONER OF INCOME TAX(APPEALS). ACCORDINGLY, BOTH THE APPEALS, ONE FILED BY THE ASSESSEE AND OTHER FILED BY THE RE VENUE ARE DISMISSED. ITA NO. 1139/AHD/ AND ITA NO. 1100/AHD/ ASSESSMENT YEAR 1992-1993 39. GROUNDS IN ASSESSEES APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XVI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PASSING THE APPELLATE ORDER DATED 13-01-2004 FOR ASSESSMENT YEAR 1992-93 IN THE CASE OF THE APPELLANT BY CONFIRMING THE INTEREST INCOME COM PUTED AT 6% BY THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 10, A HMEDABAD VIDE ORDER DATED28-03-2002. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTEREST INCO ME OF THE APPELLANT AT 6% AS AGAINST 3% SHOWN IN THE RETURN O F INCOME MORE PARTICULARLY WHEN COGENT EVIDENCES EVEN FROM SEIZED MATERIALS WERE PLACED ON RECORDS AND THERE WERE NO ADVERSE M ATERIAL TO JUSTIFY THE ADDITION MADE BY TAKING INTEREST INCOME AT 6%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE APPRECIATED THE FACTS IN PROPER PERSPECTIVE AND SHO ULD NOT HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFIC ER. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT ACCEPTING THE CONTENTION AND EVIDENCES PUT FORT H BY THE APPELLANT MORE PARTICULARLY WHEN IN THE CASE OF SHR I. BHARAT D. SHAH, ASSOCIATE OF THE APPELLANT, THE INTEREST INCO ME WAS ACCEPTED @ 3%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANTS FACTS WERE IDENTICAL WITH THOSE OF SHRI. BHARAT D. SHAH AND THEREFORE THERE W AS NO JUSTIFICATION IN CONFIRMING THE ACTION OF THE ASSES SING OFFICER. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN NOT EXCLUDING INTEREST INCOME O F SHRI. BHARAT D. SHAH AND COMPUTING INTEREST INCOME @ 6% IN THE A PPELLANTS HANDS THAT PERTAINED TO SHRI BHART D SHAH. THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE E XCLUDED INCOME OF SHRI BHARAT D. SHAH AS DECIDED FOR A.Y. 1 995-96. 28 5.THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) O UGHT TO HAVE APPRECIATED THAT APPELLANT HAD INCLUDED THE RE LEVANT INTEREST INCOME IN THE RETURN OF INCOME FILED FOR A.Y. 1994- 95 AND 1995-96 AND THEREFORE NO FURTHER ADDITIONS WERE REQUIRED TO BE CONFIRMED. GROUNDS IN REVENUES APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), HA S ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFI CER TO ALLOW ACTUAL EXPENSES CLAIMED BY THE ASSESSEE AS AGAINST 25% ALLOWED BY ASSESSING OFFICER ON ESTIMATE BASIS AS THE ASSESSEE FAILED TO FURNISH ANY SUPPORTING EVIDENCE. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW TO SET OFF THE SHARE BUSINESS LOSS OF RS. 527 220/- CLAIMED BY THE ASSESSEE AT THE TIME OF FINALIZATION OF ASSESSM ENT PROCEEDINGS AND NOT IN THE INCOME TAX RETURN FILED. 3.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4.IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) MAY BE SET ASID E AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTE NT. 40 . THE BASIC FACTS OF THE CASE HAVE BEEN DISCUSSE D BY US IN THE ASSESSMENT YEAR 1993-1994 TO A. YR. 1996-96. THE I SSUES AND THE FACTS RELATING TO THESE ISSUES RAISED BY THE PARTIES ARE THE SAME AS IN THOSE YEARS. FOLLOWING OUR DECISION IN ASSESSMENT YEAR 1993-1994 TO 1996-1997, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) AND DISMISSED THE APPEALS FILED BY BOTH THE PARTIES . ITA 1138/AHD/2004 ASSESSMENT YEAR 1991-1992 41. THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FOLLOWING GROUNDS: 29 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XVI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PASSING THE APPELLATE ORDER DATED 13-01-2004 FOR ASSESSMENT YEAR 1991-92 IN THE CASE OF THE APPELLANT BY CONFIRMING THE INTEREST INCOME COM PUTED AT 6% BY THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 10, A HMEDABAD VIDE ORDER DATED28-03-2002. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTEREST INCO ME OF THE APPELLANT AT 6% AS AGAINST 3% SHOWN IN THE RETURN O F INCOME MORE PARTICULARLY WHEN COGENT EVIDENCES EVEN FROM SEIZED MATERIALS WERE PLACED ON RECORDS AND THERE WERE NO ADVERSE M ATERIAL TO JUSTIFY THE ADDITION MADE BY TAKING INTEREST INCOME AT 6%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE APPRECIATED THE FACTS IN PROPER PERSPECTIVE AND SHO ULD NOT HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFIC ER. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT ACCEPTING THE CONTENTION AND EVIDENCES PUT FORT H BY THE APPELLANT MORE PARTICULARLY WHEN IN THE CASE OF SHR I. BHARAT D. SHAH, ASSOCIATE OF THE APPELLANT, THE INTEREST INCO ME WAS ACCEPTED @ 3% IN SUBSEQUENT YEARS. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APP ELLANTS FACTS WERE IDENTICAL WITH THOSE OF SHRI. BHARAT D. SHAH A ND THEREFORE THERE WAS NO JUSTIFICATION IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN NOT EXCLUDING INTEREST INCOME O F SHRI. BHARAT D. SHAH AND COMPUTING INTEREST INCOME @ 6% IN THE A PPELLANTS HANDS THAT PERTAINED TO SHRI BHART D SHAH. THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE E XCLUDED INCOME OF SHRI BHARAT D. SHAH AS DECIDED FOR A.Y. 1 995-96. 5.THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) O UGHT TO HAVE APPRECIATED THAT APPELLANT HAD INCLUDED THE RE LEVANT INTEREST INCOME IN THE RETURN OF INCOME FILED FOR A.Y. 1994- 95 AND 1995-96 AND THEREFORE NO FURTHER ADDITIONS WERE REQUIRED TO BE CONFIRMED. 42. BASIC FACTS ARE DISCUSSED BY US IN THE ASSESSME NT YEAR 1993-1994 TO 1996-1997. THE FACTS ARE SIMILAR AND ISSUE RAISED BY THE ASSESSEE ARE ALSO SIMILAR AS RAISED BY IT IN THESE YEARS. 30 43. FOLLOWING OUR DECISION IN THOSE ASSESSMENTS YEA RS, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) IN THE ASSESSMENT YEAR 1991-1992 AS WELL. 44. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. DEPARTMENTAL APPEAL NO. 1879/AHD./2003 GROUNDS RAISED ARE: 1.) LD. C.I.T.(A) ERRED ON LAW AND FACTS I) IN DIRECTING THAT THE GROSS INTEREST R ECEIVED AT RS. 18,61, 598/- SHOULD BE CONSIDERED AS AGAINST RS. 19,00,000/- TAK EN BY THE ASSESSING OFFICER. II) IN HOLDING THAT NET INTEREST INCOME A T 3% PER ANNUM AS AGAINST 6% CONSIDERED BY THE A.O. III) IN DIRECTING TO DELETE THE DISALLOW ANCE OF EXPANSES @ 25% IV) IN DIRECTING THE A.O. THAT THE RETUR NED INCOME OF THE APPELLANT AT RS. 4,67,000/ SHOULD NOT BE DISTURBED INSTEAD OF INCOME WORKED OUT AT RS. 5,04,708/- BY THE A.O. V) IN DELETING THE ADDITION OF RS. 19.99,960 /- MADE ON ACCOUNT OF INCOME GENERATED FROM BOGUS BILLS. VI) IN DELETING THE ADDITION OF RS. 1,96, 890/- MADE ON ACCOUNT OF CASH TRANSACTION CONTAINED IN THE POCKET LEDGER. VII) IN DELETING THE ADDITION OF RS. 3,00,0 00/- MADE ON ACCOUNT OF SHARE TRADING BUSINESS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) AUGHT TO HAVE UPHELD THE ABOVE ADDITIONS/ DISALLOWANCES MADE BY THE A.O. 3. IT IS THEREFORE PRAYED IN APPEAL THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTEN T. GROUND NO.1. 45. WE HAVE HEARD LD.D.R. AND LD. A.R. LD. D.R. HAS BASICALLY RELIED ON THE ORDER OF THE A.O. AS HELD IN THE CASE OF JAS WANTLAL M SHAH IN THE A.YRS. 1994-95 TO 1996-97 WE UPHOLD THE DECISION OF LD. CIT(A) IN DIRECTING THE A.O. TO ADOPT THE FIGURE OF INTEREST AS PER CHART ANNEXED BY LD. CIT(A) IN THE CASE OF JASWANTLAL M SHAH IN THE A.YRS. 1993-94. 31 ACCORDINGLY ADOPTING THE FIGURE OF GROSS INTEREST AT RS. 18,61,598/- IS IN ORDER. THIS GROUND IS THEREFORE REJECTED. GROUND NO. 2. 46. WE HAVE HEARD LD. D.R. AND LD. A.R. LD. D.R. HA S BASICALLY RELIED ON THE ORDER OF LD. CIT(A) IN THE CASE OF JASWANTLA L M SHAH IN THE A.YRS. 1993-94. WHERE CHARGING OF INTEREST AT 6% HAS BEEN DIRECTED, WHICH HAS BEEN UPHELD BY US IN THAT CASE, AS ABOVE. HOWEVER W E NOTICE THAT UPHOLD OF THE CHARGING OF INTEREST AT 6% IN THE CASE OF J ASWANTLAL M SHAH IN THE A.YRS. 1993-94. WAS BASED ON THE STATEMENT OF SHRI JASWANTLAL M SHAH WHEREAS IN THE CASE OF PRESENT ASSESSEE CHARGING OF INTEREST AT 3% HAS BEEN DIRECTED ON THE BASIS OF DOCUMENTS SEIZED IN T HE SEARCH. THERE IS A DIFFERENCE IN TWO CASES THEREFORE THE CASE OF JASWA NTLAL M SHAH CANNOT BE FOLLOWED FOR CHARGING OF INTEREST. AS A RESULT WE C ONFIRM THE ORDER OF LD. CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. GROUND NO.3. 47. THIS RELATES TO DISALLOWANCES OF EXPANSES @ 25 %. ON THIS GROUND WE HAVE HEARD LD. D.R. AND LD. A.R. IN THE CASE OF JAS WANTLAL M SHAH IN THE A.YRS. 1994-95 TO 1996-97 WE HAVE HELD THAT THERE I S NO JUSTIFICATION IN MAKING DISALLOWANCES. FOLLOWING THE REASONING GIVEN IN THAT CASE WE UPHOLD THE ORDER OF LD. CIT(A) AND DISMISS THIS GRO UND OF THE REVENUE. . GROUND NO.4. 48. WE HAVE HEARD LD. D.R. AND LD. A.R. LD. D.R. HAS BASICALLY RELIED ON THE ORDER OF THE A.O. THE LD. CIT(A) HAS NOTED THAT THE ASSESSEE HAS SHOWN INCOME FROM HAWALA AT RS. 1,38, 767/- AFTER T AKING 3% OF INTEREST (BEING 1/6 TH OF GROSS INTEREST RECEIVED AT RS. 18,61,598/-) LES S EXPANSES AT RS. 1,71,500/-. AND SOME ADDITIONAL INCOME, THUS INCOME WAS RETURNED AT RS. 4,67,000/-. SINCE WE HAVE UPHELD THE ADOPTIN G OF INTEREST AT 3% AND FIGURE OF EXPANSES AS SHOWN BY THE ASSESSEE WE UPHO LD THE DIRECTIONS OF 32 LD. CIT(A) FOR ACCEPTING THE RETURNED INCOME. THIS GROUND OF THE REVENUE IS REJECTED. GROUND NO. 5 49. THE A.O. ADDED IN THE TOTAL INCOME A SUM OF RA. 19,99,960 ON ACCOUNT OF BOGUS BILLS. THE A.O. HAS GIVEN THE DET AILS OF BOGUS BILLS ON PAGES 9 & 10 OF HIS ORDER. THESE AMOUNTS WERE FOUND CREDITED IN THE ACCOUNTS OF PROPRIETARY CONCERNS OF THE ASSESSEE. W HILE DISCUSSING THIS ISSUE LD. CIT(A) OBSERVED AS UNDER: BEFORE ME THE LEARNED A.R. OF THE APPELLANT SUBMITT ED THAT THESE BOGUS BILLS WERE SHOWN TO GENERATE LOAN ENTRIES AND IT IS ALSO ACCEPTED BY THE ASSESSING OFFICER THAT CASH SALES W ERE ON TO GENERATE LOAN ENTRIES AND FOR MAKING SALES, BOGUS P URCHASE BILLS WERE INTRODUCED. THE LEARNED A.R. OF THE APPELLANT FURTHER SUBMITTED THAT WHEN PURCHASES ARE BOGUS, SALES CANN OT BE GENUINE AND THEREFORE, NO TRANSACTION CAN BE SAID TO HAVE T AKEN PLACE. THE DISCLOSURE MADE OF RS.30,00,000/- DURING THE SEARCH WAS UNDER PRESSURE, COERCION AND NOT BASED ON FACTS AND CORRO BORATIVE EVIDENCES AND THEREFORE THE SAME CAN NOT BE RELIED IN ANY EVENT IT ALSO SUBMITTED THAT DURING THE SEARCH PROCEEDINGS R ESIDENTIAL PREMISES OF THE APPELLANT WAS ALSO SEARCHED AND EX CEPT SHARE CERTIFICATES, WHICH HAS ALREADY BEEN DISCLOSED AND OFFERED FOR TAX, NO CASH, JEWELLERY, INVESTMENTS OR INCRIMINATING DO CUMENTS WERE FOUND AND THEREFORE, ON THIS SCORE ALSO IT CANNOT B E PRESUMED THAT APPELLANT HAD EARNED SO MUCH INCOME. IT ALSO SUBMI TTED THAT DISCLOSURE WAS WITHOUT APPRECIATION OF FACTS AND EV IDENCES. AS REGARDS CASH TRANSACTION IN THE POCKET LEDGERS, IT IS SUBMITTED THAT APPELLANT WAS MANAGING PETTY FUND OF FRIENDS A ND RELATIVES. THE COMPLETE DETAIL TO THIS FACT WAS ALSO CLEAR FRO M THE LOOSE PAPERS. IT ALSO CONTENDED THAT THE ASSESSING OFFIC ER WAS NOT JUSTIFIED IN MAKING TOTALS OF DEBITS AND CREDITS FO R THE PURPOSE OF ADDITIONS. IT IS ALSO SUBMITTED THAT AMOUNT RECEIV ED FROM FRIENDS AND RELATIVES WERE EITHER INVESTED IN SHARE OR GIVE N ON THEIR BEHALF TO ANOTHER RELATIVES / PERSONS. THE LEARNED A.R. F URTHER CONTENDED THAT EVEN THE SHARE CERTIFICATES, WHICH BELONGED TO THE FRIENDS AND RELATIVES WERE OFFERED FOR TAXATION TO BUY PEACE AN D AVOID PROTECTED LITIGATION. ON THIS SCORE ALSO NO ADDITI ON IS CALLED FOR. 33 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE LD. A.R. OF THE APPELLANT. AS THE APPELLANT WAS ENGAGED IN HAWALA BUSINESS, THE INCOME WHEREOF HAS BEEN OFFERED FOR TAX AND THE BOGUS BILLS HAVING BEEN SHO WN FOR GENERATING LOAN ENTRIES, NO FURTHER ADDITION FOR BO GUS BILLS ARE SUSTAINABLE. IN THE BALANCE SHEET OF PROPRIETARY CONCERNS IN WHICH THESE BOGUS BILLS WERE SHOWN, LOAN ENTRIES WE RE GIVEN AND THE SAME HAS NOT BEEN DISPUTED BY THE ASSESSING OFF ICER. IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT APPELLAN T HAD ACTUALLY PURCHASED GOODS AND SOLD THE SAME AND PURCHASE AMOU NT WERE INFLATED TO THAT EXTENT. THE ASSESSING OFFICER HAS ALSO NARRATED MODUS OPERANDI OF THE BUSINESS WHICH ALSO MAKE IT C LEAR THAT BOGUS BILLS WERE NOTHING BUT AMOUNT SHOWN FOR GENERATING MORE LOAN ENTRIES. I, THEREFORE, AGREE WITH THE APPELLANT AN D HOLD THAT NO SEPARATE ADDITION FOR BOGUS BILLS COULD BE MADE MOR E PARTICULARLY WHEN THESE WERE SHOWN FOR HAWALA ENTRIES, THE INCO ME WHERE FROM HAS ALREADY BEEN OFFERED AND NO CORROBORATIVE ASSET S WERE FOUND DURING THE COURSE OF SEARCH PROCEEDINGS, I, THEREFO RE, DELETE THE ADDITION MADE OF RS.19,99,960/- ON THIS ACCOUNT. 50. WE HAVE HEARD LD. D.R. AND LD. A.R. NO CONTRAR Y MATERIAL HAS BEEN SHOWN TO US SO AS TO TAKE A DIFFERENT VIEW. ACCORDI NGLY FOR THE ABOVE REASONS MENTIONED BY LD. CIT(A) WE CONFIRM HIS ORDE R AND REJECT THIS GROUND OF REVENUE. GROUND NO. 6. 51. THIS RELATES TO ADDITION OF RS. 1,96, 890/- MAD E ON ACCOUNT OF CASH TRANSACTIONS CONTAINED IN THE POCKET LEDGER. IN THI S REGARD LD. CIT(A) OBSERVED AS UNDER: REGARDING CASH TRANSACTION IN POCKET LEDGER, I FIND THAT APPELLANT HAD FILED RETURN OF INCOME WHEREIN SHARES FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS HAVE BEEN OFFERED FOR TAX BESIDES OTHER INCOME. CONSIDERING THE FACTS THAT INVESTMEN TS WERE MADE ON BEHALF OF FRIENDS AND RELATIVES AND NO NETTING O F WAS DONE BY THE ASSESSING OFFICER IN RESPECT OF PETTY CASH TRANSACT ION OF THE POCKET LEDGER AND THE INCOME OFFERED BY THE APPELLANT IS A T RS.4,67,000/- AS AGAINST WORKING OF RS.1,38,767/-, I HOLD THAT TH E INCOME OFFERED WOULD COVER EVEN THE CASH TRANSACTION AND ACCORDING LY THE ADDITION MADE AT RS.1,96,890/- IS DIRECTED TO BE DE LETED. 34 52. WE HAVE HEARD LD. D.R. AND LD. A.R. NO CONTRA RY MATERIAL HAS BEEN SHOWN TO US SO AS TO TAKE A DIFFERENT VIEW. ACCORDI NGLY FOR THE ABOVE REASONS MENTIONED BY LD. CIT(A) WE CONFIRM HIS ORDE R AND REJECT THIS GROUND OF REVENUE. GROUND NO.7. 53. THIS RELATES TO DELETING THE ADDITION OF RS.3,0 0,000/- MADE ON ACCOUNT OF SHARE TRADING BUSINESS. IN THIS REGARD L D. CIT(A) OBSERVED AS UNDER: THE NEXT GROUND OF APPEAL IS REGARDING ADDITION OF RS.3,00,000/- MADE BY THE ASSESSING OFFICER ESTIMATING INCOME FRO M SHARES BUSINESS. THE ASSESSING OFFICER UNDER PARA 10 OF T HE ASSESSMENT ORDER HAS STATED THAT APPELLANT WAS DOING SHARE TRA DING FOR WHICH NO DETAILS HAS BEEN FURNISHED AND THEREFORE THE ASS ESSING OFFICER ESTIMATED RS.3,00,000/- AS INCOME FROM SHARE TRADI NG. BEFORE ME THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT SUBMITTED THAT THE ADDITION HAS BEEN MADE PURELY ON ESTIMATE AND WITHOUT BRINGING ANY ADVERSE FINDING. IT IS ALSO C ONTENDED THAT SHARES FOUND AND SEIZED DURING THE COURSE OF SEARCH HAVE ALREADY BEEN OFFERED FOR TAX AND NO OTHER INVESTMENT OR INC RIMINATING DOCUMENTS WERE FOUND WHICH CAN SHOW & APPROVE THAT APPELLANT HAD EARNED INCOME OF RS.3,00,000/- FROM SHARE TRADI NG TRANSACTION AND THEREFORE THE ADDITION BEING ARBITRARY AND GUES S WORK MAY PLEASE BE DELETED. I HAVE CONSIDERED THE FACTS OF THE CASE AS WELL AS ASSESSMENT ORDER AND SUBMISSIONS GIVEN BY THE APPELLANT. THE ASSESS ING OFFICER HAS NOT GIVEN ANY DETAILS OF INCOME FROM SHARE TRADING WHICH IN HIS OPINION WERE NOT CONSIDERED BY THE APPELLANT IN HIS RETURN OF INCOME. THE ASSESSING OFFICER HAS HIMSELF STATED T HAT ADDITION IS MADE ON ESTIMATES. ON THE OTHER HAND, LD. AUTHORIS ED REPRESENTATIVE OF THE APPELLANT HAS SUBMITTED THAT SHARES ETC HAVE ALREADY BEEN DISCLOSED AND OFFERED FOR TAX AND NO D OCUMENTS OR LOSE PAPERS WERE FOUND DURING SEARCH TO SUPPORT THE ADDITION OF THE ASSESSING OFFICER. MOREOVER, EVEN IF THERE WAS ANY TRADING TRANSACTION, THE RELEVANT PROFIT / RECEIPT WOULD ME RGE IN THE NEW SHARES PURCHASED AND WERE LYING AT THE TIME OF SEAR CH. AS THE ENTIRE SHARES FOUND HAVE ALREADY BEEN DISCLOSED AND OFFERED FOR TAX 35 AND IN ABSENCE OF ANY ADVERSE MATERIALS ON RECORDS, THE ADDITION OF RS.3,00,000/- BY ESTIMATING INCOME FROM SHARES TRAD ING IS DIRECTED TO BE DELETED. 54. WE HAVE HEARD LD. D.R. AND LD. A.R. NO CONTRA RY MATERIAL HAS BEEN SHOWN TO US SO AS TO TAKE A DIFFERENT VIEW. ACCORDI NGLY FOR THE ABOVE REASONS MENTIONED BY LD. CIT(A) WE CONFIRM HIS ORDE R AND REJECT THIS GROUND OF REVENUE. 55. AS A RESULT APPEAL FILED BY THE REVENUE IS DIS MISSED. 56. AS A RESULT ALL THE APPEALS FILED BY THE ASSES SEE AS WELL REVENUE ARE DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 31 ST AUGUST, 2009. SD/- SD/- (H L KARWA) (D.C . AGRAWAL) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED: 31/08/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.