Mr. VIRENDRA KUMAR AGARWAL, Agra V. DCIT.INV.CIRCLE 2(1), Agra

ITA 147/AGR/2000

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2532 (ITAT-AGRA)
• Duration Of Justice: 10 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-12-2010
• Assessment Year: 1993-1994
• Appeal Filed On: 04-04-2000
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P K SEHGAL
• Keywords: Unexplained investment; Business income; Depreciation; Business expenditure; Search and seizure; Document seized; Principle of natural justice; Opportunity of cross examination; Assessment record; Documents seized; Set aside
• Section: 143(3); 142(1); 234B; 131; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 147 & 148/AGR./2000 ASSTT. YEAR : 1993-94 & 1994-95 MR. VIRENDRA KUMAR AGARWAL, VS. D.C.I.T. (INV.) C IRCLE 2(1), 12/14, JOGIPARA, SHAHGANJ, AGRA. AGRA. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI P.K. SEHGAL, ADVOCATE FOR RESPONDENT : SHRI VINOD KUMAR, JR. D.R. ORDER PER H.S. SIDHU, J.M. : THE ASSESSEE HAS FILED THESE APPEALS AGAINST SEPAR ATE ORDERS DATED 20.01.2000 OF LEARNED CIT(A)-II, AGRA. THE ISSUES I NVOLVED IN BOTH THESE APPEALS ARE ALMOST IDENTICAL EXCEPT ONE ADDITION OF RS.19,0 83/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE GOLD OR ORNAMENTS AGITATED IN GRO UND NO. 1 TO 3 IN ITA NO. 148/AGRA/2000 FOR A.Y. 1994-95. FOR THE SAKE OF CON VENIENCE, WE ARE DISPOSING OF THESE TWO APPEALS BY PASSING THIS CONSOLIDATED ORDE R. 2. THE FACTS RELATING TO THE ISSUES IN DISPUTE ARE THAT SEARCH AND SEIZURE OPERATION U/S.132(1) OF THE INCOME-TAX ACT, 1961(HE REINAFTER CALLED THE ACT) WERE CARRIED OUT ON 26.05.1993 IN THE RESIDENTIAL AND BU SINESS PREMISES OF THE ASSESSEE 2 AND HIS FAMILY MEMBERS AS ALSO AT ALLIED CONCERNS. DURING THE COURSE OF SEARCH UNACCOUNTED CASH, GOLD & SILVER ORNAMENTS AND INCRI MINATING DOCUMENTS WERE FOUND AND SEIZED. 3. THE ASSESSEE FILED RETURNS DECLARING INCOME OF R S.49,930/- AND RS.42,650/- ON 31.03.1995 AND 12.02.1996 RESPECTIVELY FOR A.YRS . 1993-94 AND 1994-95. THE ASSESSMENTS WERE ORIGINALLY COMPLETED U/S. 143(3) O N THE INCOME OF RS.22,47,900/- AND RS.9,19,250/- RESPECTIVELY FOR TWO YEARS ON 22. 03.1996. THE ASSESSEE FILED APPEALS AGAINST THESE ASSESSMENTS BEFORE THE LEARNE D FIRST APPELLATE AUTHORITY AND THE CIT(A)-II, AGRA SET ASIDE THE ASSESSMENTS WITH THE DIRECTION TO THE ASSESSING OFFICER TO SUPPLY NECESSARY DOCUMENTS. THE ASSESSIN G OFFICER AGAIN ISSUED NOTICE U/S. 142(1) OF THE ACT TO THE ASSESSEE. IN RESPONSE TO THE SAME, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED H IS WRITTEN REPLY AND EXPLAINED THE SOURCE AND POSSESSIONS OF THE ASSETS FOUND DURI NG THE SEARCH. AFTER DISCUSSING THE MATTER WITH THE ASSESSEE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 143/251 FOR THE BOTH ASSESSMENT YEARS ON 30.03.1999 AND COMPUTED THE INCOME FOR BOTH THE ASSESSMENT YEARS AS UNDER : A.Y. 93-94 A.Y. 94-95 1) INCOME FROM HOUSE PROPERTY AS SHOWN 7352 9 448 2) BUSINESS INCOME LESS INCOME FROM CONSIDERED SEPARATELY 6174 18687 3). INCOME FROM OTHER SOURCES 9316 7912 3 4). UNEXPLAINED CASH ON PROTECTIVE BASIS DISCUSSED ABOVE. - 8524 5). UNEXPLAINED JEWELLERY (A) SILVER ORNAMENTS - 78043 (B) GOLD ORNAMENTS - 19033 6). UNEXPLAINED INVESTMENT IN NSCS AND FDRS 50 0 5000 7). EXTRA PROFIT DISCUSSED ABOVE 103000 104823 8). EXPENSES DISALLOWED 7200 - 9). INCOME FROM BUS ESTIMATED 150000 100000 283544 351470 LESS DEDUCTION U/S. 80L 4470 44 29 4. AGGRIEVED BY THE ASSESSMENT ORDERS DATED 30.03.1 999 PASSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS IN DISPU TE, THE ASSESSEE FILED APPEALS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY, WHO V IDE SEPARATE ORDERS DATED 20.01.2000, PARTLY ALLOWED THE APPEALS OF ASSESSEE. AGGRIEVED BY THE IMPUGNED ORDERS, THE ASSESSEE FILED THESE TWO APPEALS. 5. AS REGARDS THE ADDITION OF RS.50,000/- ON ACCOUN T OF EXTRA PROFIT SUSTAINED BY THE LEARNED FIRST APPELLATE AUTHORITY, THE LD. C OUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE IS AN INDIVIDUAL AND CARRYING ON THE B USINESS OF PLYING OF MINI BUSES THROUGH TRAVEL OPERATORS AND SUBSEQUENTLY, SINCE 19 90, IN ADDITION TO SAID BUSINESS, HE STARTED THE SARAFA BUSINESS. A SEARCH AND SEIZUR E OPERATION WAS CONDUCTED ON 26.05.1993 AT THE RESIDENTIAL AS WELL AS BUSINESS P REMISES RELATING TO SHRI HARISH CHAND AGARWAL, THE ASSESSEES FATHER AND OTHER FAMI LY MEMBERS. HE FURTHER STATED THAT THE ORIGINAL ASSESSMENTS WERE COMPLETED U/S. 1 43(3) OF THE ACT FOR BOTH THE 4 ASSESSMENT YEARS ON 22.03.1996 WHICH WERE SET ASIDE BY THE LEARNED CIT(A) WITH THE DIRECTION TO THE ASSESSING OFFICER TO ALLOW INS PECTION OF THE SEIZED DOCUMENTS AND GIVING AN OPPORTUNITY TO THE ASSESSEE AND COMPL ETE THE ASSESSMENTS ACCORDINGLY. IN COMPLIANCE OF THE SAME, THE ASSESSI NG OFFICER COMPLETED THE ASSESSMENT IN AN ARBITRARY MANNER WITHOUT CONSIDERI NG THE EVIDENCE PRODUCED BY THE ASSESSEE AND MADE VARIOUS ADDITIONS/DISALLOWANC ES IN THE CASES OF ASSESSEE FOR THE ASSESSMENT YEARS IN DISPUTE. HE FURTHER STATED THAT MOST OF THE ADDITIONS HAVE BEEN MADE ON MERELY GUESS WORK, WHICH DESERVES TO B E CANCELLED. 6. AS REGARDS ADDITION OF RS.50,000/- SUSTAINED BY THE LEARNED FIRST APPELLATE AUTHORITY ON ACCOUNT OF ALLEGED EXTRA PROFIT, LD. C OUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE HAS DISCLOSED THE POSITION RELATING TO SARAFA BUSINESS BY SHOWING THE SALES OF SILVER ORNAMENTS, GROSS PROFIT, GROSS PROF IT RATE, NET PROFIT, NET PROFIT RATE AND CLOSING STOCK WHICH IS FULLY EXPLAINED AND VERI FIABLE WITH REFERENCE TO THE COMPLETE BOOKS OF ACCOUNT WHICH WERE SEIZED AND ARE ALSO IN THE POSSESSION OF THE DEPARTMENT, BUT THE ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE WITHOUT GOING THROUGH THE EVIDENCE FILED BY THE ASSESSEE AN D LEARNED FIRST APPELLATE AUTHORITY HAS WRONGLY SUSTAINED RS.50,000/- ON ACCO UNT OF EXTRA PROFIT MERELY ON GUESS WORK IGNORING REGULAR BOOKS OF ACCOUNT SUPPOR TED BY DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE AUTHORITIES BEL OW. HE FURTHER STATED THAT IT IS 5 WELL SETTLED THAT THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE TO THE ASSESSMENT UNDER THE INCOME TAX ACT, AS THE ASSESSMENT YEAR IN THE INCOME-TAX IS A SELF CONTAINED ASSESSMENT PERIOD AND A DECISION IN ONE A SSESSMENT YEAR DOES NOT OPERATE AS RES JUDICATA IN RESPECT OF ANOTHER YEAR. THUS, EVEN IF ALLEGED UNACCOUNTED STOCK OF SILVER AND GOLD ORNAMENTS WERE NOTICED AT THE TIME OF SEARCH ON 26 TH MAY, 1993, I.E., RELEVANT TO A.Y. 1994-95, IN THE ABSENCE OF ANY ADVERSE MATERIAL, RELEVANT TO A.Y. 1993-94 IT CANNOT BE ASS UMED THAT THE ASSESSEE WAS ALSO CARRYING ON UNACCOUNTED BUSINESS OF PURCHASE AND SA LE OF SILVER AND GOLD ORNAMENTS DURING THE ASSESSMENT YEAR 1993-94, WHICH ENDED ON 31 ST MARCH, 1993, I.E., MUCH PRIOR TO THE DATE OF SEARCH. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO STATED THAT THE ASSESSEE HAD MAINTAINED CORRECT AND COMPLETE ACCOUNTS AND HAD CONSISTENTLY FOLLOWED THE METHOD OF ACCOUNTING REGU LARLY EMPLOYED. THEREFORE, THE PROVISIONS OF SUB-SECTION (2) OF SECTION 145 HAVE W RONGLY BEEN APPLIED IN THE CASE OF THE ASSESSEE. THEREFORE, THE ADDITION IN DISPUTE DESERVES TO BE CANCELLED FOR THE ASSESSMENT YEARS IN DISPUTE. 7. ON THE CONTRARY, THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE REVENUE AUTHORITIES. 6 8. WE HAVE HEARD THE BOTH PARTIES ON THE ADDITION O F RS.50,000/- ON ACCOUNT OF EXTRA PROFIT SUSTAINED BY THE LEARNED FIRST APPELLA TE AUTHORITY. WE HAVE ALSO PERUSED THE RELEVANT RECORD AVAILABLE WITH US, ESPECIALLY T HE ASSESSMENT ORDERS AND THE IMPUGNED ORDERS. ACCORDING TO ASSESSMENT ORDERS PAG E 4 PARA 8, THE ASSESSEE IS DERIVING INCOME FROM SARAFA BUSINESS AND PLYING OF MINI BUSES. IN THE TRADING ACCOUNT FILED BY THE ASSESSEE FOR THE ASSESSMENT YE AR 1993-94 ON SALES OF RS.45,549/-, A GROSS PROFIT OF RS.13,393/- HAS BEEN SHOWN GIVING A RATE OF 29%. SIMILARLY IN THE ASSESSMENT YEAR 1994-95, ON SALES OF RS.39,995/-, THE GROSS PROFIT OF RS.11,577/- HAS BEEN DECLARED GIVING RATE OF 29% . THE ASSESSING OFFICER ALSO OBSERVED THAT THE BOOKS OF ACCOUNT MAINTAINED, HOWE VER, DO NOT DEPICT THE TRUE STATE OF AFFAIRS AND ARE NOT WRITTEN IN THE REGULAR COURSE OF BUSINESS. THE TRANSACTIONS ARE NOT FULLY RECORDED IN THE BOOKS, A S IS EVIDENT FROM THE UNDISCLOSED STOCK FOUND FROM THE ASSESSEES POSSESSION. THE TRA DING IN GOLD IS ALTOGETHER CONCEALED FROM THE DEPARTMENT. THEREFORE, THE BOOK RESULTS ARE REJECTED AND PROVISIONS OF SECTION 145(2) ARE COMPLIED. THE ASSE SSING OFFICER ESTIMATED FOUR TIMES OF STOCK FOUND I.E., RS.3,88,000/- (97000 X 4 BY APPLYING GROSS PROFIT OF 30% FOR THE ASSESSMENT YEAR 1993-94). THIS WILL GIVE GR OSS PROFIT OF RS.1,16,000/-. AFTER DEDUCTING GROSS PROFIT SHOWN, THE NET ADDITIO N HAS BEEN WORKED OUT TO RS.1,03,000/- (1,16,400 13393) FOR ASSESSMENT YEA R 1993-94 AND RS.1,04,823/- (1,16,000 -11177) FOR THE ASSESSMENT YEAR 1994-95 A ND ADDED THE SAME TO THE 7 INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEARS IN DISPUTE. BUT THE LEARNED FIRST APPELLATE AUTHORITY RESTRICTED IT TO RS.50,000/- FO R BOTH THE ASSESSMENT YEARS IN DISPUTE AND DELETED THE REMAINING ADDITION AMOUNTIN G TO RS.53000/- AND RS.54,823/- FOR THE ASSESSMENT YEARS 1993-94 AND RS .1994-95 RESPECTIVELY. AFTER PERUSING THE ASSESSMENT RECORD OF THE ASSESSMENT YE ARS IN DISPUTE AS WELL AS THE IMPUGNED ORDER WE ARE OF THE CONSIDERED OPINION THA T THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF ALLEGED EXTRA PROFI T MERELY ON ESTIMATION BASIS AND ONLY ON GUESS WORK. HE HAS NOT POINTED OUT ANY EVID ENCE AND DEFECT IN THE BOOKS OF ACCOUNT. AS PER RECORD, THE ASSESSING OFFICER HA S NOT EVEN ASKED THE ASSESSEE FOR VERIFICATION OF ANY EVIDENCE PRODUCED BY THE AS SESSEE. THEREFORE, THE QUESTION OF REJECTION OF BOOKS OF ACCOUNT DOES NOT ARISE. TH E ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE ONLY ON IMAGINARY GROUND WHEN T HERE IS NO OCCASION FOR ESTIMATING TURNOVER OF THE ASSESSEE. EVEN OTHERWISE , THE ASSESSING OFFICER HAS NOT RECORDED ANY LOGICAL REASON FOR ADOPTING THE ESTIMA TION BEFORE MAKING THE ADDITION IN DISPUTE AND SIMILARLY, LEARNED FIRST APPELLATE A UTHORITY HAS ALSO MADE THE ADDITION IN DISPUTE WITHOUT ANY LOGIC AND SUPPORTING MATERIA L. THEREFORE, THE ADDITION OF RS.50,000/- MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE LD. FIRST APPELLATE AUTHORITY FOR THE ASSESSMENT YEAR 1993-94 AND 1994- 95 DESERVE TO BE DELETED. 8 9. AS REGARDS TO ADDITION OF RS.1,35,318/- AS AGAIN ST RS.1,00,000/- SHOWN BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1993-94 AND RS .1,14,000/- AS AGAINST RS.50,000/- SHOWN BY THE ASSESSEE FOR ASSESSMENT YE AR 1994-95, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE IS CONTIN UED TO CARRY ON THE BUSINESS OF PLYING OF MINI BUS NO. UP 80B-9913 THROUGH HIS BROT HER, MR. JITENDRA KUMAR AGARWAL, PROPRIETOR M/S. MITTAL TOURS AND TRAVELS, AGRA. THE ASSESSEE RECEIVED A NET PAYMENT OF RS.1,00,000/- AFTER DEDUCTING COMMIS SION OR OTHER SETTLED EXPENSES. TO SUPPORT HIS CONTENTION, THE ASSESSEE HAS ALSO FI LED AFFIDAVIT OF MR. JITENDRA KUMAR AGARWAL, WHICH IS THE MATTER OF RECORD. THE L D. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE HAS ALSO FILED THE AFFIDAV IT OF MR. JITENDRA KUMAR AGARWAL, PROPRIETOR M/S. MITTAL TOURS AND TRAVELS, AGRA BEFO RE THE LD. FIRST APPELLATE AUTHORITY WHICH HAS NOT BEEN APPRECIATED PROPERLY. HE FURTHER STATED THAT THE ASSESSEE WORKED OUT THE NET INCOME FROM PLYING THE MINI BUS AFTER DEDUCTING THE INTEREST ON LOAN AND DEPRECIATION AND HAS FILED THE RETURN OF INCOME, BUT THE ASSESSING OFFICER AS WELL AS THE LEARNED FIRST APPE LLATE AUTHORITY COMPLETELY IGNORED THE FACTS AND MATERIAL PLACED ON RECORDS AN D DECIDED THE ISSUE RAISED BY THE ASSESSEE. SIMILARLY, LEARNED FIRST APPELLATE AUTHOR ITY HAS WRONGLY ESTIMATED THE INCOME FROM MINI BUSES AMOUNTING TO RS.1,42,440/- F OR THE ASSESSMENT YEAR 1993- 94 AND RS.1,20,000/- FOR THE ASSESSMENT YEAR 1994-9 5 AND ALSO ALLOWED ADMISSIBLE DEDUCTION IN BOTH THE ASSESSMENT YEARS IN DISPUTE. 9 10. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TOWARDS AFFIDAVIT DATED 12.01.2000 OF MR. JITENDRA KUMAR AG ARWAL S/O HARISH CHAND AGARWAL, R/O 12/14, JOGI PARA, SHAHGANJ, AGRA WHICH IS AT PAGE NO. 22 OF THE PAPER BOOK FILED BY THE ASSESSEE BEFORE THIS BENCH. HE STATED THAT SHRI JITENDRA KUMAR AGARWAL HAS CLEARLY STATED IN THE AFFIDAVIT T HAT HE HAS MADE THE NET PAYMENT OF RS.1,00,000/- TO THE ASSESSEE DURING THE PERIOD 01.04.1993 TO 31.03.1994 AFTER DEDUCTING THE COMMISSION AND OTHER SETTLED EXPENSES AND MADE A NET PAYMENT AMOUNTING TO RS.50,000/- TO HIM. HE FINALLY STATED THAT THE LEARNED FIRST APPELLATE AUTHORITY HAD MADE THE ADDITION IN DISPUTE IGNORING THE CONTENTION OF THE AFFIDAVIT FILED BY MR. JITENDRA KUMAR AGARWAL, WHICH IS AGAIN ST THE PRINCIPLE OF NATURAL JUSTICE. THEREFORE, THE ADDITION IN DISPUTE DESERVE S TO BE DELETED IN BOTH THE ASSESSMENT YEAR. 11. ON THE CONTRARY, THE LEARNED DR RELIED ON THE O RDER OF REVENUE AUTHORITY. 12. WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE RELEVANT RECORD AVAILABLE WITH US ON THE ADDITION ON ACCOUNT OF RECEIPTS FOR PLYING OF MINI BUS FOR THE ASSESSMENT YEAR IN DISPUTE. WE HAVE ALSO GONE THROU GH THE PAPER BOOK FILED BY THE LD. COUNSEL FOR THE ASSESSEE AND ESPECIALLY THE AFF IDAVIT OF MR. JITENDRA KUMAR 10 AGARWAL WHICH IS AT PAGE NO. 22 OF THE PAPER BOOKS. FOR THE SAKE OF CONVENIENCE, THE CONTENTS OF THE AFFIDAVIT DATED 12.01.2000 ARE REPRODUCED AS UNDER : BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), AAYKAR BHAWAN, SANJAY PLACE, AGRA. ------------------------------------------------ ------------ AFFIDAVIT OF MR. JITENDRA KUMAR AGARWAL S/O MR. HA RISH CHAND AGARWAL R/O 12/14, JOGI PARA, SHAHGANJ, AGRA AGED ABOUT 33 YEARS. --------------------------------------------------- ------------------------------------------------ RE. : APPEAL PROCEEDINGS RELATING TO MR. VIRENDRA KUMAR AGARWAL, R/O 12/14, JOGI PARA, SHAHGANJ, AGRA RELEVANT TO ASSESSMENT YEARS 1993-94 AND 1994-95 ------------------------------------------------ -------------- THE ABOVE NAMED DEPONENT SOLEMNLY AFFIRM AND STATE ON OATH AS UNDER : 1. THAT BEING THE PERSON CONCERNED, I AM FULLY CONVERS ANT WITH THE FACTS DEPOSED BELOW. 2. THAT DURING THE PERIODS 01.04.1992 TO 31.03.1993 AN D 01.04.1993 TO 31.03.1994, I WAS CARRYING ON THE BUSINESS OF PLYIN G OF OWN MINI BUSES AS WELL AS MINI BUSES/TAXI CARS OF OTHER PERSONS ON CO MMISSION BASIS, IN PROPRIETORSHIP UNDER THE NAME AND STYLE OF M/S. MIT TAL TOURS & TRAVELS, TULSI RAM KI BAGICHI, PANCHKUIYA ROAD, SHAHGANJ, AG RA. 3. THAT DURING THE PERIODS MENTIONED AT FOREGOING PARA 1, I HAD PLIED MINI BUS NO. UP 80B 9913 OWNED BY MR. VIRENDRA KUMAR AGA RWAL, JOGI PARA, SHAHGANJ, AGRA ON COMMISSION BASIS. DURING TH E 0PERIOD 01.04.1992 TO 31.03.1993, AFTER DEDUCTING MY COMMIS SION AND OTHER SETTLED EXPENSES, I HAD MADE NET PAYMENTS AGGREGATI NG TO RS.1,00,000/- TO HIM. FURTHER DURING THE PERIOD 01.04.1993 TO 31. 03.1994, AFTER DEDUCTING MY COMMISSION AND OTHER SETTLED EXPENSES, I HAD MADE NET PAYMENTS AGGREGATING TO RS.50,000/-. 4. THAT THE PAGES 25 & 27 (WHICH ARE ANNEXED TO AN FOR MING PART OF THIS AFFIDAVIT) OF THE ANNEXURE A-24 OF THE PANCHNAMA DR AWN AT THE RESIDENCE OF MR. HARISH CHAND AGARWAL, MY FATHER DURING THE C OURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED ON 26 TH MAY, 1993 SOLELY RELATES TO MY MINI 11 BUS/TAX CARS PLYING BUSINESS ETC. AND THESE HAVE GO T NO CONCERN OF WHATSOEVER NATURE WITH MY BROTHER MR. VIRENDRA KUMA R AGARWAL AND / OR HIS MINI BUS NO. UP 80 B 9913. 5. THAT I AM ASSESSED TO INCOME-TAX BY THE DEPUTY COMM ISSIONER OF INCOME-TAX, INVESTIGATION CIRCLE 2(1), AGRA. THAT THE CONTENTS OF THE FOREGOING PARAS ARE TRUE A ND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF, NO PART OF IT IS FALSE AND NOTHING HAS BEEN CONCEALED THEREIN. SIGNED AND VERIFIED AT AGRA ON THIS 12 TH DAY OF JAN., 2000. SD/- DEPONENT 13. AFTER GOING THROUGH THE CONTENTS OF THE AFORESA ID AFFIDAVIT, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FILED THE SAME BEFORE TH E COMMISSIONER OF INCOME-TAX (APPEALS), AAYKAR BHAWAN, SANJAY PLACE, AGRA. HE HA S NOT FILED THIS AFFIDAVIT BEFORE THE ASSESSING OFFICER. IN THE INTEREST OF JU STICE, WE ARE OF THE CONSIDERED OPINION THAT THE CONTENTS OF THE AFFIDAVIT REQUIRE VERIFICATION AT THE LEVEL OF ASSESSING OFFICER. IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO THE ASSESSING OFFICER WITH THE DIRECTION TO SUMMON MR. JITENDRA K UMAR AGARWAL, SUPPLY THE COPY OF AFFIDAVIT DATED 12.01.2000 TO HIM AND RECOR D THE STATEMENT AND DECIDE THE ISSUE IN DISPUTE AFTER GIVING OPPORTUNITY OF CROSS EXAMINATION OF JITENDRA KUMAR AGARWAL TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE RESULT, THE ISSUE O F ADDITION ON ACCOUNT OF RECEIPTS FROM PLYING THE MINI BUS FOR BOTH THE ASSESSMENT YE ARS IN DISPUTE IS SET ASIDE TO THE ASSESSING OFFICER TO DECIDE THE SAME AS STATED ABOV E. 14. AS REGARDS TO ADDITION OF RS.7200/- ON ACCOUNT OF EXPENSES FOR THE ASSESSMENT YEAR 1993-94, THE LEARNED COUNSEL FOR TH E ASSESSEE RELIED UPON THE 12 GROUND OF APPEAL AND THE LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 15. WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE MATERIAL ON RECORD ON THE ADDITION IN DISPUTE. WE ARE OF THE VIEW THAT THE AS SESSING OFFICER HAS STATED THAT NO EXPENDITURE WAS DEBITED IN THE PROFIT AND LOSS ACCO UNT FOR THE YEAR IN DISPUTE, BUT THE ASSESSEE STATED THAT THE CLAIM OF EXPENDITURE R EPRESENTED SALARY PAID TO SHRI HIMMAT SINGH, WHO WAS ENGAGED TO ASSIST THE ASSESSE E IN DAY-TO-DAY BUSINESS ACTIVITIES. THEREFORE, IT IS A BUSINESS EXPENDITURE AND THIS SALARY HAS BEEN PAID TO THE EMPLOYEE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER AS WELL AS THE LEARNED FIRST APPELLATE AUTH ORITY SUSTAINED THE ADDITION ON THE GROUND THAT NO PART OF IT HAS BEEN PAID OR DEBITED DURING THE PREVIOUS YEAR AND IT IS ONLY A DEVICE TO REDUCE TAX LIABILITY DURING THE YE AR 1993-94. WE HAVE ALSO GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIE S. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS CLAIMED SHOP EXPENSES IN DISPUTE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, BUT HE HAS NOT DEBITED TH E SAME IN HIS CASH BOOK IN RESPECT OF ANY EXPENSES. EVEN OTHERWISE, THESE EXPE NSES ARE ALSO NOT RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, THE REVENUE AUTHOR ITY HAS RIGHTLY DISALLOWED THE SAME. WE CONFIRM THE ADDITION OF RS.7200/- ON ACCOU NT OF SHOP EXPENSES FOR THE ASSESSMENT YEAR 1993-94. 16. AS REGARDS TO THE ADDITION OF RS.19030/- ON ACC OUNT OF UNEXPLAINED GOLD ORNAMENTS WEIGHING 71.800 GMS. FOR THE ASSESSMENT Y EAR 1994-95, LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE STARTED HIS S ARAFA BUSINESS SINCE 1990 AND ALSO DOING BUSINESS OF PLYING OF MINI BUSES. THE SHOP OF THE ASSESSEE IS LOCATED IN THE AREA WHERE VERY LOWER CLASS OF PEOPLE IS LIVING WHO NORMALLY WEAR SILVER ORNAMENTS. HE FURTHER STATED THAT WHEN MR. SHREE GO PAL, KARIGAR S/O LALA MAL 13 VERMA R/O GOKULPURA, AGRA DELIVERED GOLD NOSE-PINS/ NATH/VALLIES WEIGHING 71.800 GMS IN THE EVENING OF 25.05.1993 WHEN THE AS SESSEE WAS CLOSING HIS SHOP. THESE FACTS WERE ALSO SUPPORTED BY THE ASSESSEES S TATEMENT ON OATH RECORDED U/S. 132(4) OF THE ACT AT THE TIME OF SEARCH AND SEIZURE OPERATION CONDUCTED ON 26.05.1993. HE FURTHER STATED THAT ON 01.06.1993 WH EN THE SHOP WAS REOPENED AFTER SEARCH AND SEIZURE WERE CONCLUDED, SUCH GOLD ITEMS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT RELATING TO SARAFA BUSINESS BY DEB ITING TO THE PURCHASE ACCOUNT AND CREDITING TO THE ACCOUNT OF MR. SHREE GOPAL FOR RS.16,155/- BEING THE PURCHASE PRICE. SUBSEQUENTLY, THESE ITEMS WERE SOLD FOR RS.2 0,831/- AND BOTH SALES AND PROFIT THEREON WERE RECORDED IN THE BOOKS OF ACCOUNT AND A LSO REFLECTED IN THE RETURN OF INCOME RELATING TO THE ASSESSMENT YEAR 1994-95. HE FURTHER STATED THAT TO SUPPORT THIS CONTENTION, SHREE GOPAL KARIGAR ALSO GAVE HIS STATEMENT U/S. 131 OF THE INCOME-TAX ACT BEFORE THE ASSESSING OFFICER. HE REQ UESTED THAT THE ADDITION OF RS.19030/- TOWARDS UNEXPLAINED GOLD ORNAMENTS IS CO MPLETELY AGAINST THE FACTS OF THE CASE AND WITHOUT ANY EVIDENCE, THEREFORE, DESER VES TO BE DELETED. 17. ON THE CONTRARY, THE LEARNED DR RELIED ON THE O RDERS OF THE REVENUE AUTHORITIES. 18. WE HAVE HEARD THE BOTH PARTIES ON THE ADDITION OF RS.19030/- ON ACCOUNT OF GOLD ORNAMENTS WEIGHING 71.800 GMS FOUND FROM THE B USINESS PREMISES OF THE ASSESSEE. AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES WE ARE OF THE CONSIDERED OPINION THAT THE REVENUE AUTHORIT Y HAS NOT BROUGHT ON RECORD ANY CONTRARY EVIDENCE TO THE CONTENTION RAISED BY THE A SSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LEARNED FIRST APPELLA TE AUTHORITY. IT IS A MATTER OF RECORD THAT MR. SRI GOPAL KARIGAR R/O GOKULPURA AGR A HAS BEEN SUMMONED BY THE ASSESSING OFFICER U/S. 131 OF THE ACT ON THE REQUES T OF THE ASSESSEE. IT IS ALSO THE 14 MATTER OF FACT THAT THESE ITEMS IN DISPUTE WERE SOL D AND BOTH THE SALES AND PROFIT THEREFROM WERE RECORDED IN THE BOOKS OF ACCOUNT AND THE SAME IS ALSO REFLECTED IN THE RETURN OF INCOME RELEVANT TO THE ASSESSMENT YEA R 1994-95. THESE FACTS HAVE NOT BEEN CONTROVERTED BY THE REVENUE AUTHORITIES BELOW. THEREFORE, KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.19030/- ON ACCOUNT OF UNEXPLAINE D GOLD ORNAMENTS IS UNSUSTAINABLE IN THE EYE OF LAW, THEREFORE, DESERVE S TO BE DELETED AND WE DELETE THE SAME. 19. AS REGARDS TO THE ISSUE OF LEVYING INTEREST U/S . 234A AND 234B OF THE ACT, IT BEING CONSEQUENTIAL, THE ASSESSING OFFICER SHALL GI VE CONSEQUENTIAL EFFECT. 20. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.01.2011. SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14 TH JANUARY, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY