Shri Tanshukhrai N. Gaur, Baroda V. The Income tax Officer,Ward-2(1), Baroda

ITA 1487/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9584 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-10-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 29-04-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Keywords: Unexplained cash credit; Unexplained investment; Depreciation; Business expenditure; Income from undisclosed sources; Revised return; Reason to believe; Capital expenditure
• Section: 133A; 133(6); 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D, AHMEDABAD BEFORE SHRI BHAVNESH SAINI (JM) AND SHRI D.C. AGARW AL (AM) I.T.A. NO.1487/AHD/2008 - AY 2001-02 I.T.A. NO.3374/AHD/2007 - AY 2000-01 I.T.A. NO.3373/AHD/2007 - AY 1997-98 MR. TANSUKHRAI N GAUR VS ITO, WD.2(1) 12, ADARSH NAGAR SOCIETY BARODA NEAR CHHANI JAKAT NAKA VADODARA 390 002 PAN : AEBPG0408B (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. URVASHI SHODHAN RESPONDENT BY : SHRI SK MEENA O R D E R BHAVNESH SAINI : ALL THE ABOVE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD.CIT(A)-II, BARODA DA TED 01-02-2008 FOR ASSESSMENT YEAR 2001-02, DATED 18-05-2007 FOR ASSESSMENT YEAR 2000-01 AND DATED 18-05- 2007 FOR ASSESSMENT YEAR 1997-98. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL AVAILABLE ON RECORD. 3. THE BRIEF BACKGROUND OF THE CASE LEADING TO FILI NG OF THE PRESENT APPEALS IS THAT A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSIN ESS PREMISES OF THE ASSESSEE ON 11-01-2002. DURING THE COURSE OF SURVEY AND IN PURSUANCE OF SURVEY PROCEEDINGS STATEMENT OF SHRI TN GAUR, THE ASSESSEE , WAS RECORDED. THE STATEMENT DATED 23-01-2002 RECORDED U/S 131 IS CONC LUSIVE AND STATEMENT OF UNACCOUNTED INCOME OF THE ASSESSEE HAS BEEN RECORDE D IN THE HANDWRITING OF THE ASSESSEE HIMSELF. THE PORTION OF THE STATEMENT PERTAINED TO ASSESSMENT YEAR 2000-01 HAS BEEN DEALT WITH IN THE ORDER U/S 1 43(3). THE STATEMENT PERTAINING TO UNACCOUNTED INCOME FOR THE ASSESSMENT YEAR 2001-02 WAS ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 2 CONSIDERED ON THE BASIS OF THE STATEMENT OF THE ASS ESSEE IN WHICH UNACCOUNTED INCOME AND EXPENSES WERE EXPLAINED AS INCOME UNDER THE HEAD SCRAP SALES RS.89,000, INTEREST INCOME - RS.20,000, AND CAS H SHORTAGE - RS.12,05,300. THE EXPENSES AND OUTGOING FUNDS WERE DEPOSITS RS. 3 LAKHS, HOUSEHOLD EXPENSES - RS.3 LAKHS AND DEPOSITS IN BANK ACCOUNT OF DHRUV SALES RS.7,94,300. THE CASH SHORTAGE WAS INCURRED OUT OF CASH GENERATE D OUTSIDE BOOKS DUE TO EXCESS CLAIM OF EXPENSES. LOANS ARE GIVEN TO VARIO US PERSONS AND THIS IS ALSO GIVEN OUT OF CASH GENERATED OUTSIDE BOOKS. THE ASS ESSEE EXPLAINED THAT M/S DHRUV SALES CORPORATION (BISCUIT AGENCY), A CONCERN WHICH WAS STARTED BY HIM TWO YEARS BEFORE BUT ASSESSEE FAILED FULLY AND SETT LED THE ACCOUNT BY PAYING CASH OF RS.7,94,300 AS STATED ABOVE FROM THE INCOME OF D HRUV TRANSPORT SERVICES OUTSIDE BOOKS. ASSESSEE THEREFORE OFFERED RS. 12,0 5,300 AS UNDISCLOSED / UNDER ESTIMATED INCOME FOR ASSESSMENT YEAR 2001-02. APAR T FROM THE ABOVE EXPENSES, THE FOLLOWING EXPENSES WERE ALSO DISALLOW ABLE, VIZ. OVERLOADING PENALTY, CAPITAL EXPENDITURE, CONSTRUCTION OF OFFIC E BUILDING BUT DEBITED TO PROFIT & LOSS ACCOUNT AND ALSO DEPRECIATION ON THE SAME (RS. 6,47,105). THE TOTAL NET ESTIMATED INCOME FOR ASSESSMENT YEAR 2000-01 WAS EX PLAINED AS UNEXPLAINED INVESTMENT AND EXPENSES AS PER CASH FLOW STATEMENT OF RS.12,05,300, OVERLOADING PENALTY OF RS.17,105 AND CAPITAL EXPEND ITURE, REPAIRS TO BUILDINGS RS.6,30,000 (TOTAL RS.18,52,405). THE ASSESSEE OFF ERED THIS AMOUNT FOR TAX AND FILED REVISED RETURN. THE ASSESSEE, HOWEVER, LATER ON FILED AN AFFIDAVIT AND SUBMITTED THAT STATEMENT WAS GIVEN UNDER DURESS AND DISTURBED STATE OF MIND AND RETRACTED FROM HIS EARLIER STATEMENT. DURING T HE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2001-02 ASSESSEE WAS SHOW CAUSED AS TO WHY ADDITION SHOULD NOT BE MADE ON THE ABOVE BASIS. THE ASSESSEE STATE D ON OATH THAT HIS TOTAL ESTIMATED UNACCOUNTED INCOME FOR ASSESSMENT YEAR 20 01-02 WAS AS UNDER:- 1. UNEXPLAINED INVESTMENT & EXPENSES AS PER CASH FLOW STATEMENT RS. 12,05,300 2. OVERLOADING PENALTY RS. 17,105 3. CAPITAL EXPENDITURE RS. 6,30,000 ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 3 TOTAL RS. 18,52,405 IT WAS EXPLAINED THAT STATEMENT OF CASH FLOW EXPLAI NED BY THE ASSESSEE DURING THE COURSE OF RECORDING OF HIS STATEMENT WAS NOT CO RRECT AND TRUE. IT WAS SUBMITTED THAT DEPOSIT IN BANK ACCOUNT OF DHRUV SAL ES OF RS.7,94,300 DID NOT PERTAIN TO ASSESSMENT YEAR UNDER CONSIDERATION. CO PY OF THE PASSBOOK OF THE BANK WAS FILED AND ON VERIFICATION THE CLAIM OF THE ASSESSEE WAS FOUND TO BE CORRECT AS THE ENTRIES OF CASH DEPOSIT WERE FOUND O N 30-12-1998 RS.4 LAKHS, RS.1,95,000, AND RS.1,55,000; AND ON 31-12-1998 - R S.44,320. HOWEVER, AS PER THE STATEMENT CALLED FOR FROM THE BANK U/S 133(6) T HE ENTRIES WERE SHOWN AS UNDER: 1. 24-12-1999 CASH RS. 4,00,000 2. -DO- -DO- RS. 1,95,000 3. 27-12-1999 -DO- RS. 1,55,000 4. 31-12-1999 -DO- RS. 44,320 RS. 7,94,320 THE ASSESSING OFFICER THEREFORE NOTED THAT THE ABOV E AMOUNT OF RS.7,94,320 PERTAINED TO THE ASSESSMENT YEAR 2000-01 FOR WHICH ACTION WOULD BE TAKEN ACCORDINGLY. AS REGARDS DEPOSIT OF RS.3 LAKHS SHOW N AS UNDISCLOSED DEPOSIT IT WAS SUBMITTED THAT LOAN OF RS.3 LAKHS WAS GIVEN TO SHRI RAJENDRAKUMAR MOHANLAL SHAH BY ACCOUNT PAYEE CHEQUE DATED 10-07-2000. REG ARDING HOUSEHOLD EXPENSES ASSESSEE SUBMITTED THAT AMOUNT WAS WITHDRA WN FROM BANK ACCOUNTS AS WELL AS FROM DHRUV TRANSPORT SERVICES BY THE ASS ESSEE, HIS WIFE AND BROTHER, WHO WERE FILING THE RETURNS OF INCOME SEPARATELY. ON THE INCOME SIDE OF THE CASH OFFERED ASSESSEE HAS SHOWN SCRAP SALES, INTEREST IN COME, CASH SHORTAGE AND IT WAS EXPLAINED THAT ASSESSEE FILED REVISED RETURN OF INCOME. IT WAS, THEREFORE, EXPLAINED THAT ALL THE DEPOSITS OF RS. 3 LAKHS, RS. 7,94,320 AND RS.3 LAKHS ARE EXPLAINED. THE CASH FLOW STATEMENT OF THE ASSESSE E IS RECORDED ON PAGE 4 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001-02. THE ASSESSING OFFICER ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 4 ACCORDINGLY DISCUSSED THE REMAINING ADDITIONS ON ME RIT IN EACH ASSESSMENT YEAR SEPARATELY ON WHICH LEARNED CIT(A) CONFIRMED THE AD DITIONS. THEREFORE, ALL THE ADDITIONS ON MERIT ARE CONSIDERED SEPARATELY IN EAC H ASSESSMENT YEAR HEREINBELOW. ITA NO.1487/AHD/2008 (AY 2001-02) 4. ON GROUND NO.1 ASSESSEE CHALLENGED THE ADDITION OF RS.5,96,575 U/S 68 AS UNEXPLAINED CASH CREDIT. DURING THE COURSE OF A SSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES PERTAININ G TO KACCHA CASH BOOK IMPOUNDED AS PER ANNEXURE A-5 SUBSEQUENT TO SURVEY. THIS BOOK CONTAINS FINANCIAL TRANSACTIONS OF RS.62,15,724. IT WAS SUB MITTED THAT KACCHA CASH BOOK WAS MAINLY MEMORANDUM BOOK AND NOT HAVING ALL THE C ASH ENTRIES IN IT. THE CASH PAYMENTS MADE TO KEY PERSONS OF THE BUSINESS W ERE MADE IN IT AND ON FURNISHING OF THE ACCOUNTS, THE EXPENSES WERE ENTER ED IN THE MAIN CASH BOOK AND THEIR WORKINGS WERE NO MORE KEPT ON RECORD. IT WAS ALSO SUBMITTED THAT CASH WAS WITHDRAWN BY THE ASSESSEE FOR MAKING LUMP SUM PAYME NTS FOR ROUTINE BUSINESS EXPENSES. IN RESPECT OF BHAKTI FINANCE AMOUNT OF R S.6,04,665 WAS FOUND. THE PROPRIETOR OF BHAKTI FINANCE DENIED OF HAVING ANY T RANSACTION WITH THE ASSESSEE. THE ASSESSEE COULD NOT EXPLAIN THE NATURE OF TRANSA CTION WITH BHAKTI FINANCE AND HENCE THE MAXIMUM AMOUNT IN THIS ACCOUNT WAS WORKED OUT AT RS.5,96,575 ON 16-02-2001. SAME WAS TREATED AS UNACCOUNTED AND AD DED TO THE TOTAL INCOME. 4.1 IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT ENTR IES RELATING TO THE TRANSACTION WERE FOUND DURING THE COURSE OF SURVEY. THIS DEMONSTRATES THE GENUINENESS OF THE TRANSACTIONS. ALL AMOUNTS CREDI TED DURING THE YEAR TO THE ACCOUNT OF THE SAID PARTY ARE RETURNED IN THE SAME YEAR AND NO NET AMOUNT OF SURPLUS REMAINS AT THE END OF THE YEAR. IT WAS THE REFORE SUBMITTED THAT ADDITION IS UNJUSTIFIED. THE LD.CIT(A), HOWEVER, DID NOT ACCEP T THE CONTENTION OF THE ASSESSEE AND REJECTED THIS GROUND OF APPEAL OF THE ASSESSEE. THE FINDINGS AT PARAGRAPH 3.3 OF THE IMPUGNED ORDER ARE REPRODUCED BELOW: ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 5 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND FACTS OF THE CASE. THE AMOUNT CREDITED IN THE NAME OF BH AKTI FINANCE WAS AS PER KACCHA CASH BOOK FOUND DURING THE COURSE OF SURVEY. THE SAID PARTY ON VERIFICATION DENIED HAVING GIVEN ANY LOAN TO THE APPELLANT. IN THE ABSENCE OF CONFIRMATION FROM THE PARTY ALLEGEDLY HAVING GIVEN THE LOAN, THE CREDIT APPEARING IN HE N AME OF BHAKTI FINANCE IN KACCHA CASH BOOK IS UNEXPLAINED. APPELL ANTS EXPLANATION THAT CASH BOOK WAS FOUND DURING THE SUR VEY HENCE IT SHOULD BE BELIEVED IS WITHOUT ANY BASIS. THE ENTRIES MADE IN THE CASH BOOK HAS TO BE VERIFIED AND ONUS TO EXPLAIN TH E CREDIT ENTRIES IS ON THE APPELLANT. THE ONUS WAS NOT DISC HARGED AND DEPARTMENT ON VERIFICATION FOUND THAT M/S. BHAKTI F INANCE DENIED ANY SUCH TRANSACTION WITH THE APPELLANT. IN VIEW OF THESE FACTS, THE CREDIT APPEARING IN THE NAME OF BH AKTI FINANCE IS ESTABLISHED TO BE UNEXPLAINED AND HENCE ADDITION MADE BY THE ASSESSING OFFICER U/S. 68 IS CONFIRMED. 4.2 LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SMALL DIARY WAS KEPT FOR ROUTINE BUSINESS EXPENSES. THE KACCHA CASH BOOK ME NTIONED FINALIZATION OF PAYMENTS TO DRIVERS, ETC. IT WAS PRIMARY CASH BOOK FOUND AND NO ENTRY WAS RECORDED IN THE FINAL BOOKS OF ACCOUNT. LEARNED CO UNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT NO ADDITION U/S 68 COULD BE MADE IN RESPECT OF THE KACCHA BOOK. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESE NTATIVE RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 4.3 WE HAVE CONSIDERED RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). IT IS NOT IN DISPUTE THAT THE ENTRIES RELATING TO BHAKTI FINANCE WERE FOUND DURING THE CO URSE OF SURVEY FROM THE POSSESSION OF THE ASSESSEE. THE ABOVE BOOK CONTAIN ED FINANCIAL TRANSACTIONS. SINCE THE ENTRIES RELATING TO BHAKTI FINANCE WERE F OUND IN THE DOCUMENT FOUND DURING THE COURSE OF SURVEY, VERIFICATION WAS MADE FROM THE SAID PARTY WHO DENIED OF HAVING GIVEN ANY LOAN TO THE ASSESSEE. S INCE NO CONFIRMATION FROM THE PARTY WAS FILED, THE ASSESSING OFFICER HAS RIGHTLY TREATED THE CREDITS APPEARING IN THE NAME OF BHAKTI FINANCE IN KACCHA CASH BOOK AS U NEXPLAINED. THE ASSESSEE CONTENDED BEFORE THE LEARNED CIT(A) THAT THESE ARE GENUINE TRANSACTIONS AND ALL AMOUNTS CREDITED DURING THE YEAR TO THE ACCOUNT OF THE SAID PARTY ARE RETURNED IN THE SAME YEAR AND SINCE AT THE END OF THE YEAR NO A MOUNT WAS LEFT THEREFORE NO ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 6 ADDITION COULD BE MADE. IT WOULD PROVE THAT THE AS SESSEE HAS NOW CHANGED THE STAND TAKEN BEFORE THE LEARNED CIT(A). THE SUBMISS IONS OF THE ASSESSEE BEFORE THE LEARNED CIT(A) SHOWS THAT THE ASSESSEE ADMITTED ALL THE ENTRIES IN RESPECT OF TRANSACTIONS CONDUCTED WITH BHAKTI FINANCE BECAUSE RECEIPTS AND PAYMENTS HAVE NOT BEEN DISPUTED. HOWEVER, NOW IT IS CLAIMED THAT THE ADDITION CANNOT BE MADE U/S 68 OF THE I.T. ACT AND THAT THE KACCHA CAS H BOOK CONTAINED ONLY SMALL EXPENSES PAID TO THE DRIVER, ETC. HOWEVER, IN THIS CASE, ON VERIFICATION, THE PROPRIETOR OF BHAKTI FINANCE DENIED OF HAVING ANY T RANSACTION WITH THE ASSESSEE AND THE BOOKS OF ACCOUNT OF BHAKTI FINANCE ALSO DID NOT CONTAIN ANY TRANSACTION WITH THE ASSESSEE THAT WERE APPEARING IN THE KACCHA CASH BOOK. THUS, THE ASSESSEE HAS FAILED TO EXPLAIN THE NATURE OF TRANSA CTION WITH M/S BHAKTI FINANCE. ASSESSING OFFICER, THEREFORE, TAKEN THE PEAK OF THE SAME AND CORRECTLY MADE THE ADDITION. SINCE THE INCRIMINATING MATERIAL WAS FOU ND DURING THE COURSE OF SURVEY AND ASSESSEE DID NOT DISPUTE ENTRIES CONTAINED IN T HE MATERIAL FOUND DURING THE COURSE OF SURVEY, THE BURDEN IS UPON THE ASSESSEE T O EXPLAIN THE ENTRIES APPEARING IN THE IMPOUNDED DOCUMENT. HOWEVER, THE ASSESSEE DID NOT DISCHARGE THE ONUS OF EXPLAINING THE ENTRIES CONTAI NED IN THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY. THE BACKGROUND OF THE CASE IS NOTED ABOVE WHICH PROVES THAT DURING THE COURSE OF SURVEY SEVERAL INC RIMINATING DOCUMENTS WERE FOUND AGAINST THE ASSESSEE IN RESPECT OF OTHER YEAR S ALSO AND ASSESSEE FAILED TO EXPLAIN ANY OF THEM. SINCE THE DETAILS CONTAINED I N THE KACCHA CASH BOOK WERE NOT FOUND RECORDED IN THE BOOKS OF ACCOUNT OF THE A SSESSEE, IT IS A CLEAR CASE OF MAKING BOGUS ENTRIES OF THE TRANSACTIONS BETWEEN AS SESSEE AND BHAKTI FINANCE. IT WOULD SHOW THAT ASSESSEE ROTATED HIS OWN MONEY I N THE NAME OF BHAKTI FINANCE AND ON FAILURE TO EXPLAIN THE SAME ADDITION WAS CORRECTLY MADE U/S 68 OF THE I.T. ACT TREATING THE SAME TO BE UNEXPLAINED CA SH CREDITS. IT MAY ALSO BE NOTED HERE THAT KACCHA CASH BOOK IS ALSO PART OF TH E BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, THEREFORE, ENTRIES FOUND THEREON W OULD JUSTIFY THE ACTIONS OF THE AUTHORITIES BELOW IN MAKING AND CONFIRMING THE ADDI TION. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSE SSEE. SAME IS ACCORDINGLY DISMISSED. ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 7 5. ON GROUND NO.2 ASSESSEE CHALLENGED THE ADDITION OF RS.4 LAKHS U/S 68 FOR UNEXPLAINED CASH CREDIT. THE ASSESSING OFFICER MAD E THE ADDITION OF RS.7,34,000 ON ACCOUNT OF UNEXPLAINED ENTRIES OUT OF THE CASH B OOK. THE ASSESSEE ON THE BASIS OF KACCHA CASH BOOK FURNISHED STATEMENT OF CA SH WITHDRAWN AT RS. 44,07,559. IN THIS AMOUNT, RS.23,83,150 WAS SHOWN AS SALARIES PAID TO DRIVERS AND CONDUCTORS, RS. 6,34,000 WAS SHOWN AS VARIOUS E XPENSES, PURCHASES OF LAND, ETC. AND BALANCE OF RS.13,90,409 WAS CLAIMED AS FOR VARIOUS EXPENSES. THE ASSESSEE COULD NOT FURNISH COMPLETE DETAILS IN RESPECT OF RS.13,90,409. IN THE ABSENCE OF DETAILS AND NATURE OF BUSINESS A LUM P SUM DISALLOWANCE OF RS.1 LAKH WAS MADE OUT OF THE SAME AMOUNT BY THE ASSESSI NG OFFICER. THE ASSESSEE ALSO COULD NOT EXPLAIN THE SOURCE OF RS.6,34,000 IN CURRED FOR PERSONAL EXPENSES AND INVESTMENT AND HENCE SAME WAS ALSO DISALLOWED. THE ASSESSING OFFICER ACCORDINGLY MADE ADDITION OF RS.7,34,000 (RS.6,34,0 00 + RS. 1,00,000). 5.1 IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT DURI NG THE YEAR WITHDRAWALS OF RS.5,51,731 WAS MADE AND ABOUT RS.4 LAKHS WAS AVAIL ABLE WITH THE ASSESSEE WHICH IS CLAIMED TO HAVE BEEN TAKEN FROM HIS FATHER . IT WAS ALSO CONTENDED THAT THE ASSESSEE HAD SUBSTANTIAL CASH BALANCE IN BOOKS OF ACCOUNT BUT SOME ENTRIES WERE OMITTED BY THE ACCOUNTANT. THE ASSESSEE CONTE NDED THAT SOURCE WAS ADEQUATELY EXPLAINED. WITHOUT PREJUDICE TO ABOVE, THE ASSESSEE ALSO CONTENDED THAT ADDITION ON THIS GROUND AND ALSO ON ACCOUNT OF DISBELIEVING OF THE TRANSACTION WITH BHAKTI FINANCE AND DIESEL AND REPAIR EXPENSES ARE NOT JUSTIFIED SIMULTANEOUSLY, AS DEBITS IN THESE ACCOUNTS WOULD E XPLAIN WITHDRAWALS FOR PERSONAL EXPENSES. THE LD.CIT(A) CONSIDERING THE E XPLANATION OF THE ASSESSEE RESTRICTED THE ADDITION TO RS.4 LAKHS AND DELETED T HE ADDITION OF RS.3,34,000. HIS FINDINGS AT PARAGRAPH 6.3 OF THE IMPUGNED ORDER ARE REPRODUCED BELOW: 6.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND FACTS OF THE CASE. ASSESSING OFFICER ADDED RS.6,34,000/- ON THE GROUND THAT AS PER ASSESSEE HAD INCURRED VARIOUS CASH EXPE NSES STARTING FROM AUGUST 2000 ONWARDS. APART FROM THESE, APPELL ANT DID NOT GIVE COMPLETE DETAILS OF OTHER AMOUNT FOR VARIOUS E XPENSES AND THEREFORE A LUMP-SUM DISALLOWANCE OF RS.1 LAC WAS M ADE OUT OF ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 8 RS.13,90,409/-. THUS, TOTAL DISALLOWANCE OF RS.7,3 4,000/- WAS MADE CONSISTING OF RS.6,34,000/- FOR PERSONAL EXPEN SES / UNEXPLAINED INVESTMENT AND RS.1 LAC FOR LUMP-SUM DI SALLOWANCE. APPELLANT SUBMITTED THAT THE PERSONAL EXPENSES / IN VESTMENTS WERE MADE OUT OF TOTAL WITHDRAWALS DURING THE YEAR WHICH WAS MORE THAN RS.5,50,000/- AND APART FROM THAT HE HAD ABOUT RS.4 LACS AVAILABLE FROM HIS FATHER DURING THE YEAR. FURTHER, THE CASH CREDIT IN THE NAME OF BHAKTI FINANCE WAS ALSO DISALLOWED. CONSIDERING ALL THESE FACTS, IT CANNOT BE SAID THAT APPELLANT DID NOT HAVE SOURC E TO FUND ANY OF THE PERSONAL EXPENSE OR INVESTMENT. CONSIDERING HI S CASH WITHDRAWAL AND CASH CREDITS IN THE NAME OF BHAKTI F INANCE CONFIRMED EARLIER, THE ADDITION OUT OF RS.6,34,000/ - IS CONSIDERED AS EXPLAINED FROM HIS PERSONAL WITHDRAWALS AND FROM OT HER DISALLOWANCES. AS REGARDS AD-HOC ADDITION OF RS.1 LAC, SINCE APPE LLANT COULD NOT GIVE DETAILS OF RS.13,90,409/-, THE SAME IS CON FIRMED IN THE ABSENCE OF ANY DETAILS GIVEN AT APPELLATE STAGE ALS O. THUS OUT OF TOTAL ADDITION OF RS.7,34,000/-, ADDITION OF RS.4,0 0,000/- IS CONFIRMED AND REMAINING RS.3,34,000/- IS DELETED. 5.2 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND ALSO SUBMITTED THAT THE A DDITIONS MADE ON OTHER ISSUES MAY BE AVAILABLE TO THE ASSESSEE. THEREFORE, ON TE LESCOPING, FURTHER ADDITION MAY BE DELETED. ON THE OTHER HAND, THE LD.DR RELIE D UPON THE ORDERS OF AUTHORITIES BELOW. 5.3 ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A ). THE ASSESSEE, ON THE BASIS OF THE KACCHA CASH BOOK FURNISHED THE STATEMENT OF CAS H WITHDRAWALS AND ALSO GIVEN THE DETAILS OF THE EXPENDITURE. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY EVIDENCE TO EXPLAIN THE PERSONAL EXPENSES / UNEXPLA INED INVESTMENTS AND ALSO COULD NOT PROVE THAT EXPENSES WERE INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. WHATEVER BENEFIT ASSESSEE WANTED, THAT S ET OFF OF THE SAME MAY BE GIVEN, BEFORE LEARNED CIT(A), THE LD.CIT(A) HAS ALR EADY BEEN GIVEN TO THE ASSESSEE. THE LD.CIT(A) CONSIDERING TELESCOPING BE NEFIT AND ALL OTHER ATTENDING CIRCUMSTANCES, REDUCED THE ADDITION CONSIDERABLY. THEREFORE, IN THE ABSENCE OF ANY FURTHER EVIDENCE ON RECORD, WE DO NOT FIND IT T O BE A FIT CASE FOR INTERFERENCE IN ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 9 THE ORDER OF THE LD.CIT(A). WE CONFIRM THE FINDING S OF LD.CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ITA NO.3374/AHD/2007 (A.Y. 2000-01) 7. LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUND NO.1 OF THE APPEAL CHALLENGING THE REOPENING OF THE ASSESSMENT U/S 147 OF THE I.T. ACT. THIS GROUND OF APPEAL OF THE ASSESSEE IS THUS DISMISSED. 8. ON GROUNDS NO.2 & 3, THE ASSESSEE CHALLENGED THE ADDITION OF RS.7,94,320 U/S 68 AS UNEXPLAINED CASH CREDITS. TH E ASSESSEE FILED COPY OF THE BANK ACCOUNT BEFORE ASSESSING OFFICER TO SHOW THAT THERE ARE DEPOSITS IN HIS BANK ACCOUNT IN A SUM OF RS.7,94,320 BEING CASH DEPOSITS ON 30-12-1998 AND 31-12- 1998. HOWEVER, THE BANK STATEMENT FROM THE BANK WA S CALLED FOR WHICH SHOWED THAT CASH WERE DEPOSITED ON FOUR OCCASIONS I.E. ON 24-12-1999, 27-12-1999 AND 31-12-1999 IN A SUM OF RS.4 LAKHS; RS.1,95,000; RS. 1,55,000; AND RS.44,320 TOTALLING RS.7,94,320. IT WAS, THEREFORE, CLEAR TH AT THE ABOVE AMOUNT PERTAINED TO ASSESSMENT YEAR 2000-01. THIS FACT IS ALSO NOT DIS PUTED BY LEARNED COUNSEL FOR THE ASSESSEE DURING THE COURSE OF ARGUMENTS. THE A SSESSEE TOOK THE PLEA BEFORE THE LD.CIT(A) THAT ASSESSEE WAS HAVING WHOLE SALE BUSINESS OF SALE AND PURCHASE OF BISCUITS AND CONFECTIONERY SINCE 1996 A ND THE AMOUNT OF CASH DEPOSITED PERTAINED TO THAT BUSINESS. THE CONTENTI ON WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT ASSESSEE FAILE D TO FURNISH ANY EVIDENCE BY WAY OF PURCHASE BILLS, SALE BILLS, NAMES AND ADDRES SES OF THE PARTIES. IT WAS ALSO EXPLAINED THAT SINCE THERE WAS A LOSS IN THE BUSINE SS, IT WAS NOT SHOWN IN THE RETURN OF INCOME FILED. IT WAS ALSO EXPLAINED THAT SINCE NO PROFIT WAS MADE, NO PROFIT & LOSS ACCOUNT AND BALANCE-SHEET WAS SUBMITT ED ALONG WITH THE RETURN OF INCOME FOR ASSESSMENT YEAR 2000-01 AND SINCE THE TU RNOVER WAS BELOW RS.40 LAKHS ACCOUNTS WERE NOT AUDITED. IT WAS ALSO EXPLA INED THAT AMOUNTS WERE DEPOSITED OUT OF THE SALE PROCEEDS OF BISCUITS AND CONFECTIONERY OF DHRUV SALES ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 10 CORPORATION. HOWEVER, THE CONTENTION OF THE ASSESS EE WAS NOT ACCEPTED BECAUSE THE SOURCE OF THE DEPOSIT IS NOT PROVED THR OUGH ANY EVIDENCE ON RECORD. THE LD.CIT(A) ACCORDINGLY REJECTED THE CONTENTION O F THE ASSESSEE. HIS FINDINGS AT PARAGRAPHS 3.5 TO 3.5.3 ARE AS FOLLOWS: 3.5 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD.CO UNSEL AND FACTS OF THE CASE. AS PER THE LAST QUESTION APPEAR ING AT PAGE NO.9 OF APPELLANTS STATEMENT RECORDED ON 11 TH JANUARY 2002 SOME PAY- IN-SLIPS PERTAINING TO M/S DHRUV SALES CORPORATION WERE FOUND DURING THE COURSE OF SURVEY SHOWING CASH DEPOSITS T OTALING RS.7,94,320/-. WHEN THESE PAY-IN-SLIPS WERE CONFRO NTED TO THE APPELLANT, EH REPLIED, AS PER ANSWER ON PAGTE 10 OF THE AFORESAID STATEMENT, THAT EH HAD TAKEN AN AGENCY OF CHAMPION BISCUITS, BOMBAY, IN THE YEAR 1999 WHICH WAS CLOSED WITHIN 4 6 MONTHS. IT IS FURTHER STATED IN THE SAME ANSWER THAT HE HAD TA KEN A CC LIMIT FROM CHHANI NAGRIK SAHAKARI BANK LTD. AND THE PAY-I N-SLIPS UNDER THE CONSIDERATION WERE REPAYMENT OF LOAN EARLIER TA KEN FROM THE AFORESAID BANK AND THE ENTRIES ARE REFLECTED IN THE CASH-BOOK OF M/S DHRUV TRANSPORT. SINCE THE STATEMENT WAS RECORDED ON THE VERY DAY OF SURVEY, THEREFORE, IT WAS SPONTANEOUS AND HE NCE CARRIES EVIDENTIARY VALUE. SUBSEUENTLY, A STATEMENT IN APP ELLANTS OWN HANDWRITING WAS RECORDED ON 23 RD JANUARY 2002 WHEREIN HE MADE DISCLOSURE OF UNACCOUNTED INCOME IN RESPECT OF A.YS 2000-01, 2001-2002 AND 2002-2003. IT IS CLEARLY STATED IN T HE AFORESAID STATEMENT THAT THE AMOUNTS OF UNACCOUNTED INCOMES H AD BEEN CALCULATED AFTER REFERRING TO THE BOOKS OF ACCOUNTS AND DOCUMENTS AND ON THE BASIS OF CASH FLOW STATEMENT PREPARED BY THE APPELLANT HIMSELF. AS PER THE AFORESAID STATEMENT, A DISCLOS URE OF RS.18,52,405/- WAS MADE IN RESPECT OF A.Y. 2001-200 2 WHICH INCLUDED CASH SHORTAGE OF RS.12,05,300/- WHICH, IN TURN, INCLUDED THE AMOUNT UNDER CONSIDERATION VIZ. RS.7,94,300/- D EPOSITED IN THE BANK ACCOUNT OF M/S DHRUV SALES CORPORATION. IT WA S DURING THE ASSESSMENT PROCEEDINGS FOR A.Y. 2001-2002, IT WAS B ROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE AFORESAID DEPOSITS IN THE BANK, IN FACT, PERTAINED TO A.Y. 2000-2001 AND NOT A.Y. 2001-2002. THE SAME FACT WAS ALSO VERIFIED AND FOUND TO BE COR RECT FROM THE STATEMENT OF THE BANK ACCOUNT WHICH WAS CALLED BY W AY OF ISSUE OF NOTICE U/S 133(6). 5.1 THE PLEA NOW TAKEN BY THE APPELLANT THAT THE SO URCE OF CASH DEPOSITS OF RS.7,94,320/-, AS STATED EARLIER, IS TH E WHOLESALE BUSINESS OF SALE AND PURCHASE OF BISCUITS AND CONFE CTIONERIES WHICH HE STATED TO HAVE BEEN DOING SINCE 1996 IS IN CONTRADICTION TO HIS STATEMENT RECORDED ON THE DAY OF SURVEY VIZ. 11 TH JANUARY 2002 ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 11 AS REFERRED TO ABOVE. MOREOVER, THE FINDING OF THE ASSESSING OFFICER THAT THE PURCHASE / SALE BILLS, NAMES AND A DDRESSES OF THE PARTIES WITH WHOM THE APPE3LLANT HAD CLAIMED TO HAV E TRANSACTED WERE NOT PRODUCED DURING ASSESSMENT PROCEEDINGS IS NOT REBUTTED. MERELY BECAUSE A SALES TAX NUMBER IS OBTAINED OR A CREDIT LIMIT WAS SANCTIONED FROM THE BANK IN THE NAME OF M/S DHRUV S ALES CORPORATION DOES NOT EXPLAIN THE SOURCE OF THE DEPO SITS OF CASH IN THE AFORESAID BANK ACCOUNT. MOREOVER, AS PER STATE MENT RECORDED ON 11 TH JANUARY 2002 M/S DHRUV SALES CORPORATION IS CLAIME D TO HAVE BEEN STARTED IN 1999 FOR 4 - 6 MONTHS. AS PER STATEMENT RECORDED ON 23 RD JANUARY 2002 THE SAME CONCERN WAS CLAIMED TO HAVE BEEN STARTED TWO YEARS BEFORE RECORDING THE ST ATEMENT ON 23 RD JANUARY 2002 WHICH MEANS THAT IT WAS STARTED IN JAN UARY 2000. NOW THE STAND TAKEN BEFORE THE ASSESSING OFFICER IS THAT THE SAME CONCERN WAS STARTED IN THE YEAR 1996. 3.5.2 IN THE STATEMENT RECORDED ON 11 TH JANUARY 2002, IT WAS DEPOSED BY THE APPELLANT THAT THE SOURCE OF CASH DE POSITED IN THE AFORESAID BANK ACCOUNT COULD BE FOUND IN THE CASH B OOK OF M/S DHRUV TRANSPORT. IN THE STATEMENT RECORDED ON 23 RD JANUARY 2002, IT WAS REAFFIRMED THAT THE CASH WAS PAID OUT OF THE UNACCOUNTED INCOME OF M/S DHRUV TRANSPORT SERVICES. NOW IN THE PRESENT PROCEEDINGS, THE APPELLANT HAS CHANGED THE STAND AN D THE SOURCE IS CLAIMED TO BE WHOLESALE BUSINESS IN THE NAME OF M/S DHRUV SALES CORPORATION CLAIMED TO BE SETUP IN 1996. 3.5.3 IN VIEW OF THE DISCUSSIONS GIVEN ABOVE AND CL EAR-CUT ADMISSION BY THE APPELLANT HIMSELF, I DO NOT FIND A NY INFIRMITY IN BRINGING TO TAX THE AMOUNT OF CASH TOTALING RS.7,94 ,320/- DEPOSITED IN THE BANK ACCOUNT MAINTAINED IN THE NAME OF M/S D HRUV SALES CORPORATION DURING THE ASSESSMENT YEAR UNDER CONSID ERATION. THE ADDITION MADE BY THE ASSESSING OFFICER, IS THEREFOR E CONFIRMED. 8.1 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LD.D EPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 8.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD AND ALSO CONSIDERED REPLY FILED BY ASSESSEE PLACED AT P AGES 55 & 56 OF THE PAPER BOOK ON THIS ISSUE AND DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN CONFIRMING THE ADDITION. IT IS NOT IN DISPUTE THAT THE AMOUNT OF RS.7,94,320 WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IN TH E ASSESSMENT YEAR UNDER ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 12 APPEAL. THE SAME WERE CASH DEPOSITS. THIS FACT IS ALSO CONFIRMED BY THE BANK IN THEIR STATEMENT. THE LD.COUNSEL FOR THE ASSESSE E ALSO DID NOT DISPUTE THAT THE CASH AMOUNTS WERE DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEALS. THE ASSESSEE HAS, H OWEVER, TRIED TO EXPLAIN THAT THE ABOVE DEPOSITS IN THE BANK ACCOUNT WERE MA DE OUT OF THE SALE PROCEEDS OF BISCUIT AND CONFECTIONERY BUSINESS AND ON REALIZ ATION OF THE DEBTS BY DHRUV SALES CORPORATION. THE ASSESSEE FILED COPY OF THE BANK PASSBOOK, PURCHASES AND SALES IN SUPPORT OF THE CONTENTION. HOWEVER, I T IS A FACT THAT THE SAID BUSINESS WAS NEVER DISCLOSED TO THE REVENUE DEPARTM ENT PRIOR TO THE SURVEY. THE ASSESSEE ADMITTED THAT SINCE THERE WAS NO PROFI T IN THE BUSINESS OF BISCUITS AND CONFECTIONERY, IT WAS NOT SHOWN IN THE RETURN O F INCOME FILED FOR THE ASSESSMENT YEAR UNDER APPEAL. THE AUTHENTICITY OF THE BUSINESS CONDUCTED BY DHRUV SALES CORPORATION THUS COULD NOT BE ESTABLISH ED BEYOND DOUBT BEFORE THE AUTHORITIES BELOW. SINCE THE ENTIRE BUSINESS OF BI SCUITS AND CONFECTIONERY REMAINED UNDISCLOSED TO THE REVENUE DEPARTMENT, THE TRANSACTIONS RECORDED THEREIN CANNOT BE BELIEVED AND THE AUTHORITIES BELO W HAVE RIGHTLY REJECTED THE SAME CONTENTION OF THE ASSESSEE. IT MAY ALSO BE NO TED HERE THAT SPECIFIC DATES HAVE BEEN GIVEN FOR DEPOSITING CASH IN THE BANK ACC OUNT OF THE ASSESSEE. THEREFORE, ASSESSEE SHALL HAVE TO PROVE THROUGH SPE CIFIC EVIDENCE THAT CASH WAS AVAILABLE TO THE ASSESSEE FOR MAKING THE DEPOSIT IN THE BANK ACCOUNT. IN THE ABSENCE OF ANY EVIDENCE AND THE SOURCE AND AVAILABI LITY OF THE CASH WITH THE ASSESSEE AND ITS NEXUS WITH THE DEPOSITS IN THE BAN K ACCOUNT OF THE ASSESSEE, THE CONTENTION OF THE ASSESSEE REMAINED ORAL EXPLAN ATION WHICH HAS BEEN RIGHTLY REJECTED BY THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY EVIDENCE OF SOURCE AND AVAILABILITY OF THE CASH WITH THE ASSESSEE AND THAT TOO, WHEN DHRUV SALES CORPORATION WAS RUNNING IN LOSSES, THE EXPLANATION OF THE ASSESSEE WAS RIGHTLY REJECTED BY THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY REASONABLE AND COGENT EVIDENCE ON RECORD, WE DO NOT FIND IT TO BE A FIT C ASE FOR INTERFERENCE. WE ACCORDINGLY DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN CONFIRMING THE ADDITION. MERELY BECAUSE PROTECTIVE ASSESSMENT IS MADE IN ASSESSMENT YEAR 1997-98 WE DO NOT FIND ANY JUSTIFICATION TO GIVE AN Y BENEFIT TO THE ASSESSEE ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 13 PARTICULARLY WHEN ASSESSEE HAS NOT PRODUCED ANY EVI DENCE IN SUPPORT OF THE CONTENTION. WE, THEREFORE, DO NOT FIND ANY MERIT I N BOTH THE GROUNDS OF THE ASSESSEE. BOTH ARE ACCORDINGLY DISMISSED. 8.3 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ITA NO.3373/AHD/2007 (AY 1997-98) 9. ON GROUND NO.1 ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT U/S 147 OF THE I.T. ACT AND ON GROUND NO.2 ASSESSEE CHALLENGED ADDITION OF RS.4.25 LAKHS. SINCE BOTH THE GROUNDS ARE CONNECTE D, BOTH ARE DECIDED TOGETHER. AS NOTED ABOVE SURVEY WAS CONDUCTED IN T HE PREMISES OF THE ASSESSEE AND ASSESSEE HAD ADMITTED UNACCOUNTED INCOME WHICH INCLUDES UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT. THEREFORE, CONSI DERING EXPLANATION OF THE ASSESSEE AND MATERIAL ON RECORD IT WAS FOUND ON THE BASIS OF ASSESSEES OWN SUBMISSION THAT AMOUNT OF RS.4.25 LAKHS WAS SOUGHT TO BE TAXED IN THE ASSESSMENT YEAR UNDER APPEAL ON PROTECTIVE BASIS. THE ASSESSEES CASE WAS ACCORDINGLY REOPENED U/S 147 OF THE I.T. ACT IT WA S OBSERVED DURING THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2001-02 THAT ASSESSEE CLAIMED TO HAVE INTRODUCED INITIAL CAPITAL OF RS.4.25 LAKHS IN DHRUV SALES IN ASSESSMENT YEAR 1997-98. THE ASSESSING OFFICER, THEREFORE, NOTED T HAT THERE IS A REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS.4.25 LAKHS HAD ESCA PED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T ACT AND NOTICE U/ S 148 DATED 23-04-2004 WAS SERVED UPON THE ASSESSEE ON 24-03-2004. THE ASSESS EE EXPLAINED THAT THE RETURN FILED ORIGINALLY MAY BE TREATED AS RETURN FI LED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE CAPITAL DESPITE GIVING SEVERAL OP PORTUNITIES. SAME WAS TREATED AS UNEXPLAINED CASH CREDIT ON PROTECTIVE BASIS BECA USE SUBSTANTIVE ADDITION IS MADE IN ASSESSMENT YEAR 2000-01. THE LD.CIT(A) CON SIDERING FACTS OF THE CASE AND FINDING THAT INCOME ESCAPED ASSESSMENT IN A SUM OF RS.4.25 LAKHS, CONFIRMED THE REOPENING OF THE ASSESSMENT. AS REGA RDS THE PROTECTIVE ASSESSMENT IT WAS CONTENDED BEFORE THE LD.CIT(A) TH AT PROTECTIVE ASSESSMENT ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 14 NEEDS TO BE CANCELLED AS SOON AS THE SUBSTANTIVE AD DITION IS CONFIRMED IN ASSESSMENT YEAR 2000-01 AND THEREFORE, PROTECTIVE A SSESSMENT MAY BE CANCELLED. THE LD.CIT(A), HOWEVER, CONSIDERING THE SUBMISSIONS OF THE ASSESSEE NOTED THAT FINDINGS GIVEN BY THE ASSESSING OFFICER FROM PARAGRAPHS 5.4 TO 5.9 OF THE ASSESSMENT ORDER HAVE NOT BEEN REBUTTED BY THE ASSESSEE. IT WAS ALSO EXPLAINED THAT SINCE SUBSTANTIVE ADDITION IS MADE O F RS.7,94,320 IN ASSESSMENT YEAR 2000-01 AS PER EXPLANATION OF THE ASSESSEE WIT H REGARD TO UNEXPLAINED BANK DEPOSITS, PROTECTIVE ADDITION MAY BE DELETED. THE LD.CIT(A), HOWEVER, NOTED THAT INTRODUCTION OF CAPITAL OF RS.4.25 LAKHS WAS MADE IN THE MONTH OF DECEMBER, 1996 AS PER THE BOOKS OF ACCOUNT OF DHRUV SALES CORPORATION AND THE SOURCE OF THE SAME BEING AGRICULTURAL INCOME OF FAT HER OF THE ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE. THEREFORE, ASSESSEE FAI LED TO EXPLAIN THE SOURCE AND AS SUCH THE AMOUNT IS REQUIRED TO BE TAXED ON S UBSTANTIVE BASIS IN THE ASSESSMENT YEAR UNDER APPEAL. THE LD.CIT(A) ALSO N OTED THAT NO NEXUS IS ESTABLISHED BETWEEN THE SUM OF RS.4.25 LAKHS AND AD DITION OF RS.7,94,320 FOR WHICH ADDITION IS MADE IN SUBSEQUENT ASSESSMENT YEA R 2000-01. THEREFORE, ASSESSING OFFICER WAS DIRECTED TO MAKE ADDITION OF RS.4.25 LAKHS ON SUBSTANTIVE BASIS. APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISM ISSED. 9.1 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT REOPENING IS M ADE IN THE CASE OF ASSESSEE AFTER SIX YEARS FROM THE END OF THE RELEVANT ASSESS MENT YEAR. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE B EFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE EXPLAINED THE SOURCE OF THE CAPITAL INTRODUCTION BECAUSE THE ASSESSEE WAS DOING THE BUSINESS EVEN PRIOR TO S TARTING OF THE BUSINESS IN THE NAME OF DHRUV SALES CORPORATION. LEARNED COUNSEL F OR THE ASSESSEE ALSO SUBMITTED THAT SINCE SUBSTANTIVE ASSESSMENT IS MADE OF UNEXPLAINED BANK DEPOSITS IN EARLIER YEAR, BENEFIT OF TELESCOPING MA Y BE GIVEN TO THE ASSESSEE. ON THE OTHER HAND, LD.DR RELIED UPON THE ORDERS OF AUT HORITIES BELOW AND SUBMITTED THAT THE REOPENING IS MADE PRIOR TO SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THEREFORE, CONTENTION OF THE ASSES SEE IS LIABLE TO BE REJECTED. ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 15 LD.DR, ON MERITS, RELIED UPON THE ORDERS OF AUTHORI TIES BELOW AND ALSO SUBMITTED THAT HERE IS NO NEXUS BETWEEN ADDITION MADE IN THE SUBSEQUENT YEAR ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS WITH THE ADDITION MADE IN THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, LDCIT(A) RIGHTLY CONVERTE D THE PROTECTIVE ASSESSMENT INTO SUBSTANTIVE ASSESSMENT. 9.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER SPECIFICALLY NOTED A T PARAGRAPHS 5.4 TO 5.9 OF THE ASSESSMENT ORDER THAT ASSESSEE BROUGHT CASH OF RS.4 .25 LAKHS IN HIS CAPITAL ACCOUNT ON VARIOUS DATES IN THE MONTH OF DECEMBER, 1996. THE ASSESSEE, HOWEVER, COULD NOT EXPLAIN THE SOURCE OF THE SAME D ESPITE GIVING SEVERAL OPPORTUNITIES BY THE ASSESSING OFFICER. ASSESSING OFFICER, THEREFORE, TREATED THE SAME AMOUNT TO BE UNEXPLAINED CASH CREDIT AND MADE THE PROTECTIVE ASSESSMENT BECAUSE OF THE SUBSTANTIVE ADDITION MADE IN ASSESSM ENT YEAR 2000-01. THE LD.CIT(A) THEREFORE, CORRECTLY NOTED THAT THE FINDI NGS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAVE NOT BEEN REBUTTED BY THE ASSE SSEE THROUGH ANY EVIDENCE BEFORE HIM. SAME IS THE POSITION BEFORE THE TRIBUN AL ALSO BECAUSE THE LEARNED COUNSEL FOR THE ASSESSEE EXCEPT MAKING ORAL SUBMISS IONS TO EXPLAIN INTRODUCTION OF THE CAPITAL BY THE ASSESSEE, HAS NOT FURNISHED A NY DOCUMENTARY EVIDENCE OR MATERIAL ON RECORD. LEARNED CIT(A) ALSO NOTED THAT THE ASSESSEE BEFORE HIM EXPLAINED THE SOURCE OF INTRODUCTION OF CAPITAL BEI NG OUT OF AGRICULTURAL INCOME OF FATHER OF THE ASSESSEE BUT SAME IS ALSO NOT SUPPORT ED BY ANY EVIDENCE. THIS FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW W OULD CLEARLY PROVE THAT ASSESSEE HAS FAILED TO EXPLAIN THE INTRODUCTION OF THE CAPITAL THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. SINCE INTRODUCTION OF THE AMOUNT IN THE BOOKS OF THE ASSESSEE REMAINED UNEXPLAINED THROUGH OUT, IT W AS RIGHTLY TREATED AS UNEXPLAINED CASH CREDIT OF RS.4.25 LAKHS IN THE CAP ITAL ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER MADE PROTECTIVE ASSESSMENT BE CAUSE SUBSTANTIVE ASSESSMENT IS MADE FOR THE ASSESSMENT YEAR 2000-01. THE LD.CIT(A), HOWEVER, ON PROPER APPRECIATION OF FACTS AND MATERIAL ON REC ORD RIGHTLY NOTED THAT IN THE ASSESSMENT YEAR 2000-01 SUBSTANTIVE ADDITION IS MAD E OF RS.7,94,320 ON ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 16 ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACC OUNT. THEREFORE, THE SAID ADDITION MADE IN ASSESSMENT YEAR 2000-01 HAS NO NEX US WITH ADDITION OF RS.4.25 LAKHS IN THE ASSESSMENT YEAR UNDER APPEAL. MOREOVER, ADDITION OF RS.7,94,320 IS MADE IN THE SUBSEQUENT YEAR. THEREF ORE, NO BENEFIT EITHER ON TELESCOPING OR IN THE NAME OF PROTECTIVE / SUBSTANT IVE COULD BE GIVEN TO THE ASSESSEE. SINCE THIS ISSUE IS NOT EXPLAINED AT ALL THROUGH ANY EVIDENCE OR MATERIAL ON RECORD, LD.CIT(A) WAS JUSTIFIED IN MAKI NG THE ADDITION ON SUBSTANTIVE BASIS IN THE ASSESSMENT YEAR UNDER APPEAL. 9.3 WE MAY ALSO NOTE HERE THAT THE ASSESSING OFFICE R MADE PROTECTIVE ASSESSMENT IN THE ASSESSMENT YEAR UNDER APPEAL AND LD.CIT(A) CONVERTED THE ADDITION INTO SUBSTANTIVE ADDITION, THE ASSESSEE HA S NOT RAISED ANY GROUND OF APPEAL TO CHALLENGE THE ABOVE FINDINGS OF THE LDCIT (A) IN ANY OF THE GROUNDS OF APPEAL. IN THE ABSENCE OF ANY GROUND OF APPEAL CHA LLENGING THE ADDITION CONVERTED INTO SUBSTANTIVE ADDITION BY THE LD.CIT(A ), THE FINDING RECORDED BY THE LD.CIT(A) COULD NOT BE DISTURBED. WE THEREFORE, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDING OF THE LD.CIT(A) IN CONF IRMING THE SUBSTANTIVE ADDITION OF RS.4.25 LAKHS. 9.4 AS REGARDS REOPENING OF THE ASSESSMENT, THE ASS ESSING OFFICER SPECIFICALLY NOTED THAT NOTICE U/S 148 DATED 23-03-2004 WAS SERV ED ON 24-03-2004. SINCE THE AMOUNT OF ESCAPED INCOME IS MORE THAN RS.1 LAKH , THE REOPENING OF THE ASSESSMENT WOULD HAVE BEEN INITIATED BY ISSUE OF NO TICE U/S 148 OF THE I.T. ACT WITHIN SIX YEARS FROM THE END OF THE RELEVANT ASSES SMENT YEAR. THEREFORE, IN THIS CASE, THE REOPENING IS MADE WITHIN SIX ASSESSMENT Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. CONTENTION OF THE LEARNE D COUNSEL FOR THE ASSESSEE IN THIS REGARD IS THEREFORE REJECTED. LEARNED COUNSEL FOR THE ASSESSEE ALSO ARGUED THAT THE ASSESSING OFFICER FAILED TO RECORD REASONS FOR REOPENING OF THE ASSESSMENT. HOWEVER, THE ASSESSING OFFICER HAS SPE CIFICALLY NOTED IN THE ASSESSMENT ORDER THAT THE REASON TO BELIEVE THAT IN COME ESCAPED IN A SUM OF RS.4.25 LAKHS IN THE ASSESSMENT ORDER UNDER APPEAL WAS RECORDED BECAUSE OF ITA 1487/AHD/2008 ITA 3374/AHD/2007 ITA 3373/AHD/2007 17 THE FACTS FOUND DURING THE COURSE OF ASSESSMENT PRO CEEDINGS FOR ASSESSMENT YEAR 2001-02. THE ABOVE FACTS WOULD SHOW THAT ASSE SSING OFFICER HAS REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT WAS MORE THA N RS.1 LAKH IN THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSING OFFICE R, THEREFORE, WAS WELL WITHIN HIS RIGHTS IN INVOKING THE JURISDICTION U/S 147 / 1 48 OF THE I.T. ACT. NO MATERIAL IS PRODUCED BEFORE US TO CONTRADICT THE OBSERVATION OF THE ASSESSING OFFICER IN THIS REGARD. THE CONTENTION OF THE ASSESSEE IS THEREFOR E REJECTED THAT REOPENING IS BAD IN LAW. 9.5 CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES N OTED ABOVE WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. THE ASSESSING O FFICER HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 147 OF THE I.T. ACT AND ADDITION I S CORRECTLY MADE ON SUBSTANTIVE BASIS. THUS, ALL THE GROUNDS OF APPEAL OF THE ASSE SSEE ARE ACCORDINGLY REJECTED. 9.6 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. 10. IN VIEW OF THE ABOVE FINDINGS, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 07 TH DAY OF OCTOBER, 2010. SD/- SD/- (D.C. AGARWAL) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DT : 07 TH OCTOBER, 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-I, BARODA 4. THE CIT(A)-II, BARODA 5. THE DR, D BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, AHMEDABAD BENCH