M/s Ajit Ajay Estate & Resorts Pvt. Ltd. (Now known as 'M/s Ajit Club & Resorts Pvt. Ltd.), Indore V. The ITO 2(3), Indore

ITA 151/IND/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6044 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Depreciation; Reason to believe; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 147; 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER . . /. I.T.A. NO S . 151 & 152 /IND/201 3 [[ / ASSESSMENT YEAR : 1999 - 2000 & 2000 - 01 M/S. AJIT AJAY ESTATE & RESORTS PVT.LTD., (NOW KNOWN AS M/S. AJIT CLUB & RESORTS PVT.LTD., SECTOR - A, BAKHTAWAR RAM NAGAR, INDORE. VS. INCOME - TAX OFFICER, 2(3), INDORE. / APPELLANT / RESPONDENT . . ./ PAN: AAECA0582A / APPELLANT BY : SHRI ANIL KAMAL GARG AND SHRI ARPIT GAUR, CAS / RESPONDENT BY : SHRI K. G. GOYAL, SR. DR / DATE OF HEARING : 05 .0 6 .2018. / DATE OF PRONOUNCEMENT : 07 .0 6 .2018 M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 2 : - / O R D E R PER KUL BHARAT , J.M. : THESE TWO APPEALS FILED BY THE ASSESSEE PERTAINING TO ASSESSMENT YEARS 1999 - 2000 AND 2000 - 01.SINCE IDENTICAL GROUNDS HAVE BEEN RAISED, BOTH THE APPEALS WERE TAKEN UP TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 2 . FIRST, WE WILL TAKE I.T.A.NO. 151/IND/2013 FOR ASSESSMENT YEAR 1999 - 2000. 3 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : - 1 . (A) THAT, ON THE FACTS AND UNDER THE CIRCUMSTA NCES OF THE CASE, THE LEARNED CI T(A) GROSSLY ERRED IN LAW IN UPHOLDING THE VALIDITY OF ISSUANCE OF NOTICE U/S. 148 AND INITIATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE INCOME - TAX ACT, 1961. (B) THAT, THE LEARNED CIT(A) GROSSLY ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT BY GIVING AN ERRONEOUS FINDING THAT THE APPELLANT M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 3 : - FAILED TO RAISE ANY OBJECTION AGAINST THE REOPENING AT THE APPELLATE STAGE. 2 . THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN SUSTAINING ADDITION TO THE EXTENT OF RS. 1 ,02,97,300/ - OUT OF THE ADDITION OF RS. 1 ,14,49, 5 OO/ - MADE BY THE LEARNED AO UNDER THE HEAD 'ADVANCE MONEY FOR PLOT AT SHELL CITY', BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961. 3 . THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING ADDITION OF RS.10,00,000 / - MADE BY THE LEARNED AO IN THE NAME OF 'SUNNY CO - OPERATIVE HOUSING SOCIETY', BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961, WITHOUT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT WAS NOT REQUIRED TO ESTABLISH SOURCE OF THE SOURCE. 4 . THAT , THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.1,00,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY IN THE NAME OF SHRI PREMCHAND BORASI WITHOUT CONSIDERING AND APPRECIATING THE MATERIA L FACT THAT THE APPELLANT M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 4 : - HAD PROVED THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHARE APPLICANT BEYOND ALL DOUBTS BY SUBMITTING ALL DOCUMENTARY EVIDENCES. 4 . BRIEFLY STATED, THE FACTS ARE THAT THE CASE O F THE ASSESSEE WAS REOPENED AND THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DATED 30.03.2004. WHILE FRAMING THE ASSESSMENT, THE AO MADE ADDITION OF RS. 1,14,49,500/ - IN RESPECT OF ADVANCE MONEY FOR PLOT AT SHELL CITY , RS. 1,50,000/ - ON ACCOUNT OF CREDIT IN THE NAME OF M/S. SUNNY BUILDERS PRIVATE LIMITED, RS. 10 LAKHS ON ACCOUNT OF CREDIT IN THE NAME OF SUNNY CO - OPERATIVE HOUSING SOCIETY AND ALSO ADDITION ON ACCOUNT OF UNPROVED SHARE APPLICATION OF RS. 1 LAKH IN THE NAME OF SHRI PREMCHAND BORASI. AG GRIEVED BY THIS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO SUSTAINED THE FINDING OF THE AO. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 5 : - 5 . AT THE OUT - SET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT FRAMED SUFFERS FR OM ILLEGALITY AS AGAINST THE REASONS RECORDED FOR REOPENING. THE ASSESSEE HAS RAISED OBJECTION WHICH HAS NOT BEEN DISPOSED OF BY THE AO. HE SUBMITTED THAT EVEN THERE IS NO WHISPER IN THE ASSESSMENT ORDER ABOUT REASONS RECORDED AND THE OBJECTION RAISED BY THE ASSESSEE. HE SUBMIT TED THAT THE AO WAS REQUIRED TO DISPOSE OF THE OBJECTION BY WAY OF SEPARATE ORDER IN THE LIGHT OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GK N DRIVE SHAFTS (INDIA) LIMITED VS. ITO AND OTH E RS, (2003) 259 ITR 19 (S.C.) 6 . ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVE OPPOSED THE SUBMISSIONS. 7 . IN THE REJOINDER, THE LD. COUNSEL FOR THE ASSESSEE HAS TAKEN US THROUGH THE REASONS RECORDED AND THE OBJECTIONS RAISED BY THE ASSESSEE, WHICH IS ENCLOSED IN THE PAPER BOOK FILED BY THE ASSESSEE. WE ARE REPRODUCING BELOW THE M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 6 : - REASONS RECORDED BY THE ITO, 2(3), INDORE, AND OBJECTIONS RAISED BY THE ASSESSEE FOR THE SAKE OF CLARIFY : - REASONS RECORDED BY ITO, 2(3), INDORE DATED 31.03.03 : DURING THE ASSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR 2000 - 01, THE ASSESSEE VIDE LETTER DATED 29.11.2002 FURNISHED THE DETAILS OF THE DEPOSITS OF RS. 1,75,43,719/ - FROM THE MEMBERS OF THE SHELL CITY ON ACCOUNT OF ADVANCES AGAINST THE PROPOSED SALE OF PLOTS IN SHELL CITY. OUT OF RS. 1,75,43,719 / - TH E RE WAS A DEPOSIT OF RS. 1,14,49,500/ - DURING PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1999 - 2000. THE ASSESSEE WAS ASKED TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS OF TRANSACTIONS IN RESPECT OF AFORESAID DEPOSIT. THE ASSESSEE FURNISHED THE PHOT OCOPIES OF THE APPLICATIONS FROM THE MEMBERS FOR THE ALLOTMENT OF MEMBERSHIP AND PLOT IN SHELL CITY. THE ASSESSEE FURNISHED THE COPIES OF ACCOUNTS OF MEMBERS AS APPEARING IN ACCOUNT BOOKS OF THE ASSESSEE FOR THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 9 9 - 00. ON PERUSAL OF THE COPIES OF THE A/C OF THE MEMBERS IT WAS NOTICED THAT THERE WERE DEPOSITS OF RS. 1,00,00,000/ - OR SO IN THE NAME OF FOLLOWING MEMBERS : - 1. ASHOK KASHYAP RS. 1,00,000/ - VIDE APPLICATION DT NIL 2. ANIL KUMAR CHANDRATRA RS. 1,00 , 000/ - - DO - 3. BANVEER CHAUDHARY RS. 1,00,000/ - - DO - 4. BHARAT BORASI RS. 1,00 , 000 / - - DO - 5. DILIP BORASI RS. 1,00,000/ - - DO - 6. GAURISHANKER BORASI RS. 1,00,000/ - - DO - M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 7 : - 7. JITENDRA BORASI RS. 1,00,000/ - - DO - 8. SMT. KAUSHALYABAI RS. 1,00,000/ - - DO - 9. SMT. MEENA BAI RS. 1,00,000/ - - DO - 10. MAHENDRA KADAM RS. 1,00,000/ - - DO - 11. MUKESH VYAS RS. 1,00,000/ - - DO - 12. MANJU KARDA RS. 1, 19,500 / - - DO - 13. M.L.SRIVASTAVA RS. 1,00,000/ - - DO - 14. NAND LAL BORASI RS. 1,00,000/ - - DO - 15. PRAKASH DHANAK RS. 1,00,000/ - - DO - 16. RAJESH MAHESHWARI RS. 1,00,000/ - - DO - 17. RAJESH AGRAWAL RS. 1,00,000/ - - DO - 18. RAJENDRA BORASI RS. 1,00,000/ - - DO - 19. RANVEER CHOUDHARY RS. 1,00,000/ - - DO - 20. SMT. ROOPA BAI RS. 1,00,000/ - - DO - - RS. 1,00,000/ - - DO - 22. SALIM KOKKAR RS. 1,00,000/ - - DO - 23. SURYA KANTA GUPTA RS. 1,00,000/ - - DO - 24. VIJAY PRADHAN RS. 1,00,000/ - - DO - 25. VISHABHNATH BORASI RS. 1,00,000/ - - DO - 26. MULTAN SINGH RS. 1,00,000/ - COPY OF APPLICATION NOT FURNISHED 27. NARESH PARMAR RS. 1,00,000/ - - DO - 28. NIRAJ PARMAR RS. 1,00,000/ - - DO - 29. ANIRUDH GUPTA RS. 1,00,000/ - - DO - 30. DINESH BORASI RS. 1,00,000/ - - DO - 31. GULAB CHOUDHARY RS. 1,00,000/ - - DO - 32. GOVIND RAM MITTAL RS. 1,00,000/ - - DO - 33. VISHAL PARMAR RS. 1,00,000/ - - DO - TOTAL RS. 33,19,500/ - ON PERUSAL OF COPIES OF APPLICATIONS IT WAS NOTICED THAT COLUMNS MEANT FOR DATE OF DEPOSIT, AMOUNT OF DEPOSITS AND NAME OF FATHER WERE BLANK. IN ADDITIONS TO ABOVE, THE ASSESSEE ALSO SHOWN THE DEPOSIT OF RS. 81,30,000/ - FROM THE OTHER MEMBERS FOR ALLOTMENT OF MEMBERSHIP AND PLOTS. THE ASSESSEE FURNISHED ONLY PHOTO COPIES OF THE APPLICATIONS, BUT DID NOT FURNISH ANY SUPPORTING M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 8 : - EVIDENCES TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS ,OF THE TRANSACTIONS IN RESPECT OF AFO RESAID DEPOSITS. THUS, THE ASSESSEE PRIMA FACIE FAILED TO PROVE THE IDENTITY AND CAPACITY TO ADVANCE THE AMOUNT OF CREDIT AND GENUINENESS OF THE TRANSACTIONS CUMULATIVELY AS REQUIRED U/S 68 OF THE ACT. THEREFORE, THE INCOME OF RS. 1,14,49,500/ - ESCAPED INCOME WITHIN THE MEANING OF SECTION 148 OF THE ACT. THE ASSESSEE ALSO SHOWN THE CREDIT OF R S. 5,00,000/ - EACH ON 29.9.98 AND 5.10.98 IN THE NAME OF SUNNY COOP HOUSING SOCIETY LIMITED BUT FAILED TO PRODUCE AFORESAID PERSON FOR EXAMINATION AND TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS OF TRANSACTIONS. THUS, THE ASSESSEE FAILED TO PROVE THE IDENTITY AND CAPACITY (TO ADVANCE THE AMOUNT OF CREDITS) AND GENUINENESS OF TRANSACTION IN RESPECT OF AFORESAID CREDIT OF RS. 10,00,000/ - CUMULATIVELY AS REQUIRED U/S 68 OF THE ACT. THEREFORE, INCOME OF RS. 10,00,000/ - ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 148 OF THE ACT. ISSUE NOTICE U/S 148 OF THE ACT. THE ASSESSEE VIDE LETTER DATED 27.12.02 SHOWN THE DEPOSIT OF SHARE APPLICATIONS MONEY AT RS. 1,00,000/ - IN THE NAME OF SHRI PREMCHAND BORASI. THE ASSESSEE WAS ASKED TO PROVE THE IDENTITY, CAPACI TY AND GENUINENESS OF THE TRANSACTIONS . THEREFORE, INCOME OF RS. 1,00,000/ - M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 9 : - ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 148 OF THE ACT. IN VIEW OF THE ABOVE INCOME OF RS. 1,35,49,500 ( RS. 1,14,49,500/ - + 10,00,000/ - + 1,00,000/ - ) ESCAPED ASSESSMENT WITHIN MEANING OF SECTION 148 OF THE ACT. ISSUE NOTICE U/S 148 OF ACT. SD/ - ITO 2(3) INDORE. OBJECTIONS RAISED BY THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE BEFORE THE ITO WD.2(3), INDORE VIDE LETTER DATED 22.10.2003 SUB : OBJECTION TO THE ISSUE OF NOTICE U/S 148 ON THE BASIS OF REASON RECORDED A.Y. 1999 - 2000 . WE HEREBY OBJECT TO THE ACTION OF THE AO IN ISSUING NOTICE U/S 148 OF THE INCOME - TAX ACT, 1961, ON FOLLOWING GROUNDS: - 1 . THAT THE ACTION OF THE AO IS WITHOUT JURISDICTION. AS PER SECTION 14 7 IF THE AO HAS REASON TO BELIEVE HE CAN INVOKE THE SECTION, AS REASON TO BELIEVE ARE STRONGER THAN THE SATISFACTION OF AO. THE POWER OF AO ARE NOT UNBRIDLED ONE. AND IT CANNOT BE MECHANICAL REOPENING OF THE ASSESSMENT. M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 10 : - 1 . 1 THE ASSESSEE HAS RECEIV ED RS. 1,14,49,500/ - DURING PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1999 - 2000 FROM THE BOOKING OF PLOTS AT ITS REAL ESTATE PROJECT. THE COMPLETE LIST OF APPLICANT, PHOTOCOPY OF APPLICATIONS, COPY OF ACCOUNTS OF EACH MEMBER IS ALREADY IN THE DEPARTMENT RE CORDS. DURING THE ASSESSMENT PROCEEDING OF ASSESSMENT YEAR 2000 - 2001 IT WAS SUBMITTED BEFORE THE AO THAT THE ASSESSEE IS HAVING BUSINESS OF THE REAL ESTATE DEVELOPMENT. IT IS DEVELOPING REAL ESTATE AT SHELL CITY. IT IS IN THE PROCESS OF DEVELOPING PLOTS FO R RESIDENTIAL PURPOSE WITH MODERN FACILITIES. IT HAS ADVERTISED WIDELY AND MARKETED ITS PROJECT THROUGH VARIOUS CHANNELS TO THE PUBLIC AT LARGE AND INVITED APPLICATION FOR ALLOTMENT AND THEREFOR E SALE OF PLOTS TO PROSPECTIVE CUSTOMERS IN NEED OF A RESIDENTIAL PLOTS. IT HAS ALSO FORMULATED SCHEME FOR PAYMENT OF BOOKING AMOUNT IN INSTALMENTS OVER 3 TO 5 YEARS. AN ON COMPLETION OF THE DEVELOPMENT SALE AND POSSESSION OF THE PLOT OF THE PROSPECTIVE CUS TOMERS. M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 11 : - 1 . 2 WITH AGGRESSIVE MARKETING STRATEGIES THE ASSESSEE WAS ABLE TO ATTRACT APPRX. 250 PROSPECTIVE CUSTOMERS WHO BOOKED THE PLOT AT SHELL CITY. ALL THE CUSTOMERS HAVE ,OPTED FOR PAYMENT IN INSTALMENTS SPREAD OVER 3 TO 5 YEARS. THE SALE TRANSACTION WAS T O COMPLETE AFTER THE PAYMENT OF THE SALE CONSIDERATION, REGISTRY OF PLOT AND HANDING OVER THE POSSESSION TO THE CUSTOMERS. IT WAS ALSO SUBMITTED THAT THESE CREDIT ARE NOT COVERED BY THE SECTION 68 OF THE INCOME - TAX ACT, 1961,. IT WAS FURTHER SUBMITTED THA T THE CUSTOMER HAVE BEEN ATTRACTED FOR BOOKING OF PLOTS THROUGH ADVERTISEMENT AND OTHER MODES OF MARKETING FROM PUBLIC AT LARGE AND IT WOULD NOT BE OUT OF PLACE TO MENTION THAT ONE HAS TO KEEP IN MIND THE LEGAL MAXIM LEXNON COJIT AD IMPOSSIBIDIA WHICH MEAN S THE LAW DOES NOT COMPEL A MAN TO DO THAT WHICH HE CAN NOT POSSIBLY PERFORM. 1 . 3 IF A PERSON GOES TO SHOP AND HAVE A BUYS A PRODUCT, THE SHOPKEEPER IS ONLY CONCERNED ABOUT HIS PAYMENT OF THE PRODUCT AND NOTHING ELSE. WE HAVE ALSO SOLD OUR PRODUCT I.E. PLOTS TO M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 12 : - OUR CUSTOMERS WHO ARE PAYING IN INSTALMENTS. THEREFORE, IT WAS URGED THAT NECESSARY ENQUIRY MAY BE DIRECTLY MADE FROM THE CUSTOMER. THE AO CONDUCTED HIS ENQUIRY THROUGH INSPECTOR FROM FEW CUSTOMERS WHO CONFIRMED THE TRANSACTION. WE HAVE ALSO REQUESTED THAT ALL SURROUNDING CIRCUMSTANCES AND OBJECTIVE FACTS MAY BE CONSIDERED ON COMMON HUMAN, EXPERIENCE IN LIFE AND REASONABLE CONCLUSION NOT ON THE BASIS OF SUSPI CION OR PROBABILITIES BE DRAWN. 1 . 4 THEREFORE, THE ACTION OF THE AO ON ABOVE GROUND IS ARBITRARY, UNJUSTIFIED, ILLEGAL AND BIASED. 2 . THAT THE ONLY INFORMATION ON THE BASIS OF WHICH REOPENING WAS DONE ARE LIST OF PLOT HOLDERS (CUSTOMERS), THEIR APPLICATIONS AND COPY OF ACCOUNTS. THE ITO HAD NOT MADE ANY INVESTIGATION FROM THE CUSTOMERS DESPIT E REQUESTED BY THE ASSESSEE AND THEREFORE THERE IS NO REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND IT HAS BEEN HELD THAT SUSPICION IS NOT BELIEF. M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 13 : - 3 . THAT THE BELIEF ENTERTAINED BY THE AO IS ARBITRARY OR IRRATIONAL THERE IS NO RATIONAL ARE IN TELLIGIBLE NEXUS BETWEEN THE REASON AND THE BELIEF. 4 . THAT ASSESSEE HAS RECEIVED RS. 5.00 LAKHS FROM SUNNY COOPERATIVE HOUSING S OCIETY L TD. DURING THE ASSESSMENT PROCEEDINGS OF ASSESSMENT YEAR 2000 - 2001 THE ASSESSEE SUBMITTED CONFIRMATION AND COPY OF BANK ACCOUNTS OF THE CREDITOR AND THE TRANSACTION STANDS PROVED, THEREFORE, REOPENING ON THIS GROUND IS ERRONEOUS AND ILLEGAL. 5 . THAT THE ASSESSEE HAD RECEIVED THE SHARE APPLICATION MONEY OF RS. 1.00 LAC, FROM MR. PREMCHAND BORASI. THE ASSESSEE HAD SUBMITTED THE COPY OF SHARE APPLICATION AND BANK ACCOUNT. IT WAS ALSO SUBMITTED THAT ISSUE OF SHARE ARE NOT COVERED BY SECTION 68 AS HELD BY VARIOUS COUR TS. IT WAS SUBMITTED THAT HE IS SITTING MLA STILL THE AO DOUBTING THE IDENTITY OF HIM THEREFORE THIS GROUND OF REOPENING IS ARBITRARY, BIASED AND ILLEGAL. IN VIEW OF ABOVE, WE HAVE STRONG OBJECTION TO THE ACTION OF THE AO IN CONCLUDING THAT INCOME HAS E SCAPED ASSESSMENT. M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 14 : - 8 . WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAD RAISED THE OBJECTION AGAINST REOPENING OF THE ASSESSMENT. THE AO WAS REQUIRED TO DISPOSE OF THOSE OBJECTIONS BEFORE FRAMING THE ASSESSMENT. WE, THEREFORE, DEEM IT PROPER TO SET - ASIDE THE ASSESSMENT ORDER AND RESTORE THE OBJECTION RAISED BY THE ASSESSEE TO THE FILE OF ASSESSING OFFICER TO BE DISPOSED OF . THE AO THEREAFTER WOULD FRAME THE ASSESSMENT DE NOVO, IF HE DOES NOT ACCEPT THE OBJECTION RAISED BY THE ASSESSEE. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10 . IN I.T.A.NO. 152/IND/2013 FOR THE ASSESSMENT YEAR 2000 - 01, THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE . 1 . THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS. 1,80,000/ - MADE BY THE ASSESSING OFFICER OUT OF DISALLOWANCE OF M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 15 : - 'DIRECTORS REMUNERATION'. 2 . THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN SUSTAINING ADDITION TO THE EXTENT OF RS.45,02,014/ - OUT OF THE ADDITION OF RS.60,94,214/ - MADE BY THE LEARNED AO UNDER THE HEAD 'ADVANCE MONEY FOR PLOT AT SHELL CI TY', BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961. 3 . THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS. 10,00,000/ - MADE BY THE LEARNED AO ON ACCOUNT OF ADVANCE FR OM SUNNY CO - OPERATIVE HOUSING SOCIETY BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961. 4 . THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.2,00,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY IN THE NAME OF SHRI PREMCHAND BORASI WITHOUT CONSIDERING AND APPRECIATING THE MATERIAL FACT THAT THE APPELLANT HAD PROVED THE IDENTITY OF THE SHARE APPLICANTS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE SHARE APPLIC ANTS BEYOND ALL DOUBTS BY SUBMITTING ALL DOCUMENTARY EVIDENCES. 5 . THAT, THE LEARNED CIT(A) ERRED, IN CONFIRMING ADDITION OF M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 16 : - RS.48,350/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF 'FOREIGN TRAVELING EXPENSES'. 6 . THAT, THE LEARNED CIT(A) ERRED, IN CONFIRMING ADDITION OF RS.10,000/ - MADE BY THE ASSESSING OFFICER, ON AD - HOC BASIS, BY ESTIMATING THE CLOSING STOCK OF THE RESTAURANT. 7 . THAT, THE LEARNED CIT(A) ERRED, IN NOT ALLOWING THE CLAIM OF THE APPELLANT IN RESPECT OF UNABSORBED DEPRECIATION AND DEPRECIATION ON HOTEL BUILDING. 11 . T HE LD. COUNSEL FOR THE ASSESSEE HAS ADOPTED THE SAME ARGUMENTS AS TAKEN IN I.T.A.NO. 151/IND/2013 FOR THE ASSESSMENT YEAR 1999 - 2000. HE SUBMITTED THAT IN THIS APPEAL ALSO THE ASSESSMENT FRAM ED SUFFERS FROM ILLEGALITY AS AGAINST THE REASONS RECORDED FOR REOPENING. THE ASSESSEE HAS RAISED OBJECTION WHICH HAS NOT BEEN DISPOSED OF BY THE AO. HE SUBMITTED THAT THE AO WAS REQUIRED TO DISPOSE OF THE OBJECTION BY WAY OF SEPARATE ORDER IN THE LIGHT O F THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 17 : - CASE OF GKN DRIVESHAFTS (INDIA) LIMITED VS. ITO AND OTHERS, (2003) 259 ITR 19 (S.C.) 12 . WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS APPEAL ALSO, THE ASSESSEE HAD RAISED THE OBJECTION S AGAINST REOPENING OF THE ASSESSMENT AND THE ASSESSING OFFICER WAS REQUIRED TO DISPOSE OF THOSE OBJECTIONS BEFORE FRAMING THE ASSESSMENT. WE, THEREFORE, DEEM IT PROPER TO SET - ASIDE THE ASSESSMENT ORDER AND RESTORE THE OBJECTION RAISED BY THE ASSESSEE TO THE FILE OF ASSESSING OFFICER TO BE DISPOSED OF. THE AO THEREAFTER WOULD FRAME THE ASSESSMENT DE NOVO, IF HE DOES NOT ACCEPT THE OBJECTION RAISED BY THE ASSESSEE. 13 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14 . CONSEQUENTLY, BOTH THE APPEALS FILED BY THE ASSESSEE IN I.T.A.NOS. 151 & 152/IND/2013 FOR THE ASSESSMENT YEARS M/S AJIT AJAY ESTATE & RESORTS P.LTD., INDORE - : 18 : - 1999 - 2000 AND 2000 - 01 ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 . 0 6 .2018 . S D / - ( ) S D / - ( ) (MANISH BORAD) (KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 0 7 /0 6 /2018 CPU * / SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUARD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE