The ITO,S.K. Ward-1, Himatnagar V. Shri Bhikhusinh Laxmansinh Vaghwla, Sabarkantha

ITA 1559/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60208 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 12-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Assessee Lawyers: U S BHATI
• Keywords: Unexplained investment; Corroborative evidences
• Section: 68; 148

Judgement Text

ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T.A. NO. 1559 /AHD/2010 (ASSESSMENT YEAR: 2003- 04 ) INCOME TAX OFFICER, S.K. WARD-1, 3 RD FLOOR, AMBALAL COMPLEX, BEHIND MEHTA PETROL PUMP, NR,.RAILWAY CROSSING, HIMATNAGAR-2437422 (APPELLANT) VS. SHREE BHIKUSINH LAXMANSINH VAGHELA, C/O. VARUDI ENTERPRISE AT DOBHADA, TAL. VADALI, DIST. SABARKANTHA. (RESPONDENT) PAN: ACAPV 7381N APPELLANT BY : SHRI A. TIRKEY, SR. D.R. RESPONDENT BY : SHRI U.S. BHATI. ( )/ ORDER DATE OF HEARING : 7-3-2012. DATE OF PRONOUNCEMENT : 4-4-2012 PER: SHRI ANIL CHATURVEDI, A.M. THIS IS APPEAL IS FILE BY THE REVENUE AGAINST THE O RDER OF LD. CIT (A)-VI, AHMEDABAD DATED 13-1-2010 FOR ASSESSMENT YE AR 2003-04. ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 2 2 . THE EFFECTIVE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.13,01,640/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNEXPLAINED INVESTMENT AND RS.24,000/ - TOWARDS UNEXPLAINED HOUSE HOLD EXPENSES. 1.2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THOUGH THE ASSESSEE HAD PRODUCED THE PROOF OR PURCHASES OF ASSETS, THE SOUR CES OF PURCHASES REMAINED UNEXPLAINED. 3. THE ASSESSEE IS AN INDIVIDUAL HAVING SHARE INCOM E FROM PARTNERSHIP FIRMS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF VARUDI ENTERPRISE (A FIRM IN WHICH THE ASSESSEE IS A PARTNER) FOR ASSESSMENT YEAR 2003-04, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAD MADE INVESTMENT OF RS.4,01,640/- IN THE SAID FI RM. FURTHER, IN THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF ANO THER FIRM, M/S JAY VARUDI CONSTRUCTION CO. (A FIRM IN WHICH THE AS SESSEE IS A PARTNER) FOR ASSESSMENT YEAR 2003-04 IT WAS NOTICED BY THE A.O. THAT ASSESSEE HAD MADE ANOTHER INVESTMENT OF RS.10 LACS IN THE SAID FIRM. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF BOTH THE AFORESAID FIRMS, ACCORDING TO THE A.O., THE RESPECTIVE FIRMS COULD NOT PROVE THE GENUINENESS OF TRANSACTION AND SOURCE OF INVESTMENT OF FUNDS BY THE ASSESSEE AND ACCORDINGLY THE ASSESSMENT OF THE ASSE SSEE WAS REOPENED BY ISSUE OF NOTICE U/S 148 ON 23.4.2007 WH ICH WAS SERVED ON THE ASSESSEE ON 3.5.2007. THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME U/S. 139(1) FOR A.Y. 2003-04 NOR WAS ANY RET URN FURNISHED IN ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 3 RESPONSE TO NOTICE ISSUED U/S. 148. ACCORDINGLY, TH E A.O. FINALIZED THE ASSESSMENT ON MERITS U/S. 144 R.W.S. 147 OF THE I.T . ACT. 4. THE ASSESSEE WAS DIRECTED TO EXPLAIN THE SOURCE OF INVESTMENTS AGGREGATING TO RS 14,01,640/- (I.E RS 4,01,640/- IN THE FIRM OF M/S VARUDI ENTERPRISE AND RS 10,00,000/- IN THE FIRM OF JAY VARUDI CONSTRUCTION COMPANY). THE ASSESSEE SUBMITTED THAT THE CAPITAL CONTRIBUTION OF RS.10 LACS IN JAY VARUDI CONSTRUCTI ON COMPANY COMPRISED OF FOLLOWING:- NATURE OF CONTRIBUTION. MARKET VALUE. (RS) 1. TRACTOR. 2. WINCH COMPLETE MACHINE 3. CASH INTRODUCTION. 3,45,000 5,50,000 1,00,000 5. THE SOURCE OF PURCHASE OF THE AFORESAID ASSETS T HAT WAS CONTRIBUTED AS CAPITAL WAS SAID TO BE OUT OF HIS AG RICULTURAL INCOME AND PERSONAL SAVINGS. WITH REFERENCE TO INTRODUCTIO N OF CAPITAL CONTRIBUTION OF RS.4,01,640/- IN VARUDI ENTERPRISE, THE BREAK-UP SUBMITTED BY THE ASSESSEE WAS AS UNDER:- SOURCE. AMOUNT. (RS) OUT OF CLAIM MONEY RECEIVED ON SETTLEMENT OF CLAIM OF INSURANCE AND SALE OF DAMAGED CAR. 1,72,190 INTRODUCTION OF MOTORBIKE AS CAPITAL. 41,289 CASH INTRODUCED IN FIRM. 1,87,441 ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 4 THE SOURCE OF ASSETS CONTRIBUTED WAS SAID TO BE FRO M AGRICULTURE INCOME. THE A.O. FOR THE REASON, THAT THE ASSESSEE COULD NOT FURNISH THE DETAILS LIKE BILLS OF THE MACHINERY, BANK ACCOU NTS AND OTHER SUPPORTING EVIDENCE, CONSIDERED THE CONTRIBUTION IN CAPITAL TO FIRMS AS UNEXPLAINED INVESTMENT AND ADDED IT TO THE TOTAL INCOME. 6. AGGRIEVED BY THE ADDITION, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT (A). DURING THE CO URSE OF APPELLATE PROCEEDINGS, THE ASSESSEE MADE WRITTEN SU BMISSIONS AND FURNISHED VARIOUS DETAILS. IT WAS ALSO SUBMITTE D THAT THE ADDITIONS MADE IN THE HANDS OF THE FIRMS WITH RESPE CT TO THE CONTRIBUTION TO CAPITAL AS UNEXPLAINED INVESTMENTS U/S 68 WAS DELETED BY CIT (A) ON MERITS VIDE ORDER DATED 9 TH JUNE 2008. BASED ON THE DETAILS SUBMITTED, THE CIT (A) CALLED FOR THE REMAND REPORT FROM A.O. BASED ON THE REMAND REPORT AND OTH ER SUBMISSIONS MADE, CIT(A) CONCLUDED THAT THE ASSESSE E HAS DISCHARGED HIS ONUS BY ADDUCING SUFFICIENT EVIDENCE REGARDING INTRODUCTION OF ASSETS AND ITS SOURCE AND ACCORDING LY HE DELETED THE ADDITIONS MADE BY A.O. 7. AGGRIEVED BY THE DECISION OF CIT (A), REVENUE NO W IS IN APPEAL BEFORE US. 8. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A .O AND URGED THAT THE ORDER OF CIT (A) BE SET ASIDE. THE LD. A.R. ON THE OTHER HAND RELIES ON THE ORDER OF CITA (A). HE ALSO MADE WRITTEN SUBM ISSIONS AND PLACED PAPER BOOK ON RECORD. HE DREW OUR ATTENTION TO THE FACT THAT THE ADDITION MADE BY A.O. WITH REFERENCE TO UNEXPLA INED CASH CREDIT IN THE CASE OF FIRMS, NAMELY VARUDI ENTERPRISE AND JAY VARUDI ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 5 CONSTRUCTION CO., HAS BEEN DELETED BY CIT (A) VIDE ORDER DATED 9-6- 2008 AND FURTHER THE ACTION OF DELETION BY CIT (A) HAS BEEN UPHELD BY HONBLE TRIBUNAL VIDE ITS ORDER DATED 18-11-2011 (I TA NO.3123 TO 3126. 9. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RECORDS, WRITTEN SUBMISSIONS MADE. IT IS A FACT THAT BEFORE CIT(A), THE ASSESSEE HAS SUBMITTED VARIOUS DETAILS LIKE COPIES OF THE BILLS, COPIES OF SALE BILLS OF AGRICULTURE PRODUCE, EVIDENCE IN S UPPORT OF SHRI BHIKUSINH VAGELA HAVING REGULAR INCOME FROM AGRICUL TURE OPERATIONS BESIDES HAVING INCOME FROM SALE OF MILK ETC. BASED ON THE SUBMISSIONS, EVIDENCE PRODUCED AND THE DETAILED REM AND REPORT SUBMITTED BY A.O, THE LD CIT (A) DELETED THE ADDITI ONS MADE BY A.O. NO CONTRARY FACTS COULD BE PRODUCED BY LD D.R. BEFO RE US NOR COULD HE DEMONSTRATE AND DISPUTE THE FACTS RELIED ON BY C IT (A). IN VIEW OF TOTALITY OF FACTS, WE ARE OF THE VIEW THAT NO INTER FERENCE IS CALLED FOR WITH THE ORDER OF CIT (A) AND ACCORDINGLY WE DECLIN E TO INTERFERE WITH THE ORDER OF CIT (A) ON THIS ASPECT. ACCORDINGLY, T HIS GROUND OF REVENUE IS REJECTED. 10. THE ASSESSING OFFICER DIRECTED THE ASSESSEE TO GIVE DETAILS OF FAMILY MEMBERS AND TOTAL HOUSEHOLD EXPENSES AND SOU RCE OF MEETING THEM. THE ASSESSEE STATED THAT HIS FAMILY CONSISTED OF HIMSELF, HIS WIFE AND DAUGHTER AND HOUSE HOLD EXPENSES WERE TO T HE TUNE OF RS 36,000/- ONLY AS THE FAMILY LIVES IN SMALL VILLAGE AND WHEAT, MAIZE, MILK, GHEE AND OTHER EATABLES ARE FROM OWN AGRICULT URE. THE A.O WAS OF THE VIEW THAT CONSIDERING THE STATUS AND SIZE OF THE FAMILY, THE TOTAL HOUSEHOLD EXPENSES OF RS 36,000/- STATED BY THE ASS ESSEE APPEARED ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 6 TO BE ON LOWER SIDE. HE ESTIMATED REASONABLE HOUSEH OLD EXPENSES AT RS 5,000/- PER MONTH AND FOR THE WHOLE YEAR AT RS 6 0,000/-. SINCE THE ASSESSEE HAD STATED RS 36,000/- AS EXPENSES, THE BA LANCE OF RS 24,000/- (RS 60,000 RS 36,000/-) WAS ADDED TO TOT AL INCOME FOR WANT OF PROPER EXPLANATION. 11. THE ADDITION OF RS 24,000/- WAS DELETED BY CIT( A) BY HOLDING AS UNDER:- ADDITION OF RS.24,000/- ON ACCOUNT OF HOUSEHOLD EX PENSES IN THE HANDS OF THE APPELLANT IS ALSO DEVOID OF ANY MERIT BECAUSE THE APPELLANT HAS EXPLAINED IN DETAIL THAT HIS FAMI LY CONSIST OF SELF, WIFE AND A DAUGHTER ONLY, THEY LIVE IN A SMAL L VILLAGE AND ALSO RAISE NECESSARY CROPS AND MILK FOR THEIR DAILY CONSUMPTION THEREFORE, DRAWINGS OF RS.36,000/- SHOWN BY HIM WA S ADEQUATE. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANC ES; AS ENUMERATED IN DETAIL BY THE APPELLANT IN HIS SUBMIS SION ABOVE, NO ADDITION IS CALLED FOR ON THIS ACCOUNT, THEREBY, DELETED. 11. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. A.R. RELIED ON THE ORDER OF CIT (A). NOTHING CONTRARY HAS BEEN BR OUGHT BEFORE US BY LD. D.R. IN VIEW OF TOTALITY OF FACTS, WE DECLINE TO INTERFERE WITH THE ORDER OF CIT (A) ON THIS ASPECT. THEREFORE, THIS GR OUND OF THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 4- 4 - 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI). VICE PRESIDENT ACCOUNTANT MEMBER ITA NO.1 559/AHD/2010 ASSESSME NT YEAR 2003- 04 . 7 AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) VI, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 20 - 3 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 3 / 4 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 3 - 4 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 4 - 4 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 4 - 4 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4 - 4 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..