Shri Alpeshkumar Chandulal Shah(HUF), Surat V. The Income tax Officer,Ward-9(1), Surat

ITA 1603/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5879 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-07-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 13-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH
• Assessee Lawyers: M K PATEL
• Keywords: Reopening of assessment; Unexplained cash credit; Gift
• Section: 133A; 148

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BEFORE SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER SHRI ALPESHKUMAR CHANDULAL SHAH (HUF), A-74, SAIFEE SOCIETY, NR. JAIN TEMPLE, L. H. ROAD, SURAT. VS. INCOME-TAX OFFICER, WARD 9(1), SURAT. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI M. K. PATEL, AR REVENUE BY:- SHRI P. R. GHOSH, DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN CONFIRM ING THE ACTION OF THE AO ISSUING NOTICE U/S 148 OF THE ACT AND REO PENING THE ASSESSMENT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED CONFIRMING THE ACTION OF THE AO DISALLOWING 20% OF VARIOUS EXPENSES AMOUNTIN G TO RS.8,791/-. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT THE LD. CIT(A) HAS ERRED CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS.43,008/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDITS IN THE BANK ACCOUNT. ITA NO.1603/AHD/2010 ASST. YEAR :2003-04 2 2. THE FACTS OF THE CASE ARE THAT ASSESSEE HAS FILE D RETURN OF INCOME FOR ASST. YEAR 2003-04 ON 5.2.2004 SHOWING LOSS OF RS.9 ,877/-. THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDER SEC TION 148(1) ON 28.03.2008 ON THE BASIS OF INFORMATION RECEIVED FRO M THE PREMISES OF SHRI PANKAJ DANAWALA, WHERE A SURVEY UNDER SECTION 133A WAS CARRIED OUT BY THE DDIT (INV)-II, SURAT ON 11.3.2005. ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY AT THE PREMISES OF SHRI PANKAJ DANAWALA IT WAS NOTICED BY THE AO THAT BOGUS PROFIT AND LOSS AC COUNT, CAPITAL ACCOUNT AND BALANCE SHEET WERE PREPARED FROM YEAR TO YEAR B Y SHOWING INCOME LIKE AGRICULTURAL INCOME, SMALL GIFTS AND INCOME FR OM INTEREST, BROKERAGE, COMMISSION ETC. AND THUS CREATING SUBSTANTIAL CAPIT AL. THE ASSESSEE BELONGED TO ONE SHRI MOHAN DHANJI PATEL GROUP WHERE ALSO SURVEY UNDER SECTION 133A WAS CARRIED OUT AND IT WAS FOUND THAT SHRI PANKAJ DANAWALA HAD CREATED 163 FILES FOR THE BENEFIT OF THIS GROUP BY CREATING FICTITIOUS CAPITAL AND TRANSFERRING IT INTO THE ACCOUNTS OF BE NEFICIARIES AND ADJUSTING IT AGAINST UNACCOUNTED MONEY GENERATED BY THE GROUP IN THE BUSINESS. IN THE CASE OF PRESENT ASSESSEE SHRI PANKAJ DANAWALA B UILT UP CAPITAL ACCOUNT AND BALANCE SHEET FOR THE ASST. YEAR 1986-8 7 IN THE IMPOUNDED FILE NO.3034.IN ASST. YEAR 1994-95 OPENING CAPITAL OF RS.2,31,984/- HAS BEEN SHOWN WHICH WAS SUBSEQUENTLY FURTHER BUILT UP BY SHOWING FICTITIOUS INCOME. THE AO NOTICED THAT ASSESSEE HAD A DEPOSIT OF RS.43,008/- IN HIS BANK ACCOUNT WHICH WAS NOT EXPLA INED. ON THIS BASIS HE REOPENED THE ASSESSMENT AND NOT FINDING ANY EXPL ANATION FROM THE ASSESSEE HE MADE THIS ADDITION. FURTHER HE DISALLOW ED 20% OUT OF EXPENDITURE RESULTING IN ADDITION OF RS.8,791/-. 3. THE LD. CIT(A) CONFIRMED THE REOPENING OF ASSESS MENT AS WELL AS ADDITION AS NO EXPLANATION WAS FURNISHED BEFORE HIM . 3 4. I HAVE HEARD THE LD. AR AND THE LD. DR ON THE IS SUE. IN MY CONSIDERED VIEW, REOPENING OF ASSESSMENT WAS JUSTIF IED BECAUSE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A). THUS A PRIMA FACIE SATISFACTION IS CORRECTL Y ARRIVED AT BY THE AO AS TO THE ESCAPEMENT OF ASSESSMENT. ALL THE THREE I NGREDIENTS FOR ISSUANCE OF NOTICE UNDER SECTION 148(1) ARE SATISFIED. THE A O NOTICED THAT ASSESSEE HAD A DEPOSIT OF RS.43,008/- IN HIS BANK ACCOUNT WH ICH WAS NOT EXPLAINED. ON THIS BASIS HE REOPENED THE ASSESSMENT AND NOT FINDING ANY EXPLANATION FROM THE ASSESSEE HE MADE THIS ADDITION . FURTHER HE DISALLOWED 20% OUT OF VARIOUS EXPENSES RESULTING IN ADDITION OF RS.8,791/-. THERE IS NO DOUBT ABOUT ASSESSEE AND AS SESSMENT YEAR AND SIMILARLY THERE IS ALSO A CHARGE OF ESCAPEMENT OF A SSESSMENT TO THE EXTENT OF RS.43,008/- BEING THE CASH DEPOSIT IN THE BANK A ND REMAINED PRIMA FACIE UNEXPLAINED AT THE POINT OF TIME OF RE-OPENIN G OF ASSESSMENT. EVEN BEFORE ME THERE IS NO EXPLANATION IN RESPECT OF ADD ITIONS PROPOSED BY THE AO AND SUSTAINED BY LD. CIT(A). ACCORDINGLY, I UPHO LD THE ORDER OF THE LD. CIT(A). THUS ALL THE THREE GROUNDS RAISED BY TH E ASSESSEE ARE REJECTED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 8/7/2010 SD/- (D.C.AGRAWAL) ACCOUNTANT MEMBER AHMEDABAD, DATED : 8/7/2010 MAHATA/- 4 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD