The ITO, Ward-1(1), Bhavnagar V. M/s. Suvidha Estate Developers, Bhavnagar

ITA 1923/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6364 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-07-2011
• Assessment Year: 1991-1992
• Appeal Filed On: 23-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained cash credit; Tax effect
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1923 / AHD/2008 (ASSESSMENT YEAR 1991-92) ITO, WARD 1(1), BHAVNAGAR VS. M/S. SUVIDHA ESTATE DEVELOPERS, SUBHASHNAGAR, SUVIDHA TOWNSHIP, BHAVNAGAR PAN/GIR NO. : ABBFS3123Q (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI B L YADAV, SR. DR RESPONDENT BY: SHRI M J SHAH, AR O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AGAI NST THE ORDER OF LD. CIT(A) XX, AHMEDABAD DATED 02.01.2008 FOR THE A SSESSMENT YEAR 1991-92. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS OF T HE CASE IN DELETING THE ADDITION OF RS.2,62,610/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS OF THE C ASE IN DELETING THE ADDITION OF RS. 2,43,871/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BLOCK BOOKING RECEIPTS/PART P AYMENTS. 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS OF THE C ASE TO IGNORE THE FACT THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT SATISFACTORY/ACCEPTABLE TO THE A.O. THE LD. C.I.T.( A) HAS FURTHER ERRED IN IGNORING THAT THE ASSESSEE HAS NEITHER PRO VED THE IDENTITY AND GENUINENESS OF THE DEPOSITS NOR HAS THE ASSESSE E PROVED THE CREDITWORTHINESS OF THE CREDITORS. I.T.A.NO. 1923/AHD/2008 2 4. THE LD.CIT(A) ERRED IN LAW AND ON FACTS OF THE C ASE IN AS MUCH AS THAT THE FACT OF BLOCK BOOKING TRANSACTION OFFERED BY THE ASSESSEE NOT BEING SATISFACTORY /ACCEPTABLE TO THE A.O. HAS BEEN IGNORED. FURTHER, THE UNDISCLOSED MONEY OF THE ASSE SSEE INTRODUCED UNDER GUISE OF THE VARIOUS NAMES FOR BLOCK BOOKING / PART PAYMENTS HAVE BEEN ADEQUATELY PROVED IN THE ASSESSM ENT ORDER WHEREAS THE ASSESSEE THE GENUINENESS OF THE CONCERN ED BLOCK BOOTING RECEIPTS PART PAYMENTS DURING THE COURSE O F ASSESSMENT PROCEEDINGS. 5. ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O . 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF A.O. BE RESTORED TO THE ABOVE EXT ENT. 2. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. A.R. THAT THE TAX EFFECT IN THE PRESENT CASE IS BELOW RS.2 LACS AND HENCE, A S PER THE CBDT INSTRUCTIONS DATED 24.10.2005, REVENUE IS NOT SUPPO SED TO FILE ANY APPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT IS BELOW RS.2 LACS. HE SUBMITTED A COPY OF THE WORKING REGARDING TAX EFFECT IN THE PRE SENT CASE AS PER WHICH, THE AMOUNT OF ADDITION DELETED BY THE LD. CIT(A) IS SHOWN AT RS.5,06,500/- AND THAT TAX EFFECT HAS BEEN WORKED O UT AT RS.98,464/-. 3. AS AGAINST THIS, LD. D.R. SUPPORTED THE ASSESSME NT ORDER AND HE HAD NOTHING TO SAY REGARDING INADMISSIBILITY OF THE APPEAL IN VIEW OF THE CBDT INSTRUCTIONS DATED 24.10.2005. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT AS PER THE GROUND S OF APPEAL RAISED BY THE REVENUE, THE REVENUE IS DISPUTING REGARDING THE ADDITION DELETED BY THE LD. CIT(A) OF RS.2,62,610/- AND RS.2,43,871/- T OTAL RS.5,06,481/- ROUNDED OFF TO RS.5,06,500/-. AS PER THE WORKING SU BMITTED BY THE LD. A.R., TAX EFFECT WORKED OUT AT RS.98,,464/- ON THE BASIS OF TAX RATE OF 18% + SURCHARGE @ 8%. WE FAIL TO UNDERSTAND THE BA SIS OF ADOPTING TAX RATE OF 18% BUT THE REVENUE HAS NEITHER RAISED ANY CONTENTION NOR FURNISHED ANY WORKING TO THE EFFECT THAT TAX EFFECT IN THE PRESENT CASE IS I.T.A.NO. 1923/AHD/2008 3 MORE THAN RS.2 LACS. EVEN IF THE TAX RATE IN THE R ELEVANT YEAR IS CONSIDERED @ 35% PLUS 8% SURCHARGE, THEN ALSO TAX E FFECT ALONG WITH SURCHARGE WILL BE LESS THAN RS.2 LACS. HENCE, WE H OLD THAT THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT IN VIEW OF THE BOARDS INSTRUCTION DATE 24.10.2005. ACCORDINGLY, WE DISMISS THIS APPEAL OF THE REVENUE IN LIMINE AS UNADMITTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING ITSELF I.E. 6 TH JULY, 2011. SD./- SD./- (MUKUL SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 06 TH JULY, 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 6/7 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6/7 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 6/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 14/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15/7/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .