The ITO, Ward-3(3), Surat V. Shri Gordhanbhai Harjibhai Mevadia, Surat

ITA 1949/AHD/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1768 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-12-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 11-08-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD TANWARI
• Assessee Lawyers: J P SHAH
• Keywords: Reopening of assessment; Gift; Business income; TDS; Set aside
• Section: 143(3); 142(1); 147; 144; 2; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 1949/AHD./2005 ASSESSMENT YEAR : 1997-1998 INCOME TAX OFFICER, WARD-3(3), SURAT -VS.- S HRI GORDHANBHAI HARJIBHAI MAVADIA, SURAT (P.A. NO. ADEPM 2666 E) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI VINOD TANWARI , SR. D.R. RESPONDENT BY : SHRI J.P. SHAH O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 17.05.2005 OF LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) -II, SURAT FOR THE ASSESSMENT YEAR 1997-98. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL ENGAGED IN DEVELOPMENT OF LAND AND CONSTRUCTION WORK. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING INCOME OF RS.72,217/-, WHICH WAS A CCEPTED UNDER SECTION 143(1)(A) OF THE ACT ON 07.05.1999. THEREAFTER, THE ASSESSMENT WAS RE-OP ENED UNDER SECTION 147 OF THE ACT ON THE GROUND THAT THE PART OF LABOUR CHARGES REFLECTED IN TDS CERTIFICATES HAD NOT BEEN ACCOUNTED FOR, CAUSING ESCAPEMENT OF INCOME. THEREAFTER, THE A.O. COMPLETED THE ASSESSMENT UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT ON 23.08.2002, MAK ING ADDITION OF RS.7,11,215/- TO THE RETURNED INCOME OF RS.72,217/-. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ORDER OF A.O., AGAINST WHICH THE ASSESSEE WENT TO ITAT. T HE ITAT RESTORED THE ISSUE BACK TO THE FILE OF A.O. 3. ON RECEIPT OF THE ORDER OF ITAT, THE A.O. NOTICE D THAT THE ASSESSEE HAS SHOWN LABOUR RECEIPT OF RS.7,13,894/- ON ACCOUNT OF WORK DONE TO ANKIT ROHINI CO-OPERATIVE HOUSING SOCIETY. THE TDS CERTIFICATE ISSUED BY THE SOCIETY INDICATES TOTAL AMOUNT OF RS.14,25,064/- TOWARDS CONTRACT PAYMENT MADE. ACCORDINGLY, THE A.O . RE-OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSEE STATED THAT INCOME RELATED TO THE TDS CERTIFICATES ARE NOT CONTRACT RE CEIPT BUT IT IS A DEVELOPMENT CHARGES IN EARLIER YEARS ON ACCRUAL BASIS. THE A.O. AFTER EXAMINING TH E ISSUE, FINALIZED THE ASSESSMENT UNDER 2 SECTION 143(3) READ WITH SECTION 254/ 147 OF THE AC T ON 17.03.2005 AND MADE THE FOLLOWING ADDITIONS :- (I) ADDITION OF CONTRACT RECEIPT AS BUSINESS INCOME RS.14,25,064/- (II) UNEXPLAINED GIFT RS. 5,17,176/- (III) ESTIMATED PROFIT @ 20% IN BUNGLOW PROJECT B & D RS. 59,274/- (IV) 1/4 TH DISALLOWANCE OF EXPENSES UNDER VARIOUS HEADS RS. 97,924/- RS. 20,99,438/- 4. ON APPEAL, IN THE IMPUGNED ORDER THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT ACTION UNDER SECTION 147 CANNOT BE TA KEN AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MA KE A RETURN UNDER SECTION 139 OR 142(1) OR 148 OR TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NE CESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALS O OBSERVED THAT THE ASSESSEE HAS FILED THE TDS CERTIFICATE OF CO-OPERATIVE HOUSING SOCIETY, IT S OWN ACCOUNT FOR THE ASSESSMENT YEARS 1994- 95 TO 1996-97 AND ALSO CONTRA ACCOUNT OF M/S. ANKIT ROHINI CO-OPERATIVE HOUSING SOCIETY. FROM THE TDS CERTIFICATE, IT CAN BE SEEN THAT THE DATE O F CREDIT IS MENTIONED AS 31.03.1997 AND AMOUNT PAID /CREDITED IS MENTIONED AS RS.14,25,064/-. THE TDS OF RS.28,501/- HAS BEEN DEDUCTED ON 31.03.1997, NATURE OF PAYMENT IS SHOWN AS CONTRACTO R. FROM THE COPY OF ACCOUNT OF THE CO- OPERATIVE HOUSING SOCIETY, WHO HAS DEDUCTED THE TAX AT SOURCE, IT IS FOUND THAT IT WAS IN FACT ORGANIZING FEES PAYABLE OF DIFFERENT AMOUNTS IN DIF FERENT YEARS AS MENTIONED ABOVE. AFTER EXAMINING THESE FACTS, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RECORDED A FINDING OF FACTS THAT CO-OPERATIVE HOUSING SOCIETY HAS DEDUCTE D THE TAX AT SOURCE AS ON 31.03.1997 ON THE ENTIRE AMOUNT RECEIVABLE FROM THE CO-OPERATIVE HOUS ING SOCIETY IN THE ASSESSMENT YEARS FROM 1994-95 TO 1996-97 INSTEAD OF DEDUCTING THE TDS IN THE RESPECTIVE PREVIOUS YEARS. CONSIDERING THE TOTALITY OF THE FACTS, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT THE ASSESSEES CASE IS COVERED BY PROVISO TO SECTION 14 7 OF THE INCOME TAX ACT AND NOTICE UNDER SECTION 148 READ WITH SECTION 147 COULD HAVE BEEN I SSUED WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 1997-98. IN THIS CASE, NOTICE UNDER SECTION 148 WAS ISSUED ON 29.03.2004, WHICH IS BEYOND FOUR YEARS. IN THE CASE OF SURAT CITY GYM KHANA VS.- DCIT [254 ITR 733], THE HON'BLE 3 GUJARAT HIGH COURT HAS OBSERVED THAT PROVISO TO SEC TION 147 WILL PREVAIL OVER OTHER PROVISIONS FOR REOPENING OF ALREADY COMPLETED ASSESSMENT. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ACCORDING HELD THAT RE-OPENING THE ASS ESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT BY ISSUE OF NOTICE DATED 29.03.2004 IS NOT JUSTIFIED. CONSEQUENTLY, HE ANNULLED THE ASSESSMENT. 5. ON MERIT ALSO, THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS) OBSERVED THAT THE ADDITION OF RS.14,25,064/- CANNOT BE MADE BECAUSE T HIS, IN FACT, REPRESENTS DEVELOPMENT CHARGES RECEIVABLE/ RECEIVED FROM THE CO-OPERATIVE HOUSING SOCIETY AND THE SAME WAS DISCLOSED IN THE RETURN OF INCOME FROM ASSESSMENT YEARS 1994-95 TO 1 996-97. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. C.I.T.(A)-II, SURAT HAS ERRED IN DELETING AN ADDITI ON OF RS.14,25,064/- MADE ON ACCOUNT OF NOT REFLECTING THE CONTRACT RECE IPT PERTAINING TO YEAR UNDER CONSIDERATION ON WHICH TDS WAS MADE AND REFUN D WAS CLAIMED BY THE ASSESSEE. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. C.I.T.(A)-II, SURAT HAS ERRED IN DELETING THE ADDIT ION MADE ON ACCOUNT OF UNEXPLAINED FOREIGN GIFT OF RS.5,17,176/-. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. C.I.T.(A)-II, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (4) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. C.I.T.(A)-II, SURAT BE SET ASIDE AN THAT OF THE ASSESSING OFFICER BE RESTO RED TO. 6. AT THE TIME OF HEARING ON BEHALF OF REVENUE, SHR I VINOD TANWARI APPEARED AND CONTENDED THAT SECOND TIME NOTICE UNDER SECTION 148 WAS ISSUED BECAUSE THE ASSESSEE NEVER SUBMITTED FULLY AND TRULY ALL MATERIAL FACTS TO THE DEPARTMENT. THE INFORMATION WAS EXTRACTED FROM THE TDS CERTIFICATE AND LATER ON THE ASSESSEE HAD SUBMITTED THAT RS.14,25,064/- WAS PERTAINING TO CONTRACT RECEIPT AND DEVELOPMENT CHAR GES. RS.7,13,894/- WAS THE CONTRACTUAL RECEIPT AND BALANCE WAS DEVELOPMENT CHARGES SHOWN IN THE EA RLIER YEARS, I.E. ASSESSMENT YEARS 1994-95, 1995-96 AND 1996-97. IN THE IMPUGNED ORDER, THE LEA RNED COMMISSIONER OF INCOME 4 TAX(APPEALS) MERELY RELIED UPON THE SUBMISSION OF T HE ASSESSEE WITHOUT LOOKING INTO THE TOTALITY OF THE CIRCUMSTANCES. THE LD. D.R. FURTHER SUBMITTE D THAT THE TDS CERTIFICATE ITSELF SHOW THAT IT WAS IN RESPECT OF CONTRACTUAL RECEIPT ON WHICH TDS @ 2% WAS MADE AND THE AMOUNT WAS DEPOSITED IN GOVERNMENT A/C. THEREFORE, IT WAS ONLY AN AFTER-THOUGHT STORY OF THE ASSESSEE ABOUT DEVELOPMENT CHARGES. 6.1. WITH REGARD TO THE JUDGMENT OF THE HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF SURAT CITY GYMKHANA VS.- DCIT REPORTED IN 254 ITR 733 ON THE IDENTICAL ISSUE OF THE PROVISIONS OF SECTION 147 OF THE ACT, THE D.R. CONTENDED THAT AGAINST THE SAID JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT, THE DEPARTMENT HAD SUBMITTED PROPOSAL TO THE BOARD FOR FILING OF S.L.P. IN SUPREME COURT. 6.2. WITH REGARD TO DELETION OF FOREIGN GIFT, THE L D. D.R. SUBMITTED THAT THE ASSESSEE FAILED TO GIVE ANY DETAILS REGARDING RELATIONSHIP WITH THE DO NOR, PROPER VERIFIABLE DETAILS, LIKE NAME AND BRANCH OF THE BANK. THEREFORE, THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THE FACT AND CONFIRMED THE ADDITIO N OF RS.5,17,176/- IN RESPECT OF UNEXPLAINED FOREIGN GIFT. 7. ON THE OTHER HAND, SHRI J.P. SHAH, LD. COUNSEL O F THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS). THE LD. COUNSEL SUBMITTED THAT BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) ONE OF THE GROUNDS TAKEN WAS THAT RE- OPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCO ME TAX ACT IS BAD-IN-LAW. ON THIS GROUND, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ANN ULLED THE ASSESSMENT FOR THE DETAILED REASONS GIVEN IN PARA 4.2., WHICH READS AS UNDER :- THE APPELLANT HAS FILED TOS CERTIFICATE OF THE CO- OP.HSG. SOCIETY, ITS OWN ACCOUNT FOR THE A,YS. FROM 1994-95 TO 1996-97 AND A LSO CONTRA ACCOUNT OF ANKIT ROHINI CO-OP.HSG. SOCIETY LTD. FROM THE TUS CERTIFI CATE IT CAN BE SEEN THAT DATE OF CREDIT IS MENTIONED AS 31-3-1997 AND AMOUNT PAID /CREDITED IS MENTIONED AS RS.14,25,064/-. THE TDS OF RS,28,501/- HAS BEEN DED UCTED ON 31-3-1997, NATURE OF PAYMENT IS SHOWN AS CONTRACTOR. FROM THE COPY OF ACCOUNT OF THE CO-OP, HSG. SOCIETY WHO HAS DEDUCTED THE TAX AT SOURCE, IT IS FOUND THAT IT WAS IN FACT ORGANIZING FEES PAYABLE OF DIFFERENT AMOUNTS IN DIF FERENT YEARS AS MENTIONED ABOVE. THESE PAYABLE AMOUNTS HAVE BEEN CREDITED IN THE ACCOUNTS OF THE APPELLANT IN RESPECTIVE ASSESSMENT YEARS. THE COPY OF THE ACCOUNT OF THE APPELLANT AS WELL AS OF THE CO-OP.HSG. SOCIETY OF T HE 3 DIFFERENT YEARS ARE ATTACHED HEREWITH THIS ORDER WHICH REVEALS MAT WHAT EVER ORGANIZING FEES WAS RECEIVABLE FROM ANKIT CO-OP. HSG. SOCIETY LTD. HAS ALREADY BEEN CREDITED AS 5 INCOME IN THE P&L. A/C. OF THE APPELLANT OF RESPECT IVE YEARS, IT IS FOUND THAT THE CO-OP. HSG. SOCIETY HAS DEDUCTED THE TAX AT SOURCE AS ON 31-3-1997 ON THE ENTIRE AMOUNT RECEIVABLE FROM THE CO-OP. HSG. SOCIE TY IN THE A.YS. FROM 1994- 95 TO 1996-97 INSTEAD OF DEDUCTING THE TDS IN THE R ESPECTIVE YEARS. THIS HAS CREATED CONTUSION IN THE MIND OF AG, THE AO THOUGHT THAT THE ENTIRE INCOME OF RS.14,25,064/- WAS NOT SHOWN AS INCOME, THEREFORE, HE MADE THE ADDITION. IN FACT, THIS ISSUE HAS ALREADY BEEN CONSIDERED IN THE ORIGINAL ASSESSMENT MADE BY THE AO, THEREFORE, IT CANNOT BE SAID THAT BECAUSE O F FAILURE ON THE PAN OF THE ASSESSEE, THE INCOME HAS ESCAPED ASSESSMENT THERE W AS NO WORK-IN-PROGRESS, THEREFORE, THE SAME WAS NOT SHOWN IN THE ACCOUNTS A ND NO ADDITION HAS BEEN MADE ON THIS GROUND. HENCE, THIS CAN ALSO NOT BE A GROUND FOR SAYING THAT ASSESSEE HAD NOT MADE FULL AND TRUE DISCLOSURE. FRO M THE CAPITAL ACCOUNT, IT IS FOUND THAT THE APPELLANT HAD CREDITED THE FOREIGN G IFTS, THEREFORE, THERE WAS FULL AND TRUE DISCLOSURE OF THIS FACT ALSO. THE APPELLAN T HAD ALSO DEBITED FOREIGN TOUR EXPENSES IN THE ACCOUNT AMOUNTING TO RS. 1,79,329/- , THEREFORE IT CANNOT BE SAID THAT THE APPELLANT HAD NOT MADE FULL AND TRUE DISCL OSURE OF ALL THESE EXPENSES. SIMILAR IS THE POSITION IN RESPECT OF CAR LOAN INTE REST, LOSS ON SALE OF CAR ETC. THESE FACTS WERE ALREADY AVAILABLE AND ITS DISCLOSU RE WAS MADE IN THE ACCOUNTS FILED WITH THE RETURN OF INCOME BEFORE THE ORIGINAL ASSESSMENT WAS MADE. THE LAST REASON FOR REOPENING THE ASSESSMENT IS THAT TH E APPELLANT HAD SHOWN UNSECURED LOAN OF RS,9,48,852/- AND PROVISIONS OF R S,12,84,300/-. THE ASSESSES HAD ALSO LOANS AND ADVANCES OF RS.76.50 LACS. ALL T HESE FACTS WERE ALREADY AVAILABLE IN THE BALANCE SHEET AND OTHER DETAILS FI LED BY THE APPELLANT, THEREFORE, IT CAN NOT BE HELD THAT THE APPELLANT HAD NOT MADE FULL AND TRUE DISCLOSURE IN THE RETURN OF INCOME FILED BY IT IN VIEW OF THE ABOVE F ACTS AND CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE APPELLANT'S CASE IS COVER ED BY PROVISO TO SECTION 147 OF THE I.T, ACT AND NOTICE U/S. 148 R.W.S. 147 COULD H AVE BEEN ISSUED WITHIN 4 YEARS FROM THE END OF THE A.Y. 1997-98, IN THIS CASE NOTI CE U/S.148 WAS ISSUED ON 29- 3-2004 WHICH IS BEYOND 4 YEARS. IN THE CASE OF SURA T CITY GYMKHANA V. DCIT 254 ITR 733 THE HON. GUJARAT HIGH COURT HAS OBSERVE D THAT PROVISO TO SECTION 147 WILL PREVAIL OVER OTHER PROVISIONS FOR REOPENIN G OF ALREADY COMPLETED ASSESSMENT. THE LION. GUJARAT HIGH COURT IN THE CAS E OF VARELI 240 ITR 77 HAS HELD THAT WHERE THE REASONS RECORDED BY THE AO DISC LOSE THAT REASON ATTRIBUTABLE TO STATEMENT OF INCOME CHARGEABLE TO T AX, WAS NOT NON-EXERCISE OF DUE DILIGENCE BY THE AO WHILE COMPLETING THE EARLIE R ASSESSMENT AND THERE IS NO WHISPER ABOUT FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, REOPENING OF ASSESSMENT WOULD NOT B E IN ORDER. THEREFORE, ON THE BASIS OF THE DETAILED SUBMISSIONS OF THE APPELLANT, I HAVE NO HESITATION IN HOLDING THAT THE AO WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENT U/S.148 OF THE I.T. ACT BY ISSUE OF NOTICE DTD.29-3-2004. ACCORDIN GLY THE ASSESSMENT MADE IN CONSEQUENCE OF SUCH NOTICE CAN NOT BE UPHELD. THE A SSESSMENT IS ANNULLED. 7.1. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT AGAINST THE ANNULMENT OF ASSESSMENT, THE REVENUE HAS NOT TAKEN ANY GROUND. MEANING THEREBY T HAT THE REVENUE IS NOT AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) HOLDING THAT RE-OPENING OF ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT BY ISSUANCE OF NOTICE DATED 29.03.2004 IS UNJUSTIFIED AND CONSEQUENTLY THE SAME IS RIGHTLY ANNULLED. THER EFORE, THE VIEW TAKEN BY THE LEARNED 6 COMMISSIONER OF INCOME TAX(APPEALS) ANNULLING THE A SSESSMENT ATTAINED FINALITY AND ON THIS GROUND, THE APPEAL OF THE REVENUE BE DISMISSED. 8. IN HIS REJOINDER, THE LD. D.R. SUBMITTED THAT TH ERE IS NO NECESSITY OF TAKING SEPARATE GROUND BECAUSE THE REVENUE HAS CHALLENGED BOTH THE ADDITIO NS, WHICH WERE DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER. THE RE-OPENING OF ASSESSMENT WAS VALIDLY MADE, THEREFORE, THE LEARNED COMMISSION ER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN CANCELLING THE ASSESSMENT ON THE GROUND THAT THE RE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. 9. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS WELL SETTLED LAW THAT ACTION UNDER SECTION 14 7 CANNOT BE TAKEN AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, UNLESS ANY INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEARS BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO NOTICE UNDER SE CTION 142(1) OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT FOR THAT ASSESSMENT YEAR. THE REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTION 148 DA TED 29.03.2004 ARE AS UNDER :- (I) THE EXPENSES INCURRED FOR CONSTRUCTION OF BUNGL OW AND SALE PRICE NEEDS VERIFICATION AS THE DIFFERENCE BETWEEN THEM ARE AT LOWER SIDE. (II) WORK-IN-PROGRESS IS NOT SHOWN BY THE ASSESSEE. (III) NON-VERIFICATION OF FOREIGN GIFT OF RS.3 LACS AND RS.2,17,176/-, ASSESSEE IS IN RECEIPT OF FOREIGN GIFT IN SUBSEQUENT ASSESSMENT TO O. (IV) NON-VERIFICATION OF FOREIGN TOUR EXPENSES OF R S.1,79,923/-. (V) NON-VERIFICATION OF JUSTIFICATION AND REASONABL ENESS OF HUGE PAYMENT OF CAR LOAN INTEREST OF RS.2,13,155/- AND THE LOSS ON ACCO UNT OF SALE OF CAR AMOUNTING TO R.1,28,166/-, WHICH HAS DIRECTLY MINIMIZED NET PROF IT TO MEAGER SUM OF RS.35,303/- VIS-A-VIS, HUGE RECEIPT. ASSESSEES BAL ANCE SHEET IS WORTH ABOUT RS.3,57,98,925/- WITH HIS OWN CAPITAL IS RS.46,09,0 65/-. (VI) THERE ARE UNSECURED LOAN OF RS.9,48,852/- AND HUGE PROVISIONS OF RS.12,84,300/- NOT SUBJECTED TO VERIFICATION. THE A SSESSEE HAVE ADVANCED LOANS AND ADVANCES OF RS.76.50 LACS. THE ASSESSEE IS IN R ECEIPT OF A VERY LARGE AMOUNT OF RS.2 CRORES BY WAY OF ADVANCES AND FROM THE PROS PECTIVE BUYERS OF THE FLAT INCLUDING SUNDRY CREDITORS. 7 10. ADMITTEDLY THE NOTICE UNDER SECTION 148 ON 29.0 3.2004 WAS ISSUED AFTER FOUR YEARS AND THERE IS NO FAILURE ON THE PART OF ASSESSMENT TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL . AS A MATTER OF FACT, THE ASSESSMENT FOR THE ASSESSMENT YEAR 1997-98 WAS EARLIER COMPLETED UNDER SECTION 147 ON 23.08.2002. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECTION 147, THE REA SONS RECORDED, REASONS GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN PARA 4.2 OF THE IMPUGNED ORDER, AND WE ARE CONVINCED THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) IS LEGALLY AND FACTUALLY CORRECT IN HOLDING THAT RE-OPENING OF ASSESSMENT UNDER SECTION 148 IS NOT JUSTIFIED. CONSEQUENTLY, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS HAV ING NO OPTION BUT TO ANNUL THE ASSESSMENT. IT APPEARS THAT THE REVENUE IS NOT AGGR IEVED BY THE ACTION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THIS REGARD, WHICH IS EVI DENT FROM THE FACT THAT NO GROUND AGAINST ANNULMENT OF ASSESSMENT IS RAISED IN THE GROUNDS OF APPEAL. CONSEQUENTLY WITHOUT GOING INTO THE MERIT, WE INCLINED TO UPHOLD THE ORDER OF LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) CANCELLING THE ASSESSMENT AND REJECT THE APPEAL OF THE REVENUE. 11. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 11.12.2009 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11/ 12 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT 3) CIT(A) CONCERNED; (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.