Shri Samir P.Jariwala, Surat V. The Income tax Officer,Ward-5(4), Surat

ITA 201/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94852 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: URVASHI SHODHAR
• Keywords: Unexplained investment; Peak credit
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI S. S. GODARA, JM, & MANISH BORAD, AM. ITA NO.201/AHD/2012 ASST. YEAR: 2008-09 SHRI SAMIR P. JARIWALA, PROP. M/S DHAWAL JARI INDUSTRIES, 3/4007, KUWARSINGH STREET, BEGUMPURA, SURAT. VS. INCOME-TAX OFFICER, WARD-5(4), SURAT APPELLANT RESPONDENT PAN : AAVPJ 2723 O APPELLANT BY MS URVASHI SHODHAR, AR RESPONDENT BY SHRI RAJDEEP SINGH, SR.DR DATE OF HEARING: 5/10/2015 DATE OF PRONOUNCEMENT: 18/12/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A)-IV, SURAT DATED 21.10.2011 IN APPEAL NO.CAS- IV/272/10-11. ASSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) BY INCOME-TAX OFFICER, WARD-5(4), SU RAT VIDE ORDER DATED 30.12.2010 FOR ASST. YEAR 2008-09. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF JOB WORK OF J ARI-KASAB. ASSESSEE FILED HIS RETURN OF INCOME ON 19.02.2009 D ECLARING TOTAL INCOME OF RS.86,712/-. THE CASE WAS SELECTED FOR SC RUTINY ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 2 ASSESSMENT AND NOTICE UNDER SECTION 143(2) OF THE A CT WAS ISSUED ON 27.8.2009 AND ASSESSMENT WAS FRAMED AT A TOTAL INCO ME OF RS.30,92,550/- BY MAKING FOLLOWING ADDITIONS:- (I) ADDITION U/S 69 FOR UNEXPLAINED INVESTMENT - RS .27,90,310/- (II) ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDI AT - RS.2,15,531/- AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A) WH EREIN ASSESSEES APPEAL WAS PARTLY ALLOWED AND BEING FURT HER AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 3. GROUND NOS. 1 & 2 BEING INTER RELATED HAVE BEEN TAKEN TOGETHER AND THEY READ AS UNDER :- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN SUST AINING ADDITION OF RS.8,39,832/- FROM UNDISCLOSED ICICI BANK ACCOUNT M ADE BY AO INVOKING PROVISIONS OF SECTION 69 OF THE ACT. LD . CIT(A) OUGHT TO HAVE APPLIED NET PROFIT RATE ON UNACCOUNTE D TRANSACTIONS THOUGH THIS BANK ACCOUNT AFTER HAVING ACCEPTED THE DEPOSITS AS TRADING RECEIPTS AND GRANTED DEDUCT ION OF EXPENSES INCURRED. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ADDITION OF CASH SHORTAGE OF RS.1,03,249/- AND PAYMENTS OF RS.1,79,481/- TREATING AS CAPITAL IN NATURE IN THIS ACCOUNT IGNORING THE FACT THAT ONCE ADDITION OF PEAK BALANC E IS MADE THERE IS NO JUSTIFICATION OF ANY SEPARATE ADDITIONS . LD. CIT(A) OUGHT TO HAVE DELETED SUCH AMOUNT COMPRISING IN ADD ITIONS MADE BY AO U/S 69 OF THE ACT. ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 3 4. WITH THE ASSISTANCE OF LD. AR AND LD. DR AND PER USING THE RECORD AVAILABLE ON RECORD, WE ARE ABLE TO GATHER T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE BASIS OF SO ME INFORMATION, ASSESSING OFFICER DETECTED ONE A/C HELD BY ASSESSEE WITH ICICI BANK WHICH WAS NOT SHOWN IN THE BOOKS OF ACCOUNT AND DUR ING THE YEAR UNDER APPEAL TOTAL CREDITS IN THIS UNDISCLOSED ICIC I BANK A/C WAS RS.25,64,264/- AND THIS FACT WAS ADMITTED BY ASSESS EE ALONG WITH GIVING A REASON THAT ALL THESE TRANSACTIONS WERE RE LATING TO BUSINESS OF THE ASSESSEE AND TO FACILITATE MORE SALES AND GOOD SERVICES TO THE CUSTOMERS BASED IN SOUTH INDIA THIS ACCOUNT WAS OPE NED AND DUE TO THE MISTAKE OF ACCOUNTANT THIS ACCOUNT WAS NOT DISC LOSED IN THE BOOKS OF ACCOUNT. ASSESSING OFFICER WAS NOT SATISFI ED WITH THE REPLY OF ASSESSEE FOR ADOPTING PEAK BALANCE OF THIS ACCOUNT AND FINALLY RESORTED TO MAKE ADDITION OF RS.25,64,333/-. 5. HOWEVER, LD. CIT(A) GAVE PART RELIEF TO THE ASSE SSEE BY OBSERVING AS UNDER :- IN REGARD TO CREDITS IN UNDISCLOSED BANK A/C. WAS I CICI BANK. 3.4.1 . I HAVE GONE THROUGH THE FACTS OF THE CASE . THERE IS NO DISPUTE REGARDING THE BANK ACCOUNT WITH ICICI BANK BEING UNDISCLOSED. IT HAS BEEN ACCEPTED BY THE APPELLANT THAT THE ACCOUNT REMAINED TO BE CONSIDERED. FROM THE BANK ST ATEMENT, IT IS OBSERVED THAT THE DEPOSITS IN CASH HAVE BEEN MADE AT PLACES OUTSIDE SURAT. THIS IS EVIDENT FROM THE CHAR GES THAT HAVE BEEN LEVIED BY THE BANK IN RESPECT OF SUCH DEPOSITS . THE AMOUNTS HAVE BEEN WITHDRAWN IN CASH USUALLY FROM TH E ATM. THIS LENDS CREDIBILITY TO THE CLAIM OF THE APPELLAN T THAT SALES MADE OUTSIDE SURAT WERE DEPOSITED IN THE ACCOUNT AN D ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 4 WITHDRAWN FOR EXPENSES AND PURCHASES EVEN IF ONE DO ES NOT CONSIDER THE EVIDENCE GIVEN IN APPEAL REGARDING CON FIRMATION OF SALES DEPOSITS. AS THE DEPOSITS ARE TRADING RECEIPT S, IT IS THE PROFIT WHICH HAS TO BE CONSIDERED AS INCOME. HOWEVE R, SINCE THE ACCOUNTS ITSELF IS AN ADMITTEDLY UNDISCLOSED AC COUNT, THE INCOME ACCRUING TO THE APPELLANT FROM THE TRANSACTI ONS IN THE ACCOUNT WILL BE THE AGGREGATE OF 1. PEAK OF CREDIT IN THE ACCOUNT LESS OPENING CREDI T BALANCE. THE PEAK IS FOUND TO BE RS.1,31,320/- APPEARING ON 4.4.2007 AND OPENING BALANCE IS RS.4,570/-. THE ADD ITION ON ACCOUNT OF PEAK OF CREDIT WOULD BE RS.1,26,750/-. 2. PROFIT FROM TRANSACTIONS OF TRADING APPEARING AF TER THE PEAK AS PROFITS UPTO THE DATE OF PEAK GETS INCLUDED IN T HE PEAK. THE TOTAL OF DEPOSITS AND THEREFORE TRADING RECEIPT S AFTER THE DATE OF PEAK IS RS.25,64,264/-. THE PROFIT FROM THE SE UNDISCLOSED SALES IS REQUIRED TO BE DETERMINED AT T HE GROSS PROFIT DISCLOSED IN THE RETURN FOR THE YEAR BECAUSE THE APPELLANT IS CARRYING OUT SIMILAR BUSINESS EXCEPT T HAT ONE PART IS ACCOUNTED, THE OTHER IS NOT. NEITHER THE CO NTENTION OF THE AO THAT PROFIT FROM UNDISCLOSED TRANSACTIONS WO ULD BE HIGHER THAN DISCLOSED TRANSACTIONS NOR THE ARGUMENT OF THE ASSESSEE THAT IT SHOULD BE ASSESSED AT NET PROFIT R ATES IS ACCEPTABLE. NET PROFIT RATES CANNOT BE APPLIED AS T HE APPELLANT HAS NOT GIVEN ANY EVIDENCE REGARDING EXPE NSES THROUGH THE ACCOUNT AND A PRESUMPTION CAN BE RAISED THAT EXPENSES ONLY IN THE NATURE OF DIRECT EXPENSES HAVE BEEN INCURRED. THE DISCLOSED GROSS PROFIT RATE OF THE AP PELLANT IS 16.78%. THEREFORE, THE PROFITS FROM TRANSACTIONS WO ULD BE RS.4,30,283/-. 3. ANY CASH SHORTAGE WHICH MAY OCCUR IN THE ACCOUNT , I.E. SHORTAGE BETWEEN CASH DEPOSIT AND CASH WITHDRAWALS AS THIS WOULD SIGNIFY DEPOSITS MADE BY THE ASSESSEE. FROM T HE DETAILS PROVIDED BY THE APPELLANT, THIS CASH SHORTA GE IS SEEN TO BE RS.1,03,249/-. 4. ANY PAYMENTS MADE FROM THE ACCOUNT WHICH IS NOT TO AVAILABLE FOR ROTATION AND THEREFORE WOULD NOT BE P ART OF THE ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 5 PEAK THEORY. IT IS SEEN FROM THE DETAILS OF THIS BA NK ACCOUNT PROVIDED BY THE APPELLANT THAT HE HAS MADE PAYMENTS AGGREGATING TO RS.1,79,481/- TO GE COUNTRYWIDE CFS LTD. AND TO CITY FINANCIAL CONSUMER FINANCE FROM THIS AC COUNT WHICH WOULD BE CAPITAL IN NATURE AND NOT AVAILABLE FOR ROTATION. 5. INTEREST EARNED FROM THE ACCOUNT RS.69/- THEREFORE, INCOME OF THE APPELLANT FROM THE UNDISCL OSED ICICI BANK ACCOUNT RS.8,39,832/-. 6. LD. AR SUBMITTED THAT THE UNDISCLOSED SALES AS O BSERVED BY ASSESSING OFFICER AT RS.25,64,333/-. THE UNDISCLOSE D SALES ARE ONLY TO THE EXTENT OF RS.7,88,125/- AND FURTHER AT THE P LACE OF GP RATE APPLIED BY LD. CIT(A) ONLY NET PROFIT @ 4.84% SHOUL D BE APPLIED ON THE UNDISCLOSED SALES OF THE ASSESSEE.. 7. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDE RS OF LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ADMITTED FACT IN THIS CASE BOTH AT T HE END OF ASSESSEE AND THAT OF REVENUE IS THAT THERE WAS UNDISCLOSED B ANK ACCOUNT HELD WITH ICICI BANK HAVING TOTAL CREDITS OF RS.25,64,26 4/- INCLUDING INTEREST CREDITS OF RS.69/-. FURTHER SUBMISSIONS MA DE BY LD. AR OF APPLYING NET PROFIT RATE ON UNDISCLOSED SALES OF RS .7,88,125/- SEEMS TO BE FAR FROM TRUTH AND BASELESS AS THIS BANK ACCO UNT WAS NOT APPEARING IN THE BOOKS OF ASSESSEE AND AS SUCH WE W ILL PROCEED TO DECIDE THE FATE OF TOTAL CREDITS OF RS.25,64,264/- WITH ICICI BANK. ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 6 LD. CIT(A) HAS SUSTAINED ADDITION AT RS.8,39,832/- FROM UNDISCLOSED BANK ACCOUNT WITH ICICI BANK AS FOLLOWS :- I) PEAK OF CREDIT LESS OPENING BALANCE RS.1,26,75 0/- II) GP @ 16.78% OF TRADING TRANSACTIONS AFTER PEAK RS.4,30,283/- III) CASH DEFICIT FROM CASH DEPOSIT & WITHDRAWAL R S.1,03,249/- IV) PAYMENT CAPITAL IN NAME NOT AVAILABLE FOR RELAT ION RS.1,79,481/- V) INTEREST RS. 69/- ----------------------- TOTAL RS.8,39,832/- ------------------------ LD. CIT(A) HAS DEALT THE ISSUE OF UNDISCLOSED CREDI TS OF RS.25,64,264/- HELD WITH ICICI BANK IN CONSONANCE W ITH THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE AND HAS GIVEN P ARTIAL RELIEF TO THE ASSESSEE BY SCALING DOWN SINGLE ADDITION OF RS. 25,64,264/- MADE BY ASSESSING OFFICER INTO FIVE CATEGORIES AS MENTIO NED ABOVE. ASSESSEE HAS RAISED TWO GROUNDS AGAINST ABOVE CATEG ORIZATION OF ADDITION SUSTAINED BY LD. CIT(A) BY WAY OF CHALLENG ING THE TOTAL SUSTAINED ADDITION OF RS.8,39,832/- IN GROUND NO.1 AND AGAIN CHALLENGED SUSTAINED ADDITION OF CASH SHORTAGE OF R S.1,03,249/- AND PAYMENT OF RS.1,79,481/- MADE TO G.E. COUNTRYWIDE B EING CAPITAL IN NATURE. EVEN WHEN THE AMOUNT OF RS.1,03,249/- AND R S.1,79,481/- ARE FORMING PART OF THE COMPOSITE AMOUNT OF RS.8,39 ,832/- MENTIONED IN GROUND NO.1. 9. FROM EXAMINING THE SUSTAINED ADDITION BY LD. CIT (A) WE FIND THAT HE HAS RIGHTLY SUSTAINED ADDITION OF RS.1,26,7 50/- BEING PEAK OF ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 7 CREDIT LESS OPENING BALANCE, INTEREST CREDIT OF RS. 69/-, PAYMENT OF RS.1,79.481/- TO GE COUNTRYWIDE AS THE CAPITAL PAYM ENTS DO NOT FORM PART OF THE BUSINESS CYCLE AND RS.1,03,248/- ON ACC OUNT OF CASH DEFICIT FROM CASH DEPOSIT AND WITHDRAWAL AS THE SOU RCE OF CASH DEFICIT WAS NOT ASCERTAINABLE FROM THE CASH FLOW STATEMENT. 10. AS REGARDS SUSTAINED ADDITION OF RS.4,30,283/- CALCULATED BY LD. CIT(A) @ 16.78% OF TRADING TRANSACTIONS, WE FIND TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS APART FROM THE TRE ATMENT OF UNDISCLOSED CREDITS IN THE UNDISCLOSED BANK ACCOUNT OF RS.25,64,264/- ASSESSING OFFICER HAS NOT RAISED ANY OBJECTION IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND HAS ALSO NOT INVOKED THE PROVISIONS OF SECTION 143 AND HAS ACCEP TED THE PROFITS DISCLOSED BY THE ASSESSEE ON ITS TURNOVER. 11. HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V S. PRESIDENT INDUSTRIES (2002) 124 TAXMAN 654 (GUJ) HAS HELD AS UNDER :- 3. HAVING PERUSED THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER, THE ORDER MADE BY THE COMMISSIONER (APPEAL S) AND THE TRIBUNAL, WE ARE SATISFIED THAT THE TRIBUNAL WAS JU STIFIED IN REJECTING THE APPLICATION U/S 256(1). IT CANNOT BE A MATTER O F AN ARGUMENT THAT THE AMOUNT OF SALES BY ITSELF CANNOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAS NOT DISCLOSED THE SALES. THE SALES ONLY REPRESENT THE PRICE RECEIVED BY THE SELLER OF THE GOODS FOR T HE ACQUISITION OF WHICH IT HAS ALREADY INCURRED THE COST. IT IS THE R EALIZATION OF EXCESS OVER THE COST INCURRED THAT ONLY FORMS PART OF THE PROFIT INCLUDED IN THE CONSIDERATION OF SALES. THEREFORE, UNLESS THERE IS A FINDING TO THE EFFECT THAT INVESTMENT BY WAY OF INCURRING COST IS ACQUIRING GOODS WHICH HAVE BEEN SOLD HAS BEEN MADE BY THE ASSESSEE AND THAT HAS ALSO NOT BEEN DISCLOSED, THE QUESTION, WHETHER ENTI RE SUM OF UNDISCLOSED SALE PROCEEDS CAN BE TREATED AS INCOME OF THE RELEVANT ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 8 ASSESSMENT YEAR ANSWERS BY ITSELF IN THE NEGATIVE. THE RECORD GOES TO SHOW THAT THERE IS NO FINDING NOR ANY MATERIAL H AS BEEN REFERRED TO ABOUT THE SUPPRESSION OF INVESTMENT IN ACQUIRING TH E GOODS WHICH HAVE BEEN FOUND SUBJECT OF UNDISCLOSED SALES. BY EXAMINING THE FACTS OF THE CASE, IN THE LIGHT OF ABOVE REFERRED JUDICIAL PRONOUNCEMENT WE FIND THAT IN THE CASE UND ER APPEAL ALSO THERE HAS BEEN NO FINDING BY THE ASSESSING OFFICER ABOUT THE DEFECTS OF BOOKS OF ACCOUNTS AS WELL AS DETECTION OF UNDISC LOSED INVESTMENT WHICH MAY HAVE BEEN MADE BY THE ASSESSEE FROM THE U NDISCLOSED SALES. IN THESE CIRCUMSTANCES IT WILL NOT BE JUSTIF IABLE TO IMPOSE GP @ 16.78% ON THE UNDISCLOSED TURNOVER WHEN SEPARATE AD DITIONS HAS ALREADY BEEN MADE FOR PEAK CREDIT, CASH DEFICIT AND PAYMENTS TOWARDS CAPITAL NATURE OF EXPENDITURE AND AS SUCH N ET PROFIT RATE SHOWN BY THE ASSESSEE ON THE DISCLOSED TURNOVER SHO ULD BE APPLIED ON THE UNDISCLOSED CREDITS OF RS.25,64,264/- AND BY APPLICATION OF NET PROFIT RATE OF 4.8% ON RS.25,64,264/- THE SUSTAINED ADDITION OF RS.4,30,283/- WILL SCALE DOWN TO RS.1,24,110/-. IN OTHER WORDS, ASSESSEE WILL GET RELIEF OF RS.3,03,173/- AND THE T OTAL SUSTAINED ADDITION OF RS.8,39,832/- REFERRED IN GROUND NO.1 W ILL BE REDUCED TO RS.5,33,659/-. IN THE RESULT, GROUND NO.1 IS PARTLY ALLOWED AND GROUND NO.2 IS DISMISSED. 12. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ACTION OF AO IN RESPECT OF ADDITION MADE OF RS.2,25 ,977/- IN RESPECT OF ACCOUNT WITH SURAT PEOPLES CO OPERATI VE BANK LTD. BOTH THE LOWER AUTHORITIES FAILED TO APPR ECIATE THAT THE IMPUGNED ACCOUNT WAS DISCLOSED IN THE BOOK S OF THE APPELLANT AND THE CLOSING BALANCE WAS INCORPORA TED IN ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 9 THE BALANCE SHEET. LD. CIT(A) OUGHT TO HAVE DELETED ADDITION MADE OF DISCLOSED ACCOUNT. 13. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASS ESSING OFFICER ON VERIFICATION OF THE BANK ACCOUNT HELD TH AT SURAT PEOPLES CO-OP. BANK LTD. FOUND THAT THE CLOSING BALANCE OF THE BANK ACCOUNT WAS DULY REFLECTED IN THE BALANCE SHEET BUT THE TRA NSACTIONS ENTERED INTO THIS BANK ACCOUNT DURING THE YEAR WERE NOT SHO WN IN THE BOOKS OF ACCOUNT AND TOTAL OF SUCH CREDIT NOT SHOWN IN THE B OOKS OF ACCOUNT IS RS.2,25,977/- OUT OF WHICH MAJORITY ARE BY CASH DEP OSIT AND THE WITHDRAWALS FROM THIS ACCOUNT HAVE BEEN USED FOR IS SUING CHEQUES TO KOTAK SECURITIES LTD. FOR THE PURPOSE OF SHARE TRAD ING. 14. APPEAL BEFORE CIT(A) COULD NOT BRING ANY RELIEF TO THE ASSESSEE. ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 15. THE LD. AR TRIED TO IMPRESS UPON THAT THIS ACCO UNT SHOULD NOT BE TREATED AS UNDISCLOSED AS THE CLOSING BALANCE OF TH IS ACCOUNT WERE FORMING PART OF THE BANK BALANCE SHOWN IN THE BALAN CE SHEET AND THE CREDITS IN THIS ACCOUNT ARE ALSO PART OF THE UNDISC LOSED TURNOVER. THEREFORE, HE SUBMITTED THAT THE NET PROFIT RATE OF 4.8% MAY BE APPLIED ON THE UNDISCLOSED CREDIT OF RS.2,25,977/-. 16. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF LOWER AUTHORITIES. ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 10 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND FIND THAT ASSESSEE HAS ACCEPTED THAT THE CREDITS IN THE DISCLOSED BANK ACCOUNT WERE NOT SHOWN IN THE BOOKS OF ACCOUNT AND DID NOT PUT FORTH ANY PROPER EXPLANATION FOR THESE CASH DEPOSITS IN ITS ACCOUNT AND FURTHER MOST OF THE WITHDRAWALS FROM TH IS BANK ACCOUNT HAVE BEEN MADE FOR PAYMENT TO KOTAK SECURITIES LTD. FOR SHARE TRADING BUSINESS. THIS MEANS THAT FLOW OF FUNDS IN THIS ACCOUNT WAS NOT AT ALL RELATED TO THE BUSINESS OF JOB OF JARI K ASAB DONE BY THE ASSESSEE AND, THEREFORE, THE CONTENTION OF THE LD. AR FOR APPLYING NET PROFIT RATE ON THIS AMOUNT OF RS.2,25,977/- CANNOT BE ACCEPTED AND ACCORDINGLY WE ARE OF THE VIEW THAT LD. CIT(A) HAS RIGHTLY CONFIRMED THIS ADDITION OF UNEXPLAINED INVESTMENT IN THE HAND S OF THE ASSESSEE AND AS SUCH THIS GROUND OF THE ASSESSEE IS DISMISSE D. 18. GROUND NO.4 OF ASSESSEES APPEAL READS AS UNDER :- 4. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ACTION OF AO IN RESPECT OF ADDITION MADE OF RS.2,15,531/- AS UNACCOUNTED FIXED DEPOSITS AS INCOME U/S 69 OF THE ACT. LD. CIT(A) FAILED TO APPRECIATE THAT THE DEPOSITS BELON GED TO THIRD PARTIES AND THAT ALSO PERTAINING TO ANOTHER YEAR NO T CHARGEABLE AS INCOME OF THE YEAR UNDER CONSIDERATION. LD. CIT( A) OUGHT TO HAVE DELETED ADDITION MADE BY AO. 19. THE LD. AR SUBMITTED THAT THIS AMOUNT OF FDR BE LONGED TO THIRD PARTIES AND ARE NOT PERTAINING TO THE YEAR UNDER AP PEAL. 20. THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHOR ITIES. ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 11 21. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT DURING ASSESSMENT PROCEEDIN GS ASSESSING OFFICER FOUND THAT ASSESSEE HAD MADE INVESTMENTS IN CASH CERTIFICATES IN VARIOUS BANKS IN THE FORM OF FIXED DEPORTS AND THESE FIXED DEPOSITS WERE JOINTLY HELD BY THE ASSESSEE WI TH EITHER HIS FATHER OR MOTHER OR HIS WIFE AND THE PHOTO OF THE ASSESSEE WAS APPEARING ON THESE FIXED DEPOSITS AND THESE FIXED DEPOSITS WE RE NOT REFLECTED IN THE BALANCE SHEET OF ANY OF THE OTHER JOINT HOLD ERS AND THEREFORE, THIS AMOUNT WAS ADDED AS UNEXPLAINED INVESTMENTS. E VEN BEFORE LD. CIT(A) NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESS EE TO SHOW THAT HE WAS NOT THE ACTUAL BENEFICIARY OF THE FIXED DEPO SITS AND WAS UNABLE TO PROVE THAT FIXED DEPOSITS RELATED TO ANY OTHER YEAR AND THEREFORE, LD. CIT(A) DID NOT GIVE ANY RELIEF TO TH E ASSESSEE. EVEN BEFORE US ALSO NOTHING CONTRARY HAS BEEN PRODUCED T O PROVE THAT THESE FIXED DEPOSITS RELATE TO ANY OTHER YEAR OR FI XED DEPOSITS ARE NOT RELATED TO THE ASSESSEE. THEREFORE, IT SEEMS TH AT ASSESSEE HAS NOTHING TO SAY MORE TO SUBSTANTIATE ITS GROUND AND IN THESE CIRCUMSTANCES, WE DISMISS THIS GROUND OF ASSESSEE. 22. GROUND NO. 5 READS AS UNDER :- 5. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN NOT CONSIDERING VARIOUS EXPLANATIONS, SUBMISSIONS AND E VIDENCES PLACED ON RECORD BY THE APPELLANT IN ITS PROPER PER SPECTIVE. THIS ACTION OF BOTH THE LOWER AUTHORITIES DESERVES TO BE QUASHED. 23. THIS GROUND IS OF GENERAL NATURE AND NEEDS NO A DJUDICATION. ITA NO. 201/AHD/2012 ASST. YEAR 2008-09 12 24. GROUND NO. 6 IS REGARDING LEVY OF INTEREST U/S 234A/234B/234C & 234D OF THE ACT. THIS GROUND IS CONSEQUENTIAL. 25. GROUND NO.7 IS REGARDING INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT. THIS IS PREMATURE. 24. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 18/12/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 17/12/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 17/12/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 18/12/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: