ITO, Dausa V. SHRI AMAR NARAIN GUPTA, Dausa

ITA 21/JPR/2011

• Counselvise Citation: 2123114 RSA 2011
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: S L PODDAR
• Keywords: Unexplained investment; Business income; Loose papers
• Section: 133A; 69

Judgement Text

1 ITA 21(4)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 21& 22/JP/2011 ASSTT. YEAR : 2003-04 & 04-05. THE INCOME-TAX OFFICER, VS. SHRI AMAR NARAIN GUP TA, WARD DAUSA. PROP. M/S. CHOUDHARY IRON TRADERS, AGRA ROAD, DAUSA. (APPELLANT) (RESPONDENT) C.O. NOS. 32 & 33/JP/2011 ( ARISING OUT OF ITA NOS. 21 & 22/JP/2011 ) ASSTT. YEARS : 2003-04 & 04-05. SHRI AMAR NARAIN GUPTA, VS. THE INCOME-TAX OFFICE R, DAUSA. WARD DAUSA. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : MS. ROSHANTA MEENA RESPONDENT BY : SHRI S.L. PODDAR ORDER DATE OF ORDER : 05/08/2011. PER R.K. GUPTA, J.M. THESE ARE TWO APPEALS BY DEPARTMENT AND TWO CROSS OBJECTIONS BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEA R 2003-04 AND 04-05. 2. COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER. 3. THE LD. D/R PLACED RELIANCE ON THE ORDER OF THE AO. 2 4. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). IT WAS FURTHER SUBMITTED BY LD. A/R T HAT IF THE APPEALS OF THE DEPARTMENT ARE DISMISSED THEN CROSS OBJECTIONS OF THE ASSESSEE MAY BE TREATED AS WITHDRAWN. 5. NOW THE APPEALS OF THE DEPARTMENT ARE DISPOSED O FF IN THE FOLLOWING MANNER. 6. FIRST ISSUE IN BOTH THE APPEALS OF THE DEPARTMEN T RELATES TO IN MAKING HIS OWN ESTIMATION BY THE LD. CIT (A) OF UNACCOUNTED SALE AND IN DIRECTING TO APPLY G.P. RATE OF 5.5%. 7. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND PROPRIETOR OF M/S. CHOUDHARY IRON TRADERS WHICH IS DEALING IN TRA DING OF IRON TOR/ SARIYA/ IRON SHEETS/OTHER IRON ITEMS/HARDWARES ETC. A SURVEY UN DER SECTION 133A WAS CONDUCTED ON 05.12.2005 AT THE BUSINESS PREMISES OF THE ASSESSEE AND THE ASSESSMENT OF EARLIER YEARS I.E.1999-00 TO 2005-06 WERE REOPENED AND COMPLETED BY MAKING VARIOUS ADDITIONS ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE OF SU RVEY. 7.1. THEREAFTER ASSESSEE PREFERRED APPEAL BEFORE LD . CIT (A) FOR ALL THE SIX YEARS AND SINCE GROUNDS ARE COMMON IN ALL THE SIX YEARS, THE LD. CIT (A) HAS DECIDED THE APPEALS OF THE ASSESSEE TOGETHER. 8. FOR ASSESSMENT YEARS 1999-2000 TO 2002-03 THE AP PEAL EFFECT IN THE APPEALS OF THE DEPARTMENT WAS LESS THAN RS. 2,00,000/-. THERE FORE, THEY HAVE ALREADY BEEN DISMISSED BY THE TRIBUNAL IN LIMINI BY A SEPARATE ORDER. CRO SS OBJECTIONS FILED BY THE ASSESSEE WERE WITHDRAWN. THEREFORE, THEY HAVE ALSO BEEN DISPOSED OFF BY THE TRIBUNAL ALONG WITH THE APPEALS OF THE DEPARTMENT MENTIONED ABOVE. 3 9. AS PER ASSESSING OFFICER THE ASSESSEE HAS SUBMIT TED HIS WORKING ON THE BASIS OF LOOSE PAPER SEIZED DURING THE COURSE OF SURVEY AND AS PER ASSESSEE'S WORKING THE YEAR WISE UNACCOUNTED SALES ARE AS UNDER - A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 TOTAL SALES 6298 14443 6085 121780 1608843 4927592 9.1. THE ASSESSING OFFICER WAS NOT SATISFIED WITH T HE WORKING GIVEN BY THE ASSESSEE AND SHE DRAWN AN INFERENCE FROM THE WORKING FIGURES BY THE ASSESSEE THAT THE FIGURE OF UNACCOUNTED SALES ARE INCREASING YEAR TO YEAR. THER EFORE SHE ESTIMATED THE SALES FOR THE ASSESSMENT YEAR 2004-05 AT RS. 50 LACS AGAINST RS. 49,27,252/- AND THEREAFTER SHE REDUCED 50% IN EACH PRECEDING YEAR AND SHE ESTIMATE D THE SALES FOR ALL THE YEARS AS UNDER A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 TOTAL ESTIMATED SALES 156250 312500 625000 1250000 2500000 5000000 9.2. AFTER ESTIMATING THE SALES THE ASSESSING OFFIC ER HAS APPLIED GP RATE OF 5.60% ON SUCH ESTIMATED SALES AND MADE ADDITION OF RS. 8,750 /- IN THE ASSESSMENT YEAR 1999-00. 9.3. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE SUBMITS THAT THERE IS NO BASIS OF ESTIMATING THE SALES ON THE BASIS OF ONE YEAR AN D INDEXING BACK BY ESTIMATING THE SALES FOR PRECEDING YEAR. THE ASSESSING OFFICER HAS NO JUSTIFIED HER ACTION BY A SINGLE REASON FOR ESTIMATING THE SALES IN ALL THE Y EARS. IT IS THE SETTLED POSITION OF LAW THAT IN CASE OF SURVEY OR SEARCH ONLY SEIZED MA TERIAL SHOULD BE BASIS FOR ANY ADDITION AND NO FIGURE CAN BE ESTIMATED WITHOUT ANY LOGICAL REASON. 4 10. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, THE LD. CIT (A) GAVE FOLLOWING FINDING AT PAGES 10 & 11 OF HIS ORDER ARE AS UNDER :- I HAVE CONSIDERED THE SUBMISSION MADE BY THE AR AN D FOUND SUBSTANCE IN HIS CONTENTION THAT THE ASSESSING OFFICER HAS MADE ESTIMATION BY INTERPOLATION SALE FIGURES AND ESTIMATED AT THE VERY HIGHER SIDE WITHOUT CONSIDERING THE ACTUAL FIGURE OF SALES WORKED OUT BY THE ASSESSEE ON THE B ASIS OF DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY. THE APPREHENSION OF TH E ASSESSING OFFICER MAY BE CORRECT BUT SHE HAD NOT BROUGHT ON RECORD ANY EVIDE NCE IN SUPPORT OF HER ESTIMATION. THEREFORE CONSIDERING THE FACTS OF THE CASE AND TOTALITY OF THE CIRCUMSTANCES I ESTIMATE THE FIGURES OF SALES WHICH IS MORE LOGICAL AND NEAR TO FIGURES WORKED OUT BY THE ASSESSEE ON THE BASIS OF IMPOUNDED DOCUMENTS AS UNDER A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 TOTAL SALES WORKED OUT BY THE ASSESSEE 6298 14443 6085 121780 1608843 4927592 FIGURE OF SALES ESTIMATED 10000 20000 10000 150000 1800000 5000000 THE ABOVE SALE FIGURE IS ESTIMATED AFTER CONSIDERIN G THE ASSESSEES REPLY AS WELL AS CONSIDERING THE ASSESSMENT ORDER TO MEET OU T END OF THE JUSTICE. THE QUESTION OF APPLICATION OF GP RATE CAME INTO THE PI CTURE. THE ASSESSEE IS A RETAIL TRADER ENGAGED IN THE TRADING OF IRON AND STEEL. WH EN THE ASSESSEE HIMSELF HAS DECLARED A HIGHER GP RATE OF 5.5% ON DECLARED SALES , THE ASSESSING OFFICER IS HEREBY DIRECTED TO APPLY THE GP RATE OF 5.5% ON SUC H UNACCOUNTED SALES ESTIMATED IN ABOVE CHART FOR ALL THE ASSESSMENT YEARS EXCEPT A.Y. 99-2000 AND AY 2000-01 WHERE THE ASSESSEE HIMSELF APPLIED G.P. RATE 01 5 .6%. 5 11. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND NO UNREASONABLENESS IN THE FINDING OF LD. CIT (A). TH E LD. CIT (A) HAS WORKED OUT THE ESTIMATION OF SALES IN A VERY LOGICAL MANNER AND TH EREAFTER HAS APPLIED G.P. RATE OF 5.5% AGAINST 5.6% APPLIED BY AO. THE FINDING OF LD. CIT (A), IN OUR CONSIDERED VIEW, ARE FINDING OF FACT, THEREFORE, THEY DO NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY THE FINDINGS OF LD. CIT (A) FOR BOTH THE YEARS ARE CONFIRMED ON THIS ISSUE. 12. SECOND ISSUE RELATES TO RESTRICTING UNEXPLAINED INVESTMENT UNDER SECTION 69 IN UNACCOUNTED PURCHASES FROM RS. 2,84,500/- TO RS. 63 ,479/- FOR ASSESSMENT YEAR 2003-04 AND FROM RS. 2,44,500/- TO RS. 1,47,190/- FOR ASSES SMENT YEAR 2004-05. 13. THE BRIEF FACTS DISCUSSED BY THE AO AND SUBMISS IONS OF THE ASSESSEE AND THEREAFTER FINDING OF LD. CIT (A) ARE GIVEN AT PAGE S 11 AND 12 OF HIS ORDER WHICH ARE AS UNDER :- THE ASSESSING OFFICER HAS AFTER ESTIMATING THE TU RNOVER AND PROFIT HAS ALSO MADE THE ADDITION U/S 69 FOR UNEXPLAINED INVES TMENT FOR DOING THE BUSINESS WHICH WAS NOT ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS. THE ASSESSING OFFICER AFTER ESTIMATING THE TURNOVER STATE AWAY ES TIMATED THE UNEXPLAINED INVESTMENT @ 20% ON UNACCOUNTED TURNOVER. SHE DEALS ON THIS ISSUE ON PAGE 52 AND 53 OF THE ASSESSMENT ORDER. SHE HAS ALSO ALLOWE D THE SET OFF OF EARLIER YEARS ADDITION UNDER THE SAME HEAD. AS PER ASSESSING OFFI CER THE ADDITION IN ALL THE YEARS WERE MADE AS UNDER A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 TOTAL ESTIMATED SALES 156250 312500 625000 1250000 2500000 5000000 20% ESTIMATION OF INVESTMENT 31250 62500 125000 250000 500000 1000000 SET OFF 0 31250 62500 125000 250000 500000 6 ALLOWED BY THE A.O. ON ACCOUNT OF EARLIER YEARS INVESTMENT ASSESSING OFFICER HAS ALSO ALLOWED SET OFF OF GP AD DITION MADE IN THE EARLIER YEAR AND THE FINAL ADDITIONS ARE AS UNDER A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 ADDITIONS 31250 22500 36250 79500 284500 244500 DURING THE APPELLATE PROCEEDING THE ASSESSEE OBJECT ED THE ESTIMATION OF INVESTMENT AND HIS CONTENTION IS THAT THE ASSESSEE WAS MAINTAINING A HIGH VOLUME / QUANTITY OF STOCK IN THE REGULAR COURSE OF BUSINE SS AS PER BOOKS OF ACCOUNTS HE NEEDS NOT TO MAKE FURTHER INVESTMENTS. THE ASSESSEE MADE THE UNACCOUNTED SALES OUT OF ACCOUNTED STOCK AND AFTER RELEASING THE SALE S VALUE HE FURTHER PURCHASED THE STOCK TO COMPENSATE THE STOCK. HE ALSO DRAW ATTENTI ON ON THE FIGURES/LEVEL OF THE STOCK MAINTAINED BY THE ASSESSEE AND CLOSING STOCK REFLECTED IN THE TRADING AND BALANCE SHEET OF ASSESSEE FOR DIFFERENT-DIFFERENT Y EARS. AS PER BALANCE SHEET THE FIGURES OF CLOSING STOCK ARE AS UNDER A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 CLOSING STOCK 3713071 4043821 3279971 4617551 4856981 3877551 I HAVE CONSIDERED THE MATTER CAREFULLY AND IT IS SE EN THAT ASSESSEE IS MAINTAINING SUFFICIENT QUANTITY OF STOCK EVERY MONT H AND IT IS POSSIBLE TO SELL STOCK WITHOUT ENTERING THE SAME IN THE BOOKS OF ACC OUNTS AND AGAIN PURCHASED THE SAME WHEN THE SALES VALUE REALIZED AND IT IS ALSO L OGICAL WHEN THERE IS STOCK IN THE REGULAR BOOKS OF ACCOUNTS WHY THE ASSESSEE WOULD IN VEST IN STOCK FOR MAKING UNACCOUNTED SALES. HOWEVER, KEEPING IN VIEW OF THE CAPITAL EMPLOYED IN DISCLOSED BUSINESS RATIO, IS APPLIED AND ACCORDINGLY, CAPITAL EMPLOYED IN UNACCOUNTED BUSINESS IS WORKED OUT AS UNDER :- 7 A.Y. 1999-00` 2000-01 2001-02 2002-03 2003-04 2004- 05 ESTIMATED CAPITAL EMPLOYED 214 527 305 5023 63479 147190 THE ABOVE ADDITION UNDER THE HEAD CAPITAL EMPLOYED FOR UNACCOUNTED BUSINESS IS CONFIRMED AND REMAINING ADDITION UNDER THIS HEAD IS DELETED. 14. AFTER GOING THROUGH THE ORDERS OF THE AO AND LD . CIT (A) AGAIN WE FIND NO UNREASONABLENESS IN THE FINDING OF LD. CIT (A) WHIC H REMAINED UNCONTROVERTED ALSO AS LD. D/R HAS SIMPLY PLACED RELIANCE ON THE ORDER OF AO. THE AO AFTER ESTIMATING THE TURNOVER STRAIGHTAWAY ESTIMATED THE UNEXPLAINED INVESTMENT @ 20% OF UNACCOUNTED TURNOVER FOR EVERY YEAR THOUGH SHE HAS ALLOWED SET OFF OF EARLIE R YEARS ADDITION ON ACCOUNT OF INVESTMENT MADE IN EARLIER YEAR. THE LD. CIT (A) B Y FINDING OUT THAT THE ASSESSEE IS MAINTAINING SUFFICIENT QUANTITY OF STOCK EVERY MONT H AND IT WAS POSSIBLE TO SELL STOCK WITHOUT ENTERING THE SAME IN THE BOOKS OF ACCOUNT A ND AGAIN PURCHASED THE SAME WHEN THE SALES VALUE REALIZED. THE LD. CIT (A) HAS FURT HER OBSERVED THAT IT IS ALSO LOGICAL WHEN THERE IS STOCK IN THE REGULAR BOOKS OF ACCOUNT WHY THE ASSESSEE WOULD INVEST IN STOCK FOR MAKING UNACCOUNTED SALES. HOWEVER, KEEPING IN VIEW OF THE CAPITAL EMPLOYED IN DISCLOSED BUSINESS RATIO, THE LD. CIT (A) ACCORDING LY MADE HIS OWN ESTIMATE ON THE BASIS OF CAPITAL EMPLOYED IN THE DISCLOSED BUSINESS. CHAR T OF THE ESTIMATED CAPITAL EMPLOYED HAS BEEN TABULATED BY LD. CIT (A) IN HIS ORDER AT P AGE 12 WHICH IS REPRODUCED SOMEWHERE ABOVE IN THIS ORDER ALSO. IN OUR CONSIDERED VIEW TH E LD. CIT (A) WAS JUSTIFIED IN ESTIMATING THE INVESTMENT FOR UNACCOUNTED PURCHASES ON THE BASIS OF RATIO OF THE CAPITAL 8 EMPLOYED IN DISCLOSED BUSINESS. THEREFORE, WE SEE NO UNREASONABLENESS IN THE ORDER OF LD. CIT (A). ACCORDINGLY, WE CONFIRM HIS ORDER ON THIS ISSUE ALSO. 15. NEXT ISSUE IN BOTH THE APPEALS IS AGAINST IN DI RECTING TO APPLY AVERAGE G.P. RATE OF PRECEDING THREE YEARS. 16. THIS ISSUE WE HAVE ALREADY DECIDED WHILE DISPOS ING OFF GROUND NO. 1 WHERE WE HAVE CONFIRMED THE DIRECTION OF LD. CIT (A) TO APPL Y G.P. RATE OF 5.5%. HOWEVER, AS THIS GROUND IS TAKEN INDEPENDENTLY AGAIN, WE SEE NO REAS ONABLENESS IN THE ORDER OF LD. CIT (A). THE ASSESSEE HAS SHOWN G.P. RATE AT 4.70% FOR ASSESSMENT YEAR 2004-05 AND AT 5.51% IN ASSESSMENT YEAR 2003-04 AND FOR ASSESSMENT YEAR 2002-03 THE ASSESSEE HAS DISCLOSED G.P. RATE AT 5.50% AND BY TAKING AVERAGE OF GROSS P ROFIT OF LAST THREE YEARS, THE LD. CIT (A) DIRECTED TO APPLY G.P. RATE OF 5.5%. THEREFORE, WE SEE NO REASON TO HOLD THAT G.P. RATE APPLIED BY LD. CIT (A) AT 5.5% WAS NOT REASONABLE. ACCORDINGLY THIS GROUND FOR BOTH THE YEARS IS ALSO REJECTED. 17. NEXT GROUND IN BOTH THE APPEALS IS AGAINST REST RICTING ADDITION ON ACCOUNT OF HOUSEHOLD WITHDRAWAL FROM RS. 40,830/- TO RS. 20,00 0/- FOR ASSESSMENT YEAR 2004-05 AND FROM RS. 37,446/- TO RS. 19,000/- FOR ASSESSMENT YE AR 2003-04. 18. THIS IS A PETTY RELIEF ALLOWED BY LD. CIT (A). THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE FINDING OF LD. CIT (A). ONE MOR E REASON FOR UPHOLDING THAT CERTAIN ADDITIONS HAVE BEEN CONFIRMED IN TRADING ACCOUNT AL SO. THEREFORE, WE CONFIRM THE FINDING OF LD. CIT (A) IN RESPECT TO THIS GROUND ALSO FOR B OTH THE YEARS. 19. NEXT ISSUE FOR ASSESSMENT YEARS 2003-04 AND 04- 05 IS AGAINST RESTRICTING DISALLOWANCE FROM SHOP EXPENSES TO 5% FROM 10% MADE BY AO. 9 20. THE ASSESSING OFFICER HAS MADE THE ADDITION BY DISALLOWING 10% OF TOTAL EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF TELE PHONE EXPENSES, SHOP EXPENSES, VEHICLE REPAIR EXPENSES AND DEPRECATION OF JEEP. TH E ASSESSING OFFICER HAS MENTIONED REGARDING PERSONAL USE AND NON MAINTENANCE OF OTHER RECORDS IN RESPECT OF EXPENDITURE. 21. THE AR HAS SUBMITTED THAT WHOLE EXPENDITURE IS EXCLUSIVELY FOR THE BUSINESS PURPOSES AND NO PERSONAL USE OF EXPENDITURE IS INVO LVED. THE PERCENTAGE OF EXPENDITURE IN COMPARISON TO TURNOVER SHOWN AND PROFIT DECLARED IS VERY NOMINAL THEREFORE THE DISALLOWANCE ON THIS ACCOUNT DESERVES TO BE DELETED . 22. AFTER CONSIDERING THE SUBMISSION OF AR THE DISA LLOWANCE MADE THE ASSESSING OFFICER REDUCED TO 5% INSTEAD OF 10% MADE BY THE ASSESSING OFFICER. 23. AFTER CONSIDERING THE ORDERS OF AO AND LD. CIT (A) AGAIN WE SEE NO REASON TO INTERFERE WITH THE FINDING OF LD. CIT (A) WHO HAS R EDUCED THE DISALLOWANCE AS THE AO MADE DISALLOWANCE ON ADHOC BASIS AND LD. CIT (A) FO UND THAT ADHOC DISALLOWANCE IS ON HIGHER SIDE. THEREFORE, THEY WERE REDUCED TO 5% AGA INST 10% MADE BY AO. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT (A) IN THIS RESPECT ALSO. 24. THE NEXT ISSUE IN ASSESSMENT YEARS 2004-05 AND 03-04 IS AGAINST DELETION OF ADDITION OF RS. 4,06,341/- AND RS. 67,576/- RESPECT IVELY ON ACCOUNT OF INTEREST ACCRUED. 25. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE WA S DOING TWO SEPARATE BUSINESS ONE OF IRON TRADING AND ANOTHER IS MONEY LENDING. T HE ASSESSEE WAS MAINTAINING MERCANTILE SYSTEM OF ACCOUNTING IN IRON TRADING WHE REAS HE HAS DECLARED INCOME OF MONEY LENDING BUSINESS ON RECEIPTS BASIS I.E. CASH BASIS. THE ASSESSING OFFICER HAS ESTIMATED THE INTEREST INCOME ON ACCRUAL BASIS AND MADE THE ADDITION AS UNDER 10 A.Y. 1999-00 2000-01 2001-02 2002-03 2003-04 2004-0 5 ADDITION 0 3350 1980 28628 67576 406341 THE ASSESSING OFFICER HAS GIVEN HER FINDING ON PAGE 46 IN PARA C.7 IN THE ASSESSMENT ORDER. SHE ALSO GAVE A CALCULATION OF INTEREST ACCR UED IN ANNEXURE XYZ-2 OF THE ASSESSMENT ORDER. IN THIS CALCULATION THE ASSESSING OFFICER HAS CALCULATED THE INTEREST ON THE BALANCE OF OUTSTANDING DEBTORS ON ACCRUAL BASIS @ 15% TO 24%. 26. DURING THE APPELLATE PROCEEDINGS THE AR OF THE ASSESSEE SUBMITTED THAT AS PER SETTLED PRINCIPLE OF LAW AND IRS PUBLICATION 583 RE GARDING ACCOUNTING METHOD WHEN AN ASSESSEE OWN MORE THAN ONE BUSINESS HE CAN USE A DI FFERENT ACCOUNTING METHOD FOR EACH BUSINESS AND ACCORDINGLY THE ASSESSEE HAS MAINTAINE D MERCANTILE SYSTEM FOR IRON BUSINESS AND CASH SYSTEM FOR MONEY LENDING BUSINESS WHICH IS PREVAILING SYSTEM IN MONEY LENDING BUSINESS. THE ASSESSEE ALSO SUBMITS THAT THE ASSESS EE HAS MADE ADDITION ON ACCRUAL BASIS WHERE AS THE ASSESSEE HAS PAID TAX ON INTEREST INCO ME ON RECEIPT BASIS AND THE ASSESSING OFFICER HAS CHARGED TAX ON THE SAME INCOME TWICE. T HE ASSESSEE ALSO GIVEN SOME EXAMPLE WHERE THE ASSESSING OFFICER HAS CHARGED INTEREST IN EARLIER ASSESSMENT YEAR AND THE ASSESSEE HAS OFFERED SAME INCOME IN THE NEXT YEAR A ND PAID TAXES. SOME OF THE EXAMPLES ARE AS UNDER (I) IN THE CASE OF KAILASH CHAND ASSESSING OFFICER HAS ACCRUED INTEREST FOR RS. 29,420/- IN ASSESSMENT YEAR 2003-04 WHEREAS THE ASSESSEE HAS PAID TAX ON TOTAL INTEREST OF RS. 66,000/- IN ASSESSMENT YEAR 2004-05 ON RECEIPT BASIS. (II) IN THE CASE OF GIRRAJ ASSESSING OFFICER HAS AC CRUED INTEREST FOR RS. 18,000/- IN ASSESSMENT YEAR 2003-04 WHEREAS THE ASS ESSEE HAS PAID TAX ON TOTAL INTEREST OF RS. 21,240/- IN ASSESSMENT YEAR 2 004-05 ON RECEIPT BASIS. 11 THE AR OF THE ASSESSEE HAS ALSO POINTED OUT CERTAIN EXAMPLE IN THE ANNEXURE LIKE RAM AVTAR KHUTETA, SATYA NARAIN MEDICAL STORE, BHAG IRATH AND MATHURESH JAISWAL WHERE THE POSITION IS SAME. 27. AFTER CONSIDERING THE SUBMISSIONS, THE LD. CIT (A) GAVE THE FOLLOWING FINDING :- I HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LEARNED AR AND ALSO PERSUED THE RECORD AND MATERIAL ON RECORD AND FIND THAT IF ANY PERSON OWN MORE THAN ONE BUSINESS HE CAN USE A DIFFERENT ACCOUNTING METHOD AS PER SMALL BUSINESS NOTES IN IRS PUBLICATION NO. 583 WHICH IS FOR ACCOU NTING METHOD. THE ASSESSEE HAS DECLARED THE INTEREST INCOME ON RECEIPTS BASIS AND THE ASSESSING OFFICER HAS NOT DOUBTED ON THE CORRECTNESS OF INTEREST INCOME D ECLARED BY THE ASSESSEE. THEREFORE THERE IS NO OCCASION TO MADE ADDITION ON ACCRUAL BASIS SPECIALLY IN THE BUSINESS OF MONEY LENDING WHERE THE PREVAILING TREN D FOR MAINTAINING BOOKS OF ACCOUNTS IS ON CASH BASIS. THEREFORE THE ADDITION M ADE ON THIS ACCOUNT IN ALL THE YEARS IS HEREBY DELETED. 28. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND NO INFIRMITY IN THE FINDINGS OF LD. CIT (A) WHICH ARE REPRODUCED SO MEWHERE IN THIS ORDER. NEITHER THIS FINDING COULD BE CONTROVERTED BY LD. D/R NOR ANY OT HER MATERIAL BROUGHT ON RECORD TO HOLD OTHERWISE. THEREFORE, WE CONFIRM THE FINDING OF LD. CIT (A) IN THIS RESPECT ALSO. 29. NEXT ISSUE IN THE APPEALS OF THE DEPARTMENT IS THAT THE ORDER OF LD. CIT (A) IS PERVERSE TO THE INTEREST OF REVENUE. 30. HOW THE ORDER OF LD. CIT (A) IS PERVERSE, NOTHI NG HAS BEEN BROUGHT ON RECORD. IN OUR CONSIDERED VIEW THE LD. CIT (A) HAS GIVEN FINDI NG OF FACT IN RESPECT OF EACH AND EVERY GROUND RAISED BEFORE HIM. THE LD. CIT (A) HAS PASS ED A SPEAKING ORDER ALSO TAKING INTO CONSIDERATION THE ORDER OF AO AS WELL AS SUBMISSION S OF THE ASSESSEE AND THEREAFTER 12 ANALYZING THE ISSUE ON THE BASIS OF FACTS OF THE PR ESENT CASE AND THEN HAS GIVEN HIS FINDING. THIS FINDING OF LD. CIT (A) REMAINED UNCONTROVERTED AS LD. D/R HAS SIMPLY RELIED ON THE ORDER OF AO. THEREFORE, IN OUR VIEW, THIS GROUND O F THE DEPARTMENT IS WITHOUT ANY APPLICATION OF MIND AND ACCORDINGLY THE SAME IS REJ ECTED. 31. NEXT ISSUE I.E. GROUND NO. 8 IN BOTH THE APPEAL S IS GENERAL IN NATURE WHICH DOES NOT REQUIRE ANY ADJUDICATION. THEREFORE, THE SAME IS A LSO DISMISSED. 32. SINCE WE HAVE CONFIRMED THE ORDER OF LD. CIT (A ) IN RESPECT TO VARIOUS GROUNDS RAISED BY THE DEPARTMENT, THEREFORE, CROSS OBJECTIO NS FILED BY THE ASSESSEE ARE DISMISSED AS LD. A/R HAS STATED THAT IF THE DEPARTMENTS APPE ALS ARE DISMISSED THEN THE CROSS OBJECTIONS OF THE ASSESSEE MAY BE TREATED AS WITHDR AWN. ACCORDINGLY WE DISMISS THE CROSS OBJECTIONS OF THE ASSESSEE ALSO. 33. IN THE RESULT, APPEALS OF THE DEPARTMENT AND CR OSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 34. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 .08.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ITO WARD DAUSA. SHRI AMAR NARAIN GUPTA, DAUSA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 21(4)/JP/2011) BY ORDER, AR ITAT JAIPUR. 13