M/s. Vipul Diamonds, Surat V. The Addl.CIT.,Range-6, Surat

ITA 2174/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6232 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 06-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAVANSHI
• Assessee Lawyers: K N BHATT
• Keywords: Rejection of books of accounts
• Section: 143(3)

Judgement Text

ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH,AH MEDABAD. (BEFORE SHRI BHAVNESH SAINI & SHRI A.K. GARODIA) I.T.A. NO. 4467/AHD/2007 (ASSESSMENT YEAR 2004- 05) AND I.T.A. NO.2174/AHD/2008 (ASSESSMENT YEAR 2005-06) M/S. VIPUL DIAMONDS 205, ANAND APARTMENT, JADAKHADI, MAHIDHARPURA, SURAT. (APPELLANT) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, AAYAKAR BHAVAN, MAJURA GATE, SURAT. (RESPONDENT) PAN: AACFV 0420F APPELLANT BY : SHRI K. N. BHATT. RESPONDENT BY : SHRI G.S. SOURYAVANSHI, SR. D. R. ( )/ ORDER PER: SHRI A. K.GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSE AGAINS T TWO SEPARATE ORDERS OF LD. CIT (A)-IV, SURAT DATED 1-10-2007 FOR ASSESS MENT YEAR 2004-05 AND DATED 28-4-2008 FOR ASSESSMENT YEAR 2005-06. FOR TH E SAKE OF CONVENIENCE, BOTH THESE APPEALS ARE BEING DISPOSED OF BY THIS CO MMON ORDER. ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 2 2. GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEA R 2004-05 ARE AS UNDER:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE REJECTION OF BOO KS OF ACCOUNTS OF THE APPELLANT AND HENCE YOUR PETITIONER PRAYS THAT THE ORDER OF THE LD. CIT BE SET ASIDE ON THIS POINT AND THE LD. ACIT BE DIRECTED TO ACCEPT THE BOOKS OF ACCOUNTS OF THE APPELLANT. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DIFFERENT METHOD OF VALUATION OF CLOSING STOCK AND THEREBY CONFIRMING THE ADDITION O F RS.21,02,836/- ON ACCOUNT OF THE DIFFERENCE IN THE VALUE OF CLOSIN G STOCK AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. ALTERNATIVELY YOUR PETITIONER BE ALLOWED TO SUBSTITUTE THE VALUE OF OPENING STOCK OF THE A.Y. 2005-06 BY THE VALUE OF THE CLOSI NG STOCK ADOPTED BY THE LD. ACIT IN A.Y. 2004-05 AS THERE IS NO VARI ATION IN QUANTITY OF CLOSING STOCK BUT THE LD. A.O. ADOPTED THE DIFFE RENT METHOD OF VALUATION OF CLOSING STOCK. 3. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 3,39,520/- OUT OF WAGES PAID TO RANCHHODBHAI PATEL AND HENCE YOUR PET ITIONER PRAYS THAT THE SAME BE DELETED. 4. YOUR PETITIONER PRAYS THAT ALL OTHER RELIEF (S) AND REBATES AS MAY BE ALLOWABLE TO IT UNDER THE THEN EXISTING PROVISIO NS OF THE ACT BE ALLOWED TO IT. 5. YOUR PETITIONER CHALLENGES ALL THE ADDITIONS, DI SALLOWANCES AND THE LEVY OF INTERESTS UNDER VARIOUS SECTIONS AND PR AYS THAT THE RETURN OF INCOME FILED BY IT BE ACCEPTED. ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 3 3. GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEA R 2005-06 ARE AS UNDER:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNTS OF THE APPELLANT AND HENCE YOUR PETITIONER PRAYS THAT THE ORDER OF THE LD. CIT BE ASIDE ON THIS POINT AND THE LD. ACIT BE DIRECTED TO ACCEPT THE BOOKS OF ACCOUNTS OF THE APPELLANT. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DIFFERENT METHOD OF VALUATION OF CLOSING STOCK OF FINISHED GOODS AND THEREBY CONFIRM ING THE ADDITION OF RS.44,49,842/- ON ACCOUNT OF DIFFERENCE IN THE VALU E OF CLOSING STOCK AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DE LETED. ALTERNATIVELY YOUR PETITIONER BE ALLOWED TO SUBSTITUTE THE VALUE OF OPENING STOCK OF THE A.Y. 2006-07 BY THE VALUE OF CLOSING S TOCK ADOPTED BY THE LD. ACIT IN A.Y. 2005-06 AS THERE IS NO VARIATI ON IN QUANTITY OF CLOSING STOCK BUT THE LD. A.O. ADOPTED THE DIFFEREN T METHOD OF VALUATION OF CLOSING STOCK. 3. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DIFFERENT METHOD OF VALUATION OF CLOSING STOCK AND THEREBY CONFIRMING THE ADDITION O F RS.7,03,329 ON ACCOUNT OF THE DIFFERENCE IN THE VALUE OF CLOSING S TOCK OF RAW MATERIAL AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DE LETED. ALNERNATIVELY YOUR PETITIONER BE ALLOWED TO SUBSTITUTE THE VALUE OF OPENING STOCK OF A.Y.2006-07 BY THE VALUE OF CLOSING STOCK ADOPTED BY THE LD. ACIT IN A.Y. 2005-06 AS THERE IS NO VARIATION IN QU ANTITY OF CLOSING STOCK BUT THE LD. A.O. ADOPTED THE DIFFERENT METHOD OF VALUATION OF CLOSING STOCK. ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 4 4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A)-IV, SURAT HAS ERRED IN CONFIRMING THE ADDITION OF RS. 20,000/- OUT OF FOREIGN TRAVELS AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. 5. YOUR PETITIONER PRAYS THAT ALL OTHER RELIEF (S) AND REBATES AS MAY BE ALLOWABLE TO IT UNDER THE THEN EXISTING PROVISIO NS OF THE ACT BE ALLOWED TO IT. 6. THE PETITIONER CHALLENGES ALL THE ADDITIONS, DIS ALLOWANCES AND THE LEVY OF INTERESTS UNDER VARIOUS SECTIONS AND PR AYS THAT THE RETURN OF INCOME FILED BY IT BE ACCEPTED. 4. BRIEF FACTS REGARDING THE FIRST ISSUE I.E. REGAR DING ADDITION MADE BY THE A.O. REGARDING VALUATION OF CLOSING STOCK ARE AS UN DER. 5. IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05 THAT ON PERUSAL OF BASIS AND WORKING OF VAL UATION OF CLOSING STOCK OF POLISHED DIAMONDS, IT WAS FOUND THAT THE ASSESSEE H AS SHOWN THE AVERAGE PRICE PER CARAT OF POLISHED DIAMOND AT RS.4680/-. I T IS FURTHER NOTED BY THE A.O. THAT THE ASSESSEE HAS ALLEGEDLY TAKEN THE BASI S OF LOWER OF COST OR NET REALIZABLE VALUE FOR THE PURPOSE OF DETERMINATION O F THE VALUE OF CLOSING STOCK OF POLISHED DIAMONDS. HE HAS FURTHER NOTED T HAT THE ASSESSEE HAS NOT MAINTAINED IN QUALITY-WISE DETAILS OF THE POLISHED DIAMOND WHICH HAS BEEN MANUFACTURED. HE HAS ALSO NOTED THAT THE MARKET VA LUE OF THE POLISHED DIAMOND IS DEPENDENT ON VARIOUS QUALITY PARAMETERS SUCH AS CLARITY, CUT, COLOUR ETC. THE A.O. HAS NOTED THAT IN ORDER TO DET ERMINE THE MARKET VALUE OF THE POLISHED DIAMOND, THE ASSESSEE MUST HAVE DETAIL S OF ALL THE ABOVE FACTORS BUT IN THE PRESENT CASE, THE ASSESSEE HAS NOT MAINT AINED ANY SUCH DETAILS AND VALUED THE CLOSING STOCK OF POLISHED DIAMOND AT LOW ER OF COST OR NET REALIZABLE VALUE. THE A.O. HAS FURTHER NOTED THAT THE VALUE OF POLISHED ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 5 DIAMOND REPORTED BY THE ASSESSEE IS LESS THAN THE A CTUAL AVERAGE COST. THE A.O. ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ASKIN G THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ACTUAL AVERAGE COST SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF VALUATION OF CLOSING STOCK OF POLISHED D IAMOND BY REJECTING THE BASIS ADOPTED BY THE ASSESSEE. VARIOUS SUBMISSIONS WERE MADE BY THE A.R. OF THE ASSESSEE BUT THE A.O. WAS NOT SATISFIED AND HE ADOPTED THE AVERAGE COST OF POLISHED DIAMOND FOR THE PURPOSE OF VALUATI ON OF CLOSING STOCK AND IN THIS MANNER, HE MADE ADDITION OF RS.21,02,836/- IN ASSESSMENT YEAR 2004- 05. ON SIMILAR BASIS, THE A.O. MADE ADDITION OF RS . 44,49,842/- REGARDING THE VALUATION DIFFERENCE IN THE VALUE OF CLOSING ST OCK OF POLISHED DIAMONDS IN A.Y. 2005-06. 6. HE ALSO MADE ADDITION OF RS.7,03,329/- IN A.Y. 2 005-06 ON ACCOUNT OF ALLEGED UNDER VALUATION OF CLOSING STOCK OF ROUGH D IAMONDS. FOR MAKING THIS ADDITION ALSO, THE A.O. HAS VALUED THE CLOSING STOC K OF ROUGH DIAMOND AT AVERAGE COST WHEREAS THE ASSESSEE WAS VALUED THE SA ME ON THE SAME BASIS I.E. COST OR MARKET PRICE WHICHEVER IS LOWER. AGAINST BO TH THESE ADDITIONS IN A.Y. 2005-06 AND AGAINST THE ADDITION REGARDING VAL UE OF CLOSING STOCK OF POLISHED DIAMOND IN A.Y. 2004-05, THE ASSESSEE PREF ERRED APPEALS BEFORE THE LD. CIT (A) BUT WITHOUT SUCCESS AND NOW, THE ASSESS EE IS IN FURTHER APPEAL BEFORE US IN BOTH THE YEARS. 7. IT IS SUBMITTED BY THE LD. A.R. OF THE ASSESSEE THAT THE ADDITION WAS MADE BY THE A.O. IN BOTH THE YEARS REGARDING THE VA LUATION OF CLOSING STOCK OF POLISHED DIAMOND AND IN A.Y. 2005-06 REGARDING V ALUE OF CLOSING STOCK OF ROUGH DIAMOND BY ADOPTING THE METHOD OF VALUATIO N OF CLOSING STOCK AT AVERAGE COST PRICE AS AGAINST THE METHOD OF STOCK V ALUATION ADOPTED BY THE ASSESSEE I.E. COST OR MARKET PRICE WHICHEVER IS LOW ER. IT IS SUBMITTED THAT THE ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 6 METHOD ADOPTED BY THE ASSESSEE IS ALSO AN APPROVED METHOD AND HENCE, THE A.O. WAS NOT JUSTIFIED IN REJECTING THAT APPROVED M ETHOD AND ADOPTING THE DIFFERENT METHOD. HE ALSO SUBMITTED A YEAR-WISE CHA RT OF GROSS PROFIT FROM ASSESSMENT YEAR 2001-02 TO 2007-08. IT IS SUBMITTED THAT G.P. REPORTED BY THE ASSESSEE IN THESE TWO YEARS IS IN LINE WITH G.P . REPORTED BY THE ASSESSEE IN 3 EARLIER YEARS I.E. A.Y. 2001-02 TO 2003-04. HE ALSO SUBMITTED A COPY OF THE ASSESSMENT ORDER PASSED BY THE A.O. IN ASSESSEE S OWN CASE FOR A.Y. 2003-04.IT IS SUBMITTED BY HIM THAT ASSESSMENT WAS ALSO COMPLETED BY THE A.O. U/S. 143(3) AND ASSESSEE WAS FOLLOWING THE SAM E METHOD OF VALUING THE CLOSING STOCK IN THAT YEAR ALSO BUT NO SUCH ADDITIO N WAS MADE BY THE A.O. IN THAT YEAR, AND HENCE, AS PER THE PRINCIPLE OF CONSI STENCY ALSO, THE ADDITION MADE BY THE A.O. IN THESE TWO YEARS IS NOT JUSTIFIE D. 8. THE LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. YEAR-WISE GROSS PROFIT RATE DECLARED BY THE ASSESSEE AS PER T HE CHART SUBMITTED BY THE LD. A.R. OF THE ASSESSEE IS AS UNDER:- ASSESSMENT YEAR G.P. RATE IN PERCENTAGE. 2001-02 10.72 2002-03 9.39 2003-04 9.64 2004-05 9.34 2005-06 9.22 2006-07 7.76 2007-08 9.07 ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 7 10. FROM THE ABOVE CHART OF YEAR-WISE GROSS PROFIT, WE FIND THAT THE G.P. REPORTED IN A.Y. 2004-05 AND 2005-06 WHICH ARE BEFO RE US IS MORE OR LESS IN LINE WITH THE G.P. REPORTED IN TWO EARLIER YEARS I. E. A.Y. 2002-03 AND 2003- 04 AND TWO SUCCEEDING ASSESSMENT YEARS I.E. A.Y. 2 006-07 AND 2007-08. IT HAS BEEN SUBMITTED BY THE LD. A.R. OF THE ASSESSEE BEFORE US THAT NO SIMILAR ADDITION WAS MADE BY THE A.O. EITHER IN EARLIER YEA RS OR IN THESE TWO SUCCEEDING YEARS. IT IS ALSO SUBMITTED THAT IN ASS ESSMENT YEAR 2003-04, ASSESSMENT WAS COMPLETED BY THE A.O. U/S. 143(3) AN D STILL, THERE WAS NO SUCH ADDITION MADE BY THE A.O. AS CAN BE SEEN FROM THE COPY OF ASSESSMENT ORDER SUBMITTED BY THE ASSESSEE BEFORE US. WE ALSO FIND THAT THE METHOD OF STOCK VALUATION ADOPTED BY THE ASSESSEE BEING LOWER OF COST OR MARKET PRICE IS ALSO ACCEPTED AND APPROVED METHOD OF STOCK VALUA TION. WE ALSO FIND THAT CLOSING STOCK OF ONE YEAR WILL BE THE OPENING STOCK OF THE SUCCEEDING YEAR AND SINCE THE ASSESSEE IS FOLLOWING THE SAME METHOD OF VALUATION OF CLOSING STOCK YEAR AFTER YEAR STARTING FROM A.Y. 2001-02, T HE SAME CANNOT BE REJECTED WITHOUT POINTING OUT ANY SERIOUS DEFECT IN THE METHOD OF VALUATION OF STOCK BEING FOLLOWED BY THE ASSESSEE. THE ONLY OBJECTION OF THE A.O. IS THAT THE ASSESSEE IS NOT MAINTAINING QUALITY-WISE R ECORD OF THE POLISHED DIAMONDS. WE FEEL THAT MAINTAINING OF QUALITY-WISE DETAILS OF PRODUCTION AND CLOSING STOCK OF POLISHED DIAMOND WILL DEFINITELY H ELP IN VALUATION OF CLOSING STOCK AND IN THE ABSENCE OF THAT, THERE MAY BE SOME DEFECT IN THE VALUATION OF CLOSING STOCK BUT AT THE SAME TIME, THE METHOD ADOP TED BY THE A.O. ALSO IS NOT FULL-PROOF. AS PER THE METHOD ADOPTED BY THE A .O. ALSO IN A GIVEN SITUATION FOR E.G. IF BULK OF PRODUCTION OF THE ASS ESSEE IS OF COSTLY TYPE OF DIAMOND AND THE CLOSING STOCK OF THE ASSESSEE IS HA VING BULK OF LESS COSTLY TYPE OF DIAMOND, THEN THE AVERAGE COST WILL BE HIGH ER AND ADOPTING THIS ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 8 METHOD WILL RESULT INTO HIGHER VALUATION OF CLOSING STOCK. SIMILAR WILL BE THE POSITION IN A GIVEN CASE WHERE BULK OF PRODUCTION O F THE ASSESSEE IS OF LESS COSTLY TYPE OF DIAMOND BUT THE MAJOR PART OF THE CL OSING STOCK IS OF COSTLY TYPE OF DIAMOND. IN THAT SITUATION, THE AVERAGE COS T PRICE OF THE YEAR WILL BE LESS AND AS A RESULT, THE VALUE OF CLOSING STOCK WI LL BE LESSER THAN THE ACTUAL VALUE OF THE STOCK. HENCE, IN BOTH THE METHODS, THE RE MAY BE SOME DEFECT AND HENCE, BY REJECTING THE ONE DEFECTIVE METHOD BE ING FOLLOWED BY THE ASSESSEE YEAR AFTER YEAR, DIFFERENT DEFECTIVE METHO D OF VALUATION OF STOCK CANNOT BE IMPOSED ON THE ASSESSEE PARTICULARLY WHEN THE RATES OF G.P. BEING DECLARED BY THE ASSESSEE IN THESE TWO YEARS IS IN L INE WITH THE G.P. RATE OF EARLIER YEARS AND NO SUCH ADDITION WAS MADE BY THE A.O. IN EARLIER YEARS ALTHOUGH THE ASSESSMENT OF ONE OF THOSE YEARS I.E. A.Y. 2003-04 WAS COMPLETED BY THE A.O. U/S. 143(3). THE BOOKS OF THE ASSESSEE ARE ALSO AUDITED AND THE AUDITOR HAS NOT POINTED OUT ANY DEF ECT IN THE BOOKS OF ACCOUNTS BEING MAINTAINED BY THE ASSESSEE OR IN THE METHOD OF VALUATION OF CLOSING STOCK BEING ADOPTED BY THE ASSESSEE. CONSI DERING ALL THESE FACTS, WE FEEL THAT THE ADDITION MADE BY THE A.O. BY REJECTIN G THE METHOD OF VALUATION OF CLOSING STOCK BEING FOLLOWED BY THE ASSESSEE CON SISTENTLY YEAR AFTER YEAR IS NOT JUSTIFIED. WE THEREFORE, DELETED THE SAID AD DITION MADE BY THE A.O. IN BOTH THE YEARS. ALTERNATIVE GROUNDS IN BOTH YEAR AR E NOT REQUIRED TO BE ADJUDICATED UPON. 11. GROUND NO.1 AND 2 IN ASSESSMENT YEAR 2004-05 AN D GROUND NO.1 TO 3 IN ASSESSMENT YEAR 2005-06 ARE ALLOWED. 12. REGARDING GROUND NO.3 IN ASSESSMENT YEAR 2004-0 5, IT WAS SUBMITTED BY THE A.R. OF THE ASSESSEE THAT THE DISA LLOWANCE MADE BY THE ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 9 A.O. IS ADHOC DISALLOWANCE WHICH SHOULD BE DELETED. THE LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BEL OW. 13. THIS DISALLOWANCE OF RS.3,39,520/- WAS MADE BY THE A.O. IN RESPECT OF THE CLAIM OF THE ASSESSEE REGARDING PAYMENT OF T HIS AMOUNT TOWARDS LABOUR EXPENSES TO ONE SHRI RANCHHODBHAI PATEL WHOS E STATEMENT WAS RECORDED BY THE A.O. U/S. 131 OF THE ACT. IT IS N OTED BY THE A.O. THAT SHRI RANCHHODBHAI PATEL STATED THAT HE WAS DOING THE JOB WORK. THE SAID JOB WORK WAS UNDERTAKEN IN A VILLAGE IN SAURASHTRA WHIC H WAS MORE THAN 450 KMS FROM THE CITY OF SURAT AND HE WAS NOT MAINTAINI NG ANY BOOKS IN RELATION TO THE SAID JOB WORK. IT IS ALSO NOTED BY THE A.O. THAT HE HAS FURTHER STATED THAT HE WAS DOING ONLY ASSORTMENT WORK AND ACTUAL J OB WORK IS DONE BY HIS PARTNER AND HE WAS FORGETTING THE NAME OF THE PARTN ER. IT IS FURTHER NOTED BY THE A.O. THAT SHRI RANCHHODBHAI PATEL COULD NOT GIV E DETAILS ABOUT THE RATE CHARGED BY HIM. IT IS FURTHER NOTED BY THE A.O. THA T SHRI RANCHHODBHAI PATEL FAILED TO EXPLAIN THE DEPOSIT OF RS.3 LAKHS IN HIS BANK ACCOUNT AND WITHDRAWAL THEREOF ON THE VERY NEXT DAY ITSELF. SH RI PATEL ALSO FAILED TO GIVE ANY PROPER EXPLANATION REGARDING THE USE OF THE WIT HDRAWN CASH. SHRI PATEL ALSO COULD NOT INDICATE HIS BANK ACCOUNT NUMBER AND ALSO SHOWN IGNORANCE ABOUT THE TRANSACTION IN HIS BANK ACCOUNT. IT IS AL SO STATED BY SHRI PATEL THAT HE WAS DOING CUTTING AND POLISHING JOB-WORK FROM SA URASHTRA BUT NO SUCH EXPENSES WERE DEBITED IN THE ACCOUNTS AS WELL AS IN HIS RETURN OF INCOME. CONSIDERING THESE FACTS, WE FEEL THAT THE ASSESSEE COULD NOT BRING ON RECORD ANY EVIDENCE REGARDING DOING OF JOB WORK BY SHRI PA TEL AND MERELY BECAUSE THE PAYMENT WAS MADE BY ACCOUNT PAYEE CHEQUE, IT CA NNOT BE ACCEPTED THAT SUCH PAYMENT WAS MADE BY THE ASSESSEE FOR BUSINESS PURPOSES PARTICULARLY WHEN AS PER THE STATEMENT OF SHRI RANCHHODBHAI PATE L RECORDED BY THE A.O. ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 10 U./S. 131, MANY DEFECTS HAVE BEEN POINTED OUT BY TH E A.O. AND NO SATISFACTORY REPLY COULD BE FURNISHED BY THE ASSESS EE EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE US AND HENCE, WE DO NO T FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) ON THIS IS SUE. GROUND NO.3 OF A.Y. 2004-05 IS REJECTED. 14. GROUND NO.4 AND 5 IN ASSESSMENT YEAR 2004-05 AR E GENERAL IN NATURE AND DO NOT CALL FOR SEPARATE ADJUDICATION. 15. GROUND NO.4 IN A.Y. 2005-06 HAS NOT BEEN PRESSE D BY THE LD. A.R. OF THE ASSESSEE AND THEREFORE, THE SAME IS REJECTED. R EMAINING GROUND NO.5 AND 6 ARE GENERAL IN NATURE AND DO NOT CALL FOR ADJUDIC ATION. 16. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 06 - 2011 . SD/- SD/- (BHAVNESH SAINI) (A. K. GARODIA) JUDICIAL MEMBER AC COUNTANT MEMBER AHMEDABAD. DATED: 30 - 6 - 2011. S.A.PATKI. ITA NO.446 7/AHD/2007 ITA NO.217 4/AHD/2008 . ASSESSMENT YEARS 204-0 5 & 2005- 06 11 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-IV, SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER. DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 28 - 06 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 29 / 06 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 29 - 6 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 6 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 30 -6 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3 0 - 6 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..