The ITO, Ward-1(1), Ahmedabad V. Shri Valibhai Khanbhai Mankad, Ahmedabad

ITA 2298/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0494 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: A C SHAH
• Keywords: Salary income; Deemed dividend
• Section: 142(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA , ACCOUNT ANT MEMBER I.T.O. WARD-1(1) AHMEDABAD (APPELLANT) VS . SHRI VALIBHAI KHANBHAI MANKAD PAN NO. AFAPMO480P (RESPONDENT) REVENUE BY : SRI RAHUL KUMAR, SR.D.R. ASSESSEE BY : SRI A.C. SHAH, A.R. DATE OF HEARING : 21-2-2013 DATE OF PRONOUNCEMENT : 15-03-2013 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-6 AHMEDABAD DATED 28-08-2012. THE REVENUE HAS TAKEN FOLLOWING TWO GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO CONSIDER THE ACCUMULATED PROFITS AT THE BEGINNING O F THE YEAR FOR CALCULATION OF DEEMED DIVIDEND U/S 2(22)(E) DESPITE THE FACT THAT AS PER EXPLANATION 2 TO SECTION 2(22), ACCUMULATED PRO FIT FOR SUB-CLAUSE (E) SHALL INCLUDE ALL PROFITS OF THE COMPANY UPTO T HE DATE OF ITA NO. 2298/AHD/2012 A.Y.:-2008-09 I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 2 DISTRIBUTION OR PAYMENT. IN THIS CASE, THE PAYMENT HAS BEEN MADE BY THE COMPANY TO THE ASSESSEE THROUGHOUT THE YEAR. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF CONTRACT RECEIPTS NOT REFLECTED IN THE RETURN OF INCOME OF THE ASSESSEE DESPITE THE FACT THAT THESE WERE PAID TO THE ASSESSEE AS PER ACCOUNTS OF THE PAYEE AND WERE NEITHER ACCOUNTE D FOR BY THE ASSESSEE NOR THE COMPANY PROMOTED BY THE ASSESSEE. NO ADDITION WAS MADE IN THE CASE OF THE ASSESSEE TOWARDS SUCH RECEI PTS WHICH WERE ACCOUNTED FOR IN THE BOOKS OF THE COMPANY. 2. GROUND NO. 1 RELATES TO ADDITION OF RS. 5,88,936 /- DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. THE ASSESSING OFFICER WHI LE MAKING THIS ADDITION HAS OBSERVED AS UNDER:- 'DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WA S OBSERVED THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN AMOUNTIN G TO RS. 10,75,559/- AS ON 31.03.2008 FROM AABAD ROADWAYS P LTD. IN WHICH THE ASSESSES IS A DIRECTOR, VIDE NOTICE U/S 142(1) DOTED 18/10/2010 THE ASSESSEE WAS REQUIRED TO FILE HIS LEDGER ACCOUNT IN THE BOOKS OF AABAD ROADWAYS P LTD. IN THE SAME NOTICE THE ASSESSEE WAS ALSO DIRECTED TO FILE THE DETAILS OF SHAREHOLDING IN COMPANIES (EXCL UDING LISTED ONES) AS ON 31.03.2007 AND AS ON 3.03.2008. THE ASSESSEE HAS FILED SUBMISSIONS DATED 1.10.2010 WHEREBY THE ASSESSEE HAS FILED THE COPY OF HIS LEDGER ACCOU NT IN THE BOOKS OF AABAD ROADWAYS P LTD. IN WHICH HE IS A DIRECTOR. ON VERIFICATION OF THIS LEDGER ACCOUNT IT IS FOUND THAT THE BALANCE IS CONSISTENTLY A DEBIT BALANCE. THE TOTAL PAYMENT MODE BY THE COMPANY TO T HE ASSESSEE IN THE FORM OF LOAN/ADVANCES DURING THE YEAR AMOUNTS T O RS. 11,92,700/- AND AT THE END OF THE FINANCIAL YEAR THE BALANCE AS ON 31.03.2008 IS RS.(-)10,75,559/-. IN DUE COURSE THE ASSESSEE VIDE SUBMISSIONS DATED 02.11.2010 HAS FILED THE DETAILS OF HIS SHAREHOLDIN G IN AABAD ROADWAYS P LTD. IT IS FOUND THAT THE ASSESSEE IS A BENEFICIAL SHAREHOLDER OF 70% SHARES IN THE COMPANY. IN THE CASE OF AABAD ROADWAYS P LTD., THE E-FILED R ETURN OF INCOME FILED ON 30.09.2008 BEARING ACK. NO. 4544622 1300908 WAS I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 3 DOWNLOADED FROM ITD. ON GOING THROUGH THE SAID RETU RN OF INCOME IT IS OBSERVED THAT THE SAID COMPANY HAS IN ITS BALANC E SHEET OF 31.03.2008, GENERAL RESERVES OF RS.5,88,936/-. THE SAME IS ALSO CONFIRMED IN THE AUDITED ACCOUNTS OF THE COMPANY WH ICH WERE CALLED FOR AND FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS PER THE PROVISIONS OF SECTION 2(22)(E), ANY PAYM ENT MADE BY A PRIVATE/CLOSELY HELD COMPANY OF ANY SUM BY WAY OF LOAN OR ADVANCE OF A SHAREHOLDER WHO IS A BENEFICIAL OWNER OF SHARE S HOLDING NOT LESS THAN 10% OF VOTING POWER WILL BE TREATED AS DEEMED DIVIDEND OF THE EXTENT OF ACCUMULATED PROFITS OF THE COMPANY IN THE HANDS OF THE SHAREHOLDER. FURTHERMORE, THE COMPANY I.E AABAD ROA DWAYS P LTD IS ENGAGED IN TRANSPORT BUSINESS; HENCE THE ADVANCE OR LOAN HAS NOT BEEN MADE IN THE ORDINARY COURSE OF BUSINESS OF MON EY LENDING. THE PROVISIONS OF SECTION 2(22)(E) ARE THEREFORE SQUARE LY APPLICABLE IN THIS CASE. OWING TO THE ABOVE FACTS, A SHOW CAUSE NOTICE DATED 01.11.2010 WAS ISSUED TO THE ASSESSEE WHEREBY THE ASSESSEE WAS REQUIRED TO SHOW CAUSE AS TO WHY THE LOAN/ADVANCE OF RS. 11,92,700// -AVAILED FROM AABAD ROADWAYS P LTD. DURING THE YEAR SHOULD NOT BE TREATED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE IN TER MS SECTION 2(22)(E) OF THE INCOME TAX ACT 1961. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSES HAS FILED SUBMISSIONS DATED 06.12.2010, THE ASSESSEE HAS CONT ENDED THAT IF DEEMED DIVIDEND IS TO BE CONSIDERED THEN THE OPENIN G BALANCE OF RESERVES AND SURPLUS OF RS.2,89,880/- SHOULD BE TAK EN IN TO ACCOUNT INSTEAD OF CLOSING BALANCE OF RS. 5,88,936/-. IT IS ALSO STATED THAT SINCE THE LOAN IS ALREADY REPAID THE QUESTION OF DEEMED D IVIDEND DOES NOT ARISE. THE CONTENTIONS OF THE ASSESSES ARE PERUSED. THE IN SIGNIFICANCE OF REPAYMENT OF LOAN, IF ANY, AT A LATER DATE IS AP PARENT DUE TO THE FACT THAT THE OUTSTANDING AMOUNT AT THE END OF THE YEAR I.E ON 31.03.2008 IS RS.(-) 10,75,559/- AS PER THE LEDGER ACCOUNT OF THE ASSESSES IN THE BOOKS OF AABAD ROADWAYS PVT. LTD. THE NEXT CONTENTION OF CONSIDERING THE ACCUMULATED PROFIT/RESERVES IN THE BALANCE SHEET OF THE COMPANY AT THE BEGINNING OF THE YEAR (RS,2 , 89,880/-) INSTEAD OF THE THAT THE END OF THE YEAR [RS.5,88,936/-) IS ALSO NOT ACCEPTABLE. AS PER THE EXPLANATION 2 TO I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 4 SECTION 2(22) 'ACCUMULATED PROFIT FOR THE PURPOSE OF SUB CLAUSE (E) SHALL INCLUDE ALL PROFITS OF THE COMPANY UPTO THE D ATE OF DISTRIBUTION OR PAYMENT. IN THIS CASE THE PAYMENTS ARE REGULARLY MA DE BY THE COMPANY THROUGHOUT THE YEAR TO THE ASSESSES ON A PI ECE MEAL BASIS. THE OPENING BALANCE ITSELF IS A DEBIT BALANCE OF RS .2,37,659/-, EVEN IF THE PAYMENTS MADE BY THE COMPANY OF THE ASSESSES DU RING THE YEAR ARE CONSIDERED THEN IT IS FOUND THAT AS ON 27.11.2007 T HE TOTAL PAYMENT MADE TO THE ASSESSEE COMES TO RS7,18,700/-. IF THE AVERAGE OF THE OPENING (RS.2,37,859) AND CLOSING BALANCES (RS10,75 ,559/-) IS CONSIDERED, THE SAME COMES TO 6,56,709/-. AS ON 10. 03.2008 THE SAID LOAN ADD UP TO RS. 11,92,700/-, SO THE ACCUMULATED PROFIT AS ON 31.03.2008 WOULD BE THE CLOSEST AVAILABLE FIGURE I. E. RS.5,88,936/-. THE ISSUE IN QUESTION IS CRYSTAL CLEAR AS PER STATU TE. ALL THE NECESSITIES OF TREATING LOAN/ADVANCE AS DEEMED DIVI DEND U/S 2(22)(E) ARE AT HAND. THE LOAN/ADVANCE OF RS.11,92.700/- HAS BEEN GRANTED TO THE ASSESSES DURING THE YEAR BY AABAD ROADWAYS P LT D. WHICH IS A CLOSELY HELD COMPANY IN WHICH THE ASSESSEE HOLDS 70 % OF THE SHARE CAPITAL. THE COMPANY IN QUESTION ALSO HAS ACCUMULAT ED PROFITS /RESERVES OF RS.5,88,936/- IN ITS BALANCE SHEET. TH E VARIOUS AMOUNTS HAVE BEEN REGULARLY ADVANCED THROUGHOUT THE YEAR. S INCE THE PROFITS HAVE ALSO BEEN DERIVED REGULARLY THROUGHOUT THE YEA R THE ACCUMULATED PROFIT/RESERVE AT THE END OF THE YEAR IS TREATED AS THE PERFECT QUOTIENT OF ACCUMULATION. THOUGH THE STATUTE IS CLEAR ON THI S ISSUE, IT CAN BE FURTHER SEEN THAT THE SUPREME COURT IN THE CASE OF P SARDA VS CIT (SC) 229 ITR 444 HAS HELD THAT LOAN GIVEN BY A COMP ANY IN WHICH THE PUBLIC IS NOT SUBSTANTIALLY INTERESTED, TO A SHAREH OLDER, WHO HAS SUBSTANTIAL INTEREST IN THE COMPANY AND THE SAID CO MPANY HAS ACCUMULATED PROFITS, IS TREATED AS NOTIONAL DIVIDEN D IN THE HANDS OF THE SHAREHOLDER. IN FIGHT OF THE FACTS AND FINDINGS DISCUSSED IN THE PRECEDING PARAS, THE SAID LOAN/ADVANCE TO THE EXTENT OF ACCUM ULATED PROFITS OF RS.5,88,936/- IS TREATED AS NOTIONAL/DEEMED DIVIDEN D IN THE HANDS OF THE ASSESSES AS PER SECTION 2(22)(E) OF THE INCOME TAX ACT 1961AND ADDED TO THE TOTAL INCOME .' 3. BEFORE LD. CIT(A) ASSESSEE PLACED RELIANCE ON TH E FOLLOWING SUBMISSIONS:- I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 5 THE ASSESSEE HAS RECEIVED THE LOAN FROM AABAD ROAD WAYS P. LTD. TO THE EXTENT OF RS. 10,75,559 AS ON 31-03-2008. THE AO HAS TREATED RS. 5,88,936 BEING ACCUMULATED PROFITS UPTO 31-03-2008 AS DEEMED DIVIDEND UNDER SECTION 2(22)(E). IN THIS CONNECTION, IT MAY PLEASE BE NOTED THAT THE CURRENT YEARS PROFIT CANNOT BE CONSIDERED AS PART OF ACCUMULATED PROFIT AS HELD BY AHMEDABAD BENCH IN THE CASE OF M.B. STOCK HOLDINGS P LTD. V/S. ACIT 84 ITD 542 (AHD). THEREFORE, THE BALANCE OF A CCUMULATED PROFIT AS ON 01-04-2007 SHOULD BE CONSIDERED. THE BALANCE OF ACCUMULATED PROFIT AS ON 01-04-2007 IS RS. 2,89,880/-. THEREFOR E, THE ADDITION MAY BE RS. 289,880 AND NOT RS. 5,88,936. 4. AFTER TAKING INTO CONSIDERATION THE SUBMISSION O F THE ASSESSEE LD. CIT(A) HAS ALLOWED THIS GROUND BY OBSERVING AS UND ER:- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSES SMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSING OFFICER TREATED LOAN RECEIVED BY THE APPELLANT FORM AABAD ROADWAYS P LTD AS DEEMED DIVIDEND. APPELLANT IN HIS WRITTEN SUBMISSION DID NOT OBJECT THE APPLICABILITY OF SECTION 2(22)(E) BUT ONLY OBJECTED THE QUANTIFICATION OF DEEMED DIVIDEND. IN VIEWS OF THIS, ASSESSING OFFIC ERS ACTION OF INVOKING PROVISIONS OF SECTION 2(22)(E) IS CONFIRME D. AS REGARDS QUANTIFICATION OF DEEMED DIVIDEND, ASSE SSING OFFICER MADE THE ADDITION OF RS. 5,88,936 BEING PROFIT AT T HE END OF THE YEAR WHEREAS APPELLANT ARGUED THAT IT SHOULD BE ACCUMULA TED PROFIT AT THE BEGINNING OF THE YEAR. APPELLANT RELIED UPON THE D ECISION OF AHMEDABAD ITAT IN THE CASE OF M B STOCKHOLDINGS PRI VATE LTD REPORTED IN 84 ITD 542 IN WHICH ITS HELD THAT ACCUM ULATED PROFIT FOR THE PURPOSE OF SECTION 2(22)(E) IS THE ACCUMULATED PROFIT AT THE BEGINNING OF THE YEAR AND CURRENT YEARS PROFIT ACC OUNT BE CONSIDERED AS PART OF ACCUMULATED PROFIT. RESPECTFULLY FOLLOW ING THE DECISION OF JURISDICTIONAL TRIBUNAL, ASSESSING IS DIRECTED TO M AKE THE ADDITION OF ACCUMULATED PROFIT OF AABAD ROADWAYS P LTD AS ON 01 -04-2007 AS DEEMED DIVIDEND . I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 6 5. SINCE THERE IS NO DISPUTE THAT ISSUE INVOLVED IN THIS GROUND IS COVERED BY THE DECISION OF THIS BENCH IN THE CASE OF M.B. S TOCK HOLDINGS P. LTD (SUPRA), THE ASSESSING OFFICER IS DIRECTED TO RE-CA LCULATE THE ADDITION U/S 2(22)(E) OF THE ACT IN THE LIGHT OF THIS DECISION. THIS GROUND OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 6. SECOND GROUND TAKEN BY REVENUE RELATES TO ADDIT ION OF RS. 17,94,900/- ON ACCOUNT OF CONTRACT RECEIPTS. ASSES SING OFFICER WHILE MAKING THIS DISALLOWANCE HAS OBSERVED AS UNDER:- AS PER THE INFORMATION AVAILABLE WITH THIS OFFICE, THE ASSESSEE HAS RECEIVED PAYMENTS IN THE FORM OF CONTRACT RECEIPTS FROM VARIOUS PARTIES DURING THE YEAR. ON VERIFICATION OF THE RE TURN OF INCOME/COMPUTATION OF INCOME IT WAS FOUND THAT THE ASSESSEE HAS NOT ACCOUNTED FOR ANY SUCH RECEIPTS. A SHOW CAUSE NOTI CE DATED 01.11.2010 WAS ISSUED TO THE ASSESSEE, THE RELEVANT EXTRACT OF WHICH IS REPRODUCED BELOW: AS PER THE RETURN OF INCOME/STATEMENT OF INCOME FI LED BY YOU, YOUR TOTAL TAXABLE INCOME IS RS. 2,59,260/- WHICH I NCLUDES INCOME FROM SALARY, INTEREST AND RENT. HOWEVER AS PER THE INFORMATION AVAILABLE WITH THIS OFFICE YOU HAVE REC EIVED PAYMENTS AS CONTRACTOR AMOUNTING TO RS. 51,46,863/- FROM VARIOUS PARTIES LIKE SRI BALAJI TRANSPORT LINES, NA RENDRAKUAMR COTTON MILLS, SRI SAKTHI TEXTILES LTD., PRECOT MERI DIAN LTD., MODERN COTTON YARN SPINNERS, SOUTHERN SPINNERS ETC. THESE RECEIPTS OF RS. 51,46,863/- ARE THEREFORE REQUIRED TO BE ADDED TO YOUR TOTAL INCOME. THE ASSESSEE HAS FILED SUBMISSIONS DATED 10.11.2010 . IT HAS BEEN STATED THAT TILL JUNE 2006, THE ASSESSEE WAS RUNNIN G A PROPRIETARY TRANSPORTATION BUSINESS BY THE NAME OF M/S AABAD RO ADWAYS. THE SAID PROPRIETARY HAS CEASED TO EXIST FROM JUNE 2006 AND HENCE THERE WAS NO BUSINESS DURING THE FY 07-08. THE ASSESSEE THEN FLOATED A COMPANY BY THE NAME OF AABAD ROADWAYS PVT. LTD. (IN WHICH HE IS A I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 7 DIRECTOR) FROM APRIL 2006 WHICH STARTED THE SAME BU SINESS FROM JULY 2006. IT IS FURTHER STATED THAT THE PAYING PARTIES HAVE GIVEN PAN OF PROPRIETARY I.E. INDIVIDUAL (AFAPMO480P) INSTEAD OF THE CORRECT PAN I.E. OF COMPANY (AAFCA6800Q) AND THAT EH SAID R ECEIPTS HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF THE COMPANY. ON VERIFICATION OF THE BOOKS OF THE COMPANY IT IS F OUND THAT THE RECEIPTS FROM ONE PARTY NAMELY BALAJI TRANSPORT LIN ES (TOTAL RS. 14,47,145/- AS PER AIR) HAVE NOT BEEN ACCOUNTED FOR AS INCOME EVEN BY THE COMPANY. WHEN CONFRONTED WITH THIS FACT THE ASSESSEE CONTENDED THAT NEITHER THE ASSESSEE NOR THE COMPANY (AABAD ROADWAYS P LTD.) HAS RECEIVED ANY PAYMENT FORM BALA JI TRANSPORT LINES AND THAT THE SAID AMOUNTS MAY HAVE BEEN PAID BY THE SAID PARTY TO THE RESPECTIVE TRUCK DRIVERS. THE ASSESSEE WAS REQUIRED TO SUBSTANTIATE ITS CLAIM ON THIS COUNT AND FURNISH A CERTIFICATE FROM THE PAYER. THE ASSESSEE WAS UNABLE TO DO SO AND COULD NOT PRODUCE ANY CERTIFICATE FROM THE SAID PARTY TO CORROBORATE ITS CLAIM. IN VIEW OF THE ABOVE SITUATION INFORMATION U/S 133( 6) OF THE INCOME TAX ACT 1961 WAS CALLED FOR FROM BALAJI TRANSPORT L INES, MUMBAI WHEREBY THE DETAILS OF PAYMENTS MADE TO THE ASSESSE E DURING THE FY 2007-08 WERE CALLED FOR. THE REQUISITE DETAILS FRO M BALAJI TRANSPORT LINES HAVE BEEN RECEIVED VIDE LETTER DATED 08.12.20 10 SIGNED BY THE ACCOUNTS MANGER. A STATEMENT SHOWING PAYMENTS MADE DURING THE FY 07-08 TO AABAD ROADWAYS (PAN AFAPM0480) I.E. THE AS SESSEE, HAS BEEN ENCLOSED. AS PER THE DETAILS OF CONTRACT PAYM ENTS MADE BY BALAJI TRANSPORT LINES TO THE ASSESSEE IT IS SEEN T HAT THE TOTAL PAYMENTS MADE DURING THE YEAR BY THIS PARTY TO THE ASSESSEE IS RS. 17,94900/-. WHEN CONFRONTED WITH THIS EVIDENCE THE ASSESSEE HAS STATED THAT NO SUCH PAYMENTS HAVE BEEN RECEIVED. H OWEVER THE ASSESSEE IS UNABLE TO SUBSTANTIATE SUCH A CLAIM. O N THE OTHER HAND IT IS A FACT THAT THE ASSESSEE IS A TRANSPORT CONTRACT OR DEALING WITH THIS PARTICULAR PARTY AS WELL. THE SAID PARTY HAS GIVEN ALL THE DETAILS OF PAYMENTS MADE TO THE ASSESSEE INCLUDING THE DATES, CHALLAN NOS., TRUCK NOS. ETC. THESE EVIDENCES VEHEMENTLY SUGGEST THAT THE ASSESSEE HAS BEEN PAID THE AMOUNT OF RS. 17,94,900/- DURING THE FY 2007-08 AS CONTRACT PAYMENTS. THE SAID PAYMENTS ARE ALSO REFL ECTED IN THE AIR INFORMATION UNDER TDS FLAG (TO THE EXTENT OF RS. 14 ,47,145). THE CIRCUMSTANTIAL EVIDENCE ALSO SUGGESTS THAT THE ASSE SSEE IS THE RECIPIENT OF THE SAID AMOUNT. IT IS THEREFORE CONSTRUED THAT THE SAID PAYMENTS I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 8 ARE RECEIVED BY THE ASSESSEE. IN LIGHT OF THESE FAC TS AS THE ASSESSEE HAS NEITHER ACCOUNTED FOR THE SAID RECEIPTS IN ITS OWN BOOKS OR IN THE BOOKS OF THE COMPANY IN WHICH HE IS A DIRECTOR, THE CONTRACT RECEIPTS FROM BALAJI TRANSPORT LINES ARE CONSIDERED AS THE I NCOME OF THE ASSESSEE FOR THE FY 2007-08. ACCORDINGLY, AN ADDIT ION OF RS. 17,94,900/- IS MADE TO THE TOTAL INCOME OF THE ASSE SSEE BEING CONTRACT RECEIPTS FROM BALAJI TRANSPORT LINES. PENALTY PROC EEDINGS U/S 271(1)(C) ARE SEPARATELY INITIATED ON THIS ISSUE. 7. AFTER TAKING INTO CONSIDERATION ASSESSEES SUB MISSION, ASSESSING OFFICER REMAND REPORT AND REJOINDER OF THE ASSESSEE TO ASSESSING OFFICERS REMAND REPORT LD. CIT(A) DELETED THIS ADDITION OF R S. 17,94,900/- AS HE FOUND THAT ASSESSING OFFICER HAS MADE THIS ADDITION ONLY ON THE BASIS OF AIR INFORMATION THAT ASSESSEE HAS RECEIVED CONTRACT REC EIPTS OF THIS MUCH AMOUNT FROM BALAJI TRANSPORT LINES WHILE THE ASSESSEES SU BMISSION BEFORE HIM WAS THAT DURING THIS YEAR THERE WAS NO SUCH RECEIPTS FR OM M/S BALAJI TRANSPORT LINES. IN SUPPORT OF HIS SUBMISSIONS ASSESSEE FIL ED BANK STATEMENT BEFORE LD. CIT(A) TO SHOW THAT NO SUCH PAYMENT WAS RECEIVE D BY HIM. ASSESSEE ALSO REQUESTED LD. CIT(A) TO DIRECT THE ASSESSING O FFICER TO ALLOW OPPORTUNITY TO ASSESSEE TO CROSS-EXAMINE THE PRINCIPAL OFFICER OF M/S BALAJI TRANSPORT LINES WHO HAD CLAIMED TO PAY TRANSPORT CHARGES TO T HE ASSESSEE. THIS REQUEST OF THE ASSESSEE WAS GRANTED BY LD. CIT(A) A ND ASSESSING OFFICER WAS ACCORDINGLY DIRECTED TO ALLOW OPPORTUNITY TO CROSS- EXAMINE THE CONCERNED OFFICER OF M/S BALAJI TRANSPORT LINES. ON THE BASI S OF THIS CROSS-EXAMINATION REPORT BY THE ASSESSING OFFICER AND OTHER RELEVANT EVIDENCE LD. CIT(A) CATEGORICALLY GAVE HIS FINDING THAT ASSESSEE DID NO T RECEIVE ANY TRANSPORT CHARGES FROM M/S BALAJI TRANSPORT LINES. THIS FIND ING OF THE LD. CIT(A) REMAINED UNCONTROVERTED BY THE REVENUE BEFORE US, T HEREFORE, WE ARE NOT I.T.A NO. 2298/ADH/2012 A.Y. 2008-09 PAGE NO. ITO VS. VALIBHAI KHANBHAI MANKAD 9 INCLINED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K.TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 15/03/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# STRENGTHENED PREPARATION & DELIVERY OF ORDERS IN TH E ITAT 1) DATE OF TAKING DICTATION 04-03-2013 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE N.A. 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 07-03-2013 4) DATE OF CORRECTION 08-03-2013 5) DATE OF FURTHER CORRECTION 11-03-2013 6) DATE OF INITIAL SIGN BY MEMBERS 13-03-2013 7) ORDER UPLOADED ON 03-04-2013 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) ORDER SENT TO BENCH CLERK 15-03-2013