Shri Mahendra Ramlabhaya Verma, Ahmedabad V. The Income tax Officer, Ward-10(3), Ahmedabad

ITA 2344/AHD/2009

• Counselvise Citation: 234420514 RSA 2009
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 03-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Section: 69C; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHA N ALANKAMONY, AM) ITA NO.2344/AHD/2009: A. Y.: 2003-04 MAHENDRA RAMLABHAYA VARMA, PIYURAJ CHAMBERS, SWASTIK CROSS ROAD, C.G. ROAD, NAVRANGPURA, AHMEDABAD 380 009 PA NO. AAKPV 9144 N VS THE INCOME TAX OFFICER, WARD - 10(3), 1 ST FLOOR, NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVATIA, AR RESPONDENT BY SHRI JAMES KURIAN, SR. DR DATE OF HEARING: 19-03-2012 DATE OF PRONOUNCEMENT: 30-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE COMMON ORDER OF THE LEARN ED CIT(A)-XVI, AHMEDABAD DATED 27-05-2009, FOR ASSESSMENT YEAR 200 3-04 IN APPEAL NO. CAT(A)/XVI/WD.10(3)/244/2006-07 ALONG WITH OTHE R APPEALS FOR ASSESSMENT YEARS 2002-03, 2004-05 AND 2005-06. 2. THE ASSESSEE HAS RAISED TWO GROUNDS IN HIS APPEA L WHEREIN GROUND NO.2 IS GENERAL IN NATURE AND DOES NOT SURVI VE FOR ADJUDICATION. THE OTHER MAIN GROUND RAISED BY THE ASSESSEE IS THA T (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW A ND ON FACTS IN NOT DELETING ADDITIONS MADE BY THE A. O. AS UNEXPLAINED EXPENSES U/S. 69C ITA NO.2344/AHD/2009 (AY 2003-04): MAHENDRA RAMLABH AYA VARMA VS ITO, 10(3), AHMEDABAD 2 OF RS.21,40,250/- AND FURTHER, THE LEARNED CIT(A) E RRED IN DIRECTING THE A.O. TO TREAT THE PAYMENTS MADE TO PIYURAJ ASSOCIAT ION AS EXPLAINED ONLY IF THE SAME ARE MADE OUT OF THE WITHDRAWALS FR OM THE BANK ACCOUNT WITHIN 3 DAYS FROM THE DATE OF WITHDRAWAL AND ALSO ERRED IN NOT RESTRICTING THE ADDITIONS TO ACTUAL AMOUNT OF PAYMENTS DURING T HE PREVIOUS YEAR OF RS.15,90,250/-. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL HAVING PROPRIETORSHIP BUSINESS IN THE NAME OF M/S. COMFY DEALING IN LINEN MATTRESSES TRADING. THE ASSESSED DID NOT FILE HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. PURSUANT TO NOTIC E U/S 148 OF THE IT ACT ON 10-02-2006 AND AFTER PROLONG REMINDERS THE ASSES SEE FILED RETURN OF INCOME IN FORM 2D ON 21-11-2006 DECLARING TOTAL INC OME AT NIL FOR THE ASSESSMENT YEAR 2003-04. THE LEARNED AO SUBSEQUENTL Y PASSED THE ASSESSMENT ORDER U/S 147 READ WITH SECTION 143(3) A ND 144(4) OF THE IT ACT ON 22-12-2006 WHEREIN VARIOUS ADDITIONS WERE MA DE AND ONE SUCH ADDITIONS WAS MADE FOR RS.21,40,250/- BEING UNEXPLA INED EXPENSES TAXABLE U/S 69C OF THE IT ACT. THE LEARNED AO ON VE RIFICATION OF THE DETAILS FOUND FROM THE COPY OF THE BUILDING ACCOUNT S ENCLOSED WITH THE RETURN OF INCOME FILED BY THE ASSESSEE NOTED THAT IN THE ASSESSEE HAD MADE THE FOLLOWING PAYMENTS TO M/S. PIYURAJ ASSOCIA TION DURING THE PREVIOUS YEAR UNDER CONSIDERATION ON ACCOUNT OF PUR CHASE OF OFFICE SPACE: (I) 09-08-2002 RS. 2,00,000/- (II) 17-08-2002 RS.19,40,250/- THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF FUN DS FOR MAKING SUCH PAYMENTS VIDE LETTER DATED 06-12-2006. THE ASSESSEE STATED THAT DURING THE YEAR HE HAD MADE PAYMENT OF RS.15,90,250/- TO M /S. PIYURAJ ASSOCIATION AND AN AMOUNT OF RS.5,50,000/- WAS PAI D DURING THE EARLIER ITA NO.2344/AHD/2009 (AY 2003-04): MAHENDRA RAMLABH AYA VARMA VS ITO, 10(3), AHMEDABAD 3 YEAR. THE ASSESSEE DID NOT FURNISH HIS CASH BOOK FO R THE RELEVANT PREVIOUS YEAR OR STATEMENT OF ACCOUNTS TO ENABLE TH E LEARNED AO FOR HIS VERIFICATION. THE ASSESSEE ALSO FAILED TO FURNISH T HE SOURCES OF THE DEPOSIT IN VARIOUS BANK ACCOUNTS HELD BY THE ASSESS EE. SINCE THE DETAILS OF THE ASSESSEES ACCOUNTS WERE NOT COMING FORTH, T HE LEARNED AO TREATED THE ENTIRE AMOUNT OF RS.21,40,250/- AS ASSE SSEES OWN INCOME EARNED FROM UNDISCLOSED SOURCES FOR THE RELEVANT PR EVIOUS YEAR AND MADE ADDITION U/S 69C OF THE IT ACT. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) AND FURNISHED THE DETAILS OF PAYMENTS MADE. THE LEARNED CIT(A) REMITTED THE MATTER BACK TO THE FILE OF THE LEARNED AO TO VERIFY THE BOOKS OF ACCOUNTS AND DETAILS FURNISHED BY THE ASSESSEE W ITH A RIDER TO TREAT ONLY THE PAYMENTS MADE FOR INVESTMENT TO M/S. PIY URAJ ASSOCIATION FROM THE WITHDRAWALS FROM THE BANK ACCOUNTS WITHIN 3 DAYS FROM THE DATE OF WITHDRAWAL TO BE THE GENUINE SOURCE FOR THE INVE STMENT. 5. THE LEARNED AR SUBMITTED A PAPER BOOK CONTAINING 1 TO 26 PAGES EXPLAINING VARIOUS DATES AND MODE OF PAYMENT TO M/S . PIYURAJ ASSOCIATION AND ARGUED THAT ALL THE PAYMENTS WERE R ECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THUS, THE SOU RCE WAS FULLY EXPLAINED AND THEREFORE, ADDITION MADE FOR RS.21,40 ,250/- MAY BE DELETED. ON THE OTHER HAND, THE LEARNED DR VEHEMENT LY OPPOSED TO THE SUBMISSION OF THE LEARNED AR AND SUBMITTED THAT THE ASSESSEE HAD NEITHER PRODUCED THE REQUISITE BOOKS OF ACCOUNTS BE FORE THE AO OR BEFORE THE LEARNED CIT(A) AND THEREFORE, THE ADDITI ON MAY BE SUSTAINED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAIL ABLE ON RECORD ALONG WITH PAPER BOOK BROUGHT BEFORE US BY THE ASSESSEE. DURING THE COURSE ITA NO.2344/AHD/2009 (AY 2003-04): MAHENDRA RAMLABH AYA VARMA VS ITO, 10(3), AHMEDABAD 4 OF THE ARGUMENTS, CITING THE PAPER BOOK, THE LEARNE D AR EXPLAINED THE DATE AND MODE OF PAYMENT AS FOLLOWS: SR. NO. DATE OF PAYMENT MODE OF PAYMENT AMOUNT (RS.) PAPER BOOK/CIT ORDER REFERENCE 1 15-07-2001 CASH 50,000 CIT(A) ORDER PAGE 9 2 16-07-2001 CASH 50,000 CIT(A) ORDER PAGE 10 3 17-07-2001 CASH 2,50,000 CIT(A) ORDER PAGE 10 4 09-08-2002 CASH 50,000 PAPER BOOK PAGE 7 5 17-08-2002 CASH 4,40,250 PAPER BOOK PAGE 7 6 17-08-2002 CASH 10,00,000 PAPER BOOK PAGE 7,12 AND 14 7 16-12-2002 CHEQUE 50,000 PAPER BOOK PAGE 3 AND 19 8 11-01-2003 CHEQUE 50,000 PAPER BOOK PAGE 16 TOTAL 21,40,250 SINCE, THE BOOKS OF ACCOUNTS OF THE ASSESSEE REQUIR ES TO BE RECONCILED WITH THE PAYMENT SCHEDULE SUBMITTED BY THE ASSESSEE ALONG WITH DECLARED SOURCES OF PAYMENT MADE IN THE RETURN OF I NCOME AS ALSO OBSERVED BY THE LD.CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE CASE NEEDS TO BE REMITTED BACK TO THE FILE OF THE LD.AO FOR SUCH VERIFICATION. HOWEVER WE ALSO MAKE IT VERY CLEAR THAT WE ARE NOT IN AGREEMENT WITH THE DIRECTION GIVEN BY THE LEARNED CIT(A) THAT THE ASSESSING OFFICER IS THEREFORE DIRECTED TO EXAMINE WHETHER THE PAYMENTS TO PIYURAJ ASSOCIATION IS MADE OUT OF THE WITHDRAWAL FROM THE BANK ACCOUNT WITHIN 3 DAYS FROM THE DATE OF WITHDRAWAL. IF YES, HE WOULD TREAT SUCH INVESTMENTS AS EXPLAINED, OTHERWISE UNEXPLAINED , AND THEREFORE, WE STRIKE DOWN THE SAME. ACCORDING LY, WE HEREBY REMIT THE CASE BACK TO THE FILE OF LD.AO, WI TH DIRECTIONS TO EXAMINE THE BOOKS OF ACCOUNTS OF THE ASSESSEE WITH RESPECT TO THE SOURCES OF PAYMENTS MADE TO M/S. PIYURAJ ASSOCIATIO N IN REGARD TO THE ITA NO.2344/AHD/2009 (AY 2003-04): MAHENDRA RAMLABH AYA VARMA VS ITO, 10(3), AHMEDABAD 5 INVESTMENT OF RS.21,40,250/- AND IF THE SAME ARE PR OPERLY EXPLAINED BY THE ASSESSEE AND ALL SUCH AMOUNTS ARE ABSORBED IN T HE CASH BOOK WITH GENUINE REASONS, THE ADDITION MAY BE DELETED. THE A SSESSEE IS ALSO DIRECTED TO COOPERATE PROMPTLY WITH THE REVENUE FOR SPEEDY DISPOSAL OF THE CASE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH, 2012 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - 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 DY. REGISTRAR, ITAT, AHMEDABAD