Shri Sunilkumar H. Desai, Surat V. The ACIT., Cent.Circle-1, Surat

ITA 2360/AHD/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0337 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-10-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 08-11-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHUDHANSHU JHA
• Assessee Lawyers: J P SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 7.10.09 DRAFTED ON: 7.10.2009 ITA NO.2360/AHD/2005 ASSESSMENT YEAR : 2002-2003 SUNILKUMAR H. DESAI 2, RAVINDRA PARK SOCIETY, NEAR MAKKAI POOL, ADAJAN ROAD, SURAT. VS. A.C.I.T. CENTRAL CIRCLE-1, ROOM NO.505, AAYAKAR BHAVAN, OPP. NEW CIVIL HOSPITAL, MAJURA GATE, SURAT-395 001. PAN/GIR NO. : AFUPD 8231 P (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI J.P.SHAH RESPONDENT BY: SHRI SHUDHANSHU JHA SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF THE LD.CIT(A)-II, AHMEDABAD, DATED 23.08.2005 BY TAKING FOLLOWING GRO UNDS OF APPEAL. 1) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION ON ACCOUNT OF INTRODUCT ION OF CAPITAL IN M/S. OHM DEVELOPERS OUT OF INCOME FROM UNDISCLOSED SOURC ES OF THE TUNE OF RS.3,00,000/-. 2) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION ON ACCOUNT OF INTRODUCT ION OF CAPITAL IN M/S. OHM DEVELOPERS OUT OF ALLEGED INCOME FROM UNDISCLOS ED SOURCES OF THE TUNE RS.1,00,000/-. 3) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION FOR CONTRIBUTION T OWARDS HOUSEHOLD EXPENSES OUT OF ALLEGED UNDISCLOSED SOURCES OF INCO ME TO THE TUNE OF RS.45,000/-. ITA NO.2360/AHD/2 005 SUNILKUMAR H. DESAI ASST.YEAR -2002-2003 - 2 - 4) IT IS THEREFORE, PRAYED THAT ALL THE ABOVE ADDIT IONS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE DELE TED. 5) THE APPELLANT PRAYS FOR GRANTING SUCH OTHER RELI EF AS MAY BE DEEMED JUST AND PROPER BY YOUR HONOURS CONSIDERING THE FACTUAL AND LEGAL ASPECTS OF THE CASE OF THE APPELLANT. 6) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DELETE, SUBSTITUTE OR MODIFY ANY OR ALL OF THE GROUNDS OR GROUNDS OF APPE AL. 2. SINCE, THE FACTS AND ISSUE INVOLVED IN THE ABOVE GROUNDS ARE COMMON, THEY ARE BEING DISPOSED OF TOGETHER AS UNDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E INVESTED RS.3 LACS AS CAPITAL IN M/S.OHM DEVELOPERS AND RS.1 LAC IN M/S. OHM ORGANIZERS. THE ASSESSEE SUBMITTED THAT A SEARCH TOOK PLACE IN THE CASE OF THE ASSESSEE ON 29.10.1999. THE ASSESSEE FILED BLOCK RETURN DECLAR ING UNDISCLOSED INCOME OF RS.14,50,000/-. IT WAS SUBMITTED THAT AS A RESULT O F THE ABOVE RETURN, CASH BALANCE OF RS.5,96,236/- GOT BUILD UP AS PER BALANC E-SHEET AS ON 29.10.1999. THEREFORE, THE ASSESSEE CONTENDED THAT INVESTMENT O F RS.3 LACS AND RS.1 LAC IN M/S. OHM DEVELOPERS AND M/S. OHM ORGANIZERS RESPECT IVELY MAY BE ACCEPTED AS INVESTMENT MADE FROM THE CASH BALANCE OF RS.5,96,2 36/-. AS NO EVIDENCE WAS FILED NOR BOOKS OF ACCOUNT WAS PRODUCED BEFORE THE LEARNED ASSESSING OFFICER, THE LEARNED ASSESSING OFFICER TREATED THE SAME AS U NEXPLAINED INVESTMENT AND MADE ADDITION TO THE INCOME OF THE ASSESSEE. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT THE ASSESSEE NEITHER FURNISHED ANY EVIDENCE NOR BOOKS O F ACCOUNTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE OBSERVED THAT THE LEA RNED ASSESSING OFFICER ALLOWED ADEQUATE OPPORTUNITY BEFORE MAKING THE ABOV E ADDITION. IT IS NOTED FROM THE FACTS OF THE CASE THAT ASSESSEE FAILED TO EXPLA IN BOTH THE AMOUNTS IN THE PRESENT YEAR. IT IS SEEN THAT THESE AMOUNTS CANNOT BE RELATED TO THE BLOCK ITA NO.2360/AHD/2 005 SUNILKUMAR H. DESAI ASST.YEAR -2002-2003 - 3 - ASSESSMENT OR BLOCK RETURN. FACTS AND CIRCUMSTANCE S OF THE CASE INDICATE THAT THERE WAS NO OPTION WITH THE LEARNED ASSESSING OFFI CER BUT TO MAKE THE ADDITION SINCE THE ASSESSEE COULD NOT ESTABLISH THE GENUINEN ESS OF THE ABOVE AMOUNTS AND CONFIRMED THE ADDITION. 5. WITH REGARD TO ADDITION OF RS.90,000/- ON ACCOUN T OF UNDERSTATEMENT OF HOUSEHOLD EXPENSES, THE LEARNED ASSESSING OFFICER M ADE THE ADDITION ON THE GROUND THAT THE HOUSE HOLD EXPENDITURE SHOWN WAS LO W. THE LEARNED ASSESSING OFFICER MADE THE ADDITION ON THE ESTIMATE OF THE TO TAL FAMILY EXPENDITURE FOR THE YEAR UNDER REFERENCE AT RS.1,80,000/-. THE ASSESSE E SUBMITTED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THAT TH E ASSESSEE HAD MADE WITHDRAWALS FOR HOUSEHOLD EXPENSES FOR RS.38,000/- AND LEARNED ASSESSING OFFICER ESTIMATED RS.90,000/- AS THE WITHDRAWALS MA DE BY HIS WIFE, WHICH WOULD BE SUFFICIENT TO MEET THE HOUSEHOLD EXPENSES. THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) HELD THAT PERUSAL OF THE FACT R EVEALS THAT THE HOUSEHOLD EXPENSES SHOWN BY THE ASSESSEE ARE LOW AND IT WOULD BE FAIR AND REASONABLE TO SUSTAIN ADDITION OF RS.45,000/-. ACCORDINGLY, HE SU STAINED ADDITION OF RS.45,000/- AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS. 4 5,000/-. 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT IN THE BALANCE SHEET DRAWN FROM THE DATE OF SEARCH ON 29.10.1999, CASH BALANCE WAS SHOWN AT RS.5,96,236/- AND THE SAME WAS AVAILAB LE WITH THE ASSESSEE FOR MAKING INVESTMENT IN THE PARTNERSHIP FIRM M/S. OHM DEVELOPERS IS RS.3 LACS AND M/S.OHM ORGANIZERS IS RS.1 LAC. FURTHER, IF IT IS HELD THAT THE HOUSE WITHDRAWALS SHOWN BY THE ASSESSEE WERE LOW THEN THE ADDITION OF RS.45,000/- MADE BY THE LEARNED ASSESSING OFFICER SHOULD ALSO BE TELESCOPED WITH RS.5,96,236/-. HE SUBMITTED THAT THE MATTER SHOULD BE RESTORED BACK T O THE FILE OF THE LEARNED ASSESSING OFFICER FOR ALLOWING TELESCOPING WITH THE CASH BALANCE SHOWN OF ITA NO.2360/AHD/2 005 SUNILKUMAR H. DESAI ASST.YEAR -2002-2003 - 4 - RS.5,96,236/- ON 29.10.1999 AFTER VERIFYING THE SAM E FROM THE FUND FLOW STATEMENT, BALANCE-SHEET AND BOOKS OF ACCOUNT OF TH E ASSESSEE FOR THE ASSESSMENT YEAR 2000-01, 2001-02. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MA DE INVESTMENT AS CAPITAL CONTRIBUTION WITH THE FIRM M/S. OHM DEVELOPERS RS.3 LACS AND M/S. OHM ORGANIZERS RS.1LAC IN CASH. THE ASSESSEE COULD NOT EXPLAIN SOURCE OF SUCH CAPITAL INVESTMENT AND THEREFORE HE ADDED THE SAME TO THE I NCOME OF THE ASSESSEE. FURTHER, THE LEARNED ASSESSING OFFICER OBSERVED THA T THE ASSESSEE HAS SHOWN DRAWINGS OF RS.38,000/- ONLY FOR HOUSEHOLD EXPENSES AND THEREFORE, HE ADDED RS.90,000/- ON ACCOUNT OF LOW DRAWINGS TO THE INCOM E OF THE ASSESSEE. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ADDITION OF RS.4 LACS AND HE CONSIDERED THAT ASSESSEES DRAWING AT RS.83,000/- AS REASONABLE AND THEREBY CONFIRMED ADDITION OF RS.45,000/- ONLY IN RESPECT OF DRAWING. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE SUBMITTED THAT A SEARCH AND SEIZER OPERATION WAS CONDUCTED IN THE CA SE OF THE ASSESSEE ON 29.10.1999 AND AS PER THE BALANCE SHEET DRAWN UP TO THAT DATE, THE CASH AVAILABLE WITH THE ASSESSEE AS ON THAT DATE WAS RS. 5,96,236/-. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT DEPOSIT OF RS.4 LACS AND DRAWINGS OF RS.45,000/- WERE INCURRED OUT OF TH E ABOVE CASH AVAILABLE WITH THE ASSESSEE AND THEREFORE, THERE SHOULD NOT HAVE B EEN ANY ADDITION ON ACCOUNT OF AFORESAID INVESTMENT AND EXPENDITURE. HOWEVER, W E FIND THAT NO MATERIAL REGARDING UTILIZATION OF CASH AFTER 29.10.1999 TILL THE DATE OF INVESTMENT IN ITA NO.2360/AHD/2 005 SUNILKUMAR H. DESAI ASST.YEAR -2002-2003 - 5 - QUESTION AND EXPENDITURE IN QUESTION WAS FILED BY T HE ASSESSEE BEFORE US OR BEFORE THE LOWER AUTHORITIES. THE LEARNED AUTHORISE D REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT HE IS IN A POSITION TO SUBM IT THE DETAILS OF CASH AVAILABLE WITH THE ASSESSEE IF AN OPPORTUNITY IS ALLOWED. IN OUR CONSIDERED OPINION, THE DETAILS OF CASH IS REQUIRED TO BE VERIFIED BY THE L EARNED ASSESSING OFFICER ALSO. IN THE CIRCUMSTANCES IN THE INTEREST OF JUSTICE, WE RE STORE THE ABOVE ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER AND DIRECT THE LEA RNED ASSESSING OFFICER TO RE- ADJUDICATE THE ISSUE AFRESH AS PER LAW AFTER VERIFI CATION OF CASH ACCOUNT TO BE FURNISHED BY THE ASSESSEE. THE ASSESSEE IS ALSO DIR ECTED TO FURNISH THE DETAILS OF CASH ACCOUNT AS AND WHEN REQUIRED BY THE LEARNED AS SESSING OFFICER. NEEDLESS TO MENTION THAT LEARNED ASSESSING OFFICER SHALL ALLOW PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE AFRES H. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF THE HEARING ON 8.10.2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 8/10/2009 PARAS# COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD