The ITO, Ward-9(2), Surat V. Smt. Leenaben Kantilal Narkani, Surat

ITA 2369/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5919 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-05-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 23-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H P MEENA
• Assessee Lawyers: POONAM JO SHI
• Keywords: Gift
• Section: 143(3); 133A; 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : A HMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON'BLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 2369/AHD./2008 ASSESSMENT YEAR : 2000-2001 INCOME TAX OFFICER, WARD-9(2), SURAT VS.-SMT. LEEN ABEN KANTILAL NAKRANI, SURAT (PAN : ACVPP 4726 B) (APPELLANT) (RESPONDENT) & C.O. NO. 202/AHD/2008 (ARISING OUT OF ITA NO. 2369/AHD/2008) ASSESSMENT YEAR : 2000-2001 SMT. LEENABEN KANTILAL NAKRANI, SURAT VS.- INCOM E TAX OFFICER, WARD-9(2), SURAT (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SMT. POONAM JO SHI DEPARTMENT BY : SHRI H.P. MEENA, SR. D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTI ON BY THE ASSESSEE ARE AGAINST THE ORDER DATED 28.04.2008 OF LEARNED COMMISSIONER OF I NCOME TAX(APPEALS)-V, SURAT FOR THE ASSESSMENT YEAR 2000-01. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APPEAL IS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A.) HAS ERRED IN DELETING THE ADDITION OF RS.15,00,000/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED OPENING CAPITAL. 2. BRIEFLY STATED THE FACTS ARE THAT IN THE ASSESSM ENT YEAR UNDER APPEAL, THE ASSESSEE FILED HER RETURN OF INCOME ON 29.03.2004 DECLARING TOTAL INCO ME OF RS.90,060/-. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 AND IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED THE RETURN OF INCOME ON 29.10.2007 D ECLARING INCOME OF RS.90,060/-. THE ASSESSING OFFICER ON VERIFYING THE RETURN FILED ON 29.03.2004 AND ITS SUPPORTING CAPITAL A/C. AND BALANCE-SHEET DISCOVERED THAT CAPITAL ACCOUNT REFLE CTED THE JUMP OF CAPITAL TO THE EXTENT OF RS.15,00,000/-. THE ASSESSING OFFICER ACCORDINGLY M ADE THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 ON 31.10.2007 AT TOTAL INCOME OF RS.15,90,000/-, WHEREIN HE MADE THE ADDITION OF RS.15,00,000/- ON PROTECTIVE BASIS UNDE R SECTION 68 OF THE INCOME TAX ACT, 1961. IN 2 ITA NO. 2369 & CO-202/AHD/2008 THIS ASSESSMENT ORDER, THE ASSESSING OFFICER ALSO O BSERVED IN PARA 3.6 ON PAGE-4 THAT TAKING INTO CONSIDERING THE ADMISSION MADE BY THE MOHANBHAI DHA NJIBHAI PATEL GROUP, THIS IS REQUIRED TO BE TAXED IN THE HANDS OF MOHANBHAI DHANJIBHAI PATEL SUBSTANTIVELY ALONGWITH THE ENHANCED CAPITAL OF RS.15,00,000/- ALTOGETHER WHICH WORKS OU T TO RS.15,00,000/- AN ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE. 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), THE ASSESSEE FILED THE WRITTEN SUBMISSIONS, WHICH READS AS UNDER :- 'AN ADDITION OF RS. I5,00,000/- HAS BEEN MADE ON AC COUNT OF JUMPING OF CAPITAL WITHOUT TAKING INTO CONSIDERATION THE SUBMISSIONS F ILED BY THE APPELLANT AND WITHOUT GIVING DUE CONSIDERATION TO THE FACT THAT M R. DANAWALE HAD CREATED LARGE NUMBER OF CAPITA! BUILT UP CASES. THE INVESTIGATION WING OF INCOME TAX DEPARTMENT HAD CONDUCTED SURVEY U/S 133A OF THE IT ACT IN THE CASE OF SHRI PANKAJ DANAWALA (CA.) ON 11-3-2005. SHRI DANAWALA I S A PRACTICING CA. THE INCOME TAX DEPARTMENT HAD NOTICED THAT MR. DANAWALE HAD CREATED LARGE NUMBER OF CAPITAL BUILT UP CASES. THE ASSESSING OFFICER HAS HIMSELF DISCUSSED IN PARA 1 OF THE ASSESSMENT ORDER THAT, THE DDIT (INV.)-II, SURAT IN HIS ELABORATED REPORT HAS MENTIONED THE MODUS OPERANDI ADOPTED IN CREATING BOGUS CAPITAL BY SHRI PANKAJ DANAWALA W HICH WAS BY WAY OF INCREASING THE OPENING BALANCE OF THE CAPITAL ACCOUNT WITH NO CORR ELATION WITH THE CLOSING BALANCE OF EARLIER YEAR AND ALSO BY BRINGING BOGUS GIFT OF EAR LIER YEAR AND ALSO BY BRINING BOGUS GIFT OF EARLIER YEARS TO CAPITAL ACCOUNT IN ONE YEAR. IT IS FURTHER STATED BY THE AO THAT IT WAS ALSO NOT ICED THAT, HE (SHRI PANKAJ DANAWALA) WAS INVOLVED IN CREATING BOGUS CAPITAL AND PROVIDIN G BOGUS CASH CREDIT ENTRIES TO VARIOUS CLIENTS. SHRI DANAWALA HAS ALSO PLAYED SUCH MISCHIE F IN APPELLANT'S CASE AND FILED COPIES OF FINAL ACCOUNTS WHICH HE ENCLOSED WITH THE ORIGIN AL RETURN OF THE INCOME WITHOUT THE KNOWLEDGE OF THE APPELLANT IT IS THE COMMON PRACTIC E THAT, THE RETURN IS FILED FROM THE OFFICE OF THE CA/ADVOCATE AND A CLIENT CAN NEVER TH INK THAT A CA CAN PLAY SUCH A MISCHIEF BEHIND HIS/HER BACK. THE APPELLANT IS QUITE UNAWARE ABOUT THE JUMPING OF CAPITAL OF RS. 15,00,000/- IN THE OPENING BALANCE OF THE CAPITAL A CCOUNT WHICH THE AO HAS ADDED TO THE TOTAL INCOME. IN THIS CONNECTION THE APPELLANT HAD FILED A SUBMISSION ALONG WITH A COPY OF AFFIDAVIT THIS IS DISCUSSED BY THE AO IN PARA 10 OF THE ASSESSMENT ORDER. THE INTENTION OF CREATING SUCH BOGUS CAPITAL BY SHRI DANAWALA WAS TO PROVIDE BOGUS CASH CREDIT ENTRIES TO HIS VARIOUS CLIENTS. IT MAY BE STATED HERE THAT, THE APPELLANT HAS NOT UTILIZED THE SO CALLED INCREASE IN CAPITAL MADE BY SHRI DANAWALA FO R GIVING CASH CREDIT TO ANY OTHER PERSON. FURTHER THE ASSESSING OFFICER HAS OBJECTED THAT, AS THERE WAS NO DENIAL IN RESPECT OF THE RETURN OF INCOME FILED ON 29.3.2004 BY THE ASSESSEE FOR THE AY 2003-04 TILL DATE. AND ALSO THAT THE RETURNS FILED ON 29.3.2004 AND THAT ON 22. 10.2007 BEARS THE SAME SIGNATURE. THE APPELLANT DO NOT DENY THAT HE HAS NOT SIGNED THE RE TURN FILED ON 29.3.2004, BUT HE DISOWNS THE CAPITAL ACCOUNT AND BALANCE SHEET ATTACHED TO I T. INFECT, THE KARTA OF THE HUF SHRI KANTILAL R NAKRANI USED TO GET HIS RETURNS IN HIS I NDIVIDUAL CAPACITY PREPARED BY SHRI PANKAJ DANAWALA AND SIGNED PAPERS CONSIDERING THE S AME BEING SIGNED AGAINST HIS INDIVIDUAL INCOME. THE APPELLANT TOTALLY DISOWNS TH E STATUS OF HUF. AND YOUR HONOUR WILL 3 ITA NO. 2369 & CO-202/AHD/2008 APPRECIATE THAT THE ANNEXURES TO THE RETURN DO NOT BEAR APPELLANT'S SIGNATURE AND ARE THE CREATION OF MR. PANKAJ DANAWALA BEHIND THE APPELLAN T'S BACK. IT IS ONLY THAT WHEN THE APPELLANT RECEIVED THE COPIES OF THE IMPOUNDED MATE RIAL HE CAME TO KNOW ABOUT THE FACT THAT SUCH MISCHIEF HAS BEEN PLAYED BY THEIR CA, SO QUESTION OF DENIAL OF SUCH RETURN PRIOR TO REOPENING OF CASE DOES NOT ARISE. THE COPIES OF ANNEXURE FOR THE ASSESSMENT YEAR 2002- 2003 AND 2003-2004 ATTACHED BY SHRI PANKAJ DANAWALA ARE BEING ENCLOSED HEREWITH AS ANNEXURE-B. THE A.O. HAS IN PARA 3.3 AND PARA 3.4 O F THE ASSESSMENT ORDER HAS NOT ACCEPTED THE INCOME AS DECLARED BY THE APPELLANT VI DE RETURN FILED U/S. 148 TREATING THE SAME AS A RESULT OF AFTER THOUGHT. WHEREAS IT WAS S UBMITTED BEFORE HIM THAT THE SAID INCOME WAS EARNED BY THE APPELLANT AS LABOUR INCOME . AS REGARD NO EXPLANATION WAS OFFERED AGAINST THE SHOW CAUSE, A REPLY WAS FILED B EFORE THE ASSESSING OFFICER THE EXTRACT OF THE SAME HAS BEEN ENUMERATED IN PARA 3.1 OF THE ASSESSMENT ORDER. MOREOVER, AS A PART OF JUDICIAL PROCESS THE APPELLA NT SHOULD HAVE BEEN PROVIDED A COPY OF STATEMENT OF SHRI PANKAJ DANAWALA RECORDED BY TH E DEPARTMENT DURING THE SURVEY. IF THIS HAS BEEN DONE BY THE DEPARTMENT WE COULD HAVE EXAMINED/CROSS EXAMINED SHRI PANKAJ DANAWALA, THEREFORE THE ADDITIONS MADE MEREL Y ON THE BASIS OF THE CAPITAL ACCOUNT AND BALANCE SHEET PREPARED BY THE SHRI PANK AJ DANAWALA AND ENCLOSED BY HIM WITH THE ORIGINAL RETURN BEING UNLAWFUL MAY KINDLY BE DELETED AS IT IS A WELL SETTLED LAW THAT, THE ASSESSEE CAN NOT BE PENALIZED FOR THE MIS TAKE/MISCHIEF OF THEIR CONSULTANT. ' 4. AFTER CONSIDERING THE AFORESAID SUBMISSIONS OF T HE LD. COUNSEL OF THE ASSESSEE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), IN THE IMPUGNED ORDER, DELETED THE ADDITION FOR THE DETAILED REASONS GIVEN IN PAGES 5-8 IN THE IMPU GNED ORDER, WHICH ARE EXTRACTED BELOW :- THE MAIN ISSUE RELATES TO ADDITION OF RS,15,00,000 /- AS ENHANCEMENT OF OPENING CAPITAL IN THE CAPITAL ACCOUNT ON PROTECTIVE BASIS. THE AO HAS ALSO ADDED RS.90,060/- ON PROTECTIVE BASIS, WHICH THE APPELLANT HAS CLAIMED A S HIS SUBSTANTIVE INCOME. THE PAPERS IMPOUNDED FROM THE PREMISES OF SHRI DANA WALA INDICATED AN ENHANCEMENT OF RS.15,00,000/-IN THE OPENING CAPITAL OF A.Y.2003-04 . ACCORDING TO THE AO, THE DIFFERENCE OF RS.15,00,000/- REPRESENTED THE UNEXPLAINED PORTI ON OF NEWLY INTRODUCED CAPITAL. MOST IMPORTANTLY, THE CAPITAL SO CREATED BY SHRI DANAWAL A WAS ONLY IN THE FORM OF ROUGH JOURNAL ENTRIES OR ROUGH ACCOUNTS AND HAD NOT BEEN ENTERED INTO THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. THE AO, HOWEVER, TREATED S UCH ENTRIES AS UNEXPLAINED PORTION OF NEWLY INTRODUCED CAPITAL AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. AS CAN BE SEEN THAT THE CLOSING BALANCE OF PRECEDIN G YEAR HAS BECOME AN ENHANCED OPENING BALANCE IN THE SUBSEQUENT YEAR. THEREFORE T HE CHARACTER OF THE DIFFERENTIAL AMOUNT IS TO BE ASCERTAINED. IT IS NOT THE CASE OF DEPARTMENT THAT THE UNACCOUNTED FUNDS WERE INTRODUCED IN THE BOOKS OF ACCOUNTS OR BANK AC COUNT UNDER THE GARB OF ENHANCED AND INFLATED OPENING BALANCE- IT HAS BEEN ALSO ASCE RTAINED THAT NO MONIES OUT OF SUCH OPENING BALANCE WERE WHOLLY OR PARTIALLY ADVANCED A S INTEREST BEARING LOANS TO ANY ONE. NOR HAS ANY PARTY UTILIZED SUCH FUNDS FOR ANY BUSIN ESS OR PERSONAL PURPOSES. SO THE APPELLANT HAS NOT DERIVED ANY FINANCIAL BENEFIT FRO M MANIPULATION OF OPENING BALANCE. IN THIS CASE ONLY THE CA OF THE APPELLANT HAS UNILATER ALLY FABRICATED FIGURES OF OPENING BALANCE ON AN UNSIGNED ALLEGED BALANCE SHEET PERHAP S TO BE READY TO GIVE ENTRIES AS AND WHEN THE OPPORTUNITY ARISES IN THE MARKET. BUT IN R EALITY IT COULD ONLY BE A PREPARATORY STEP WITHOUT ANY ACTUAL ENTRY GIVEN OR INCOME DERIV ED THERE FROM, SHRI PANKAJ DANAWALA VIDE HIS STATEMENT DATED 11/3/05 AS REPRODUCED ON P AGE 8 TO 11 OF THE ASSESSMENT ORDER HAS GIVEN A DETAILED MODUS OPERANDI WHEREIN THE ACT UAL UTILIZATION OF CAPITAL BUILD UP HAS 4 ITA NO. 2369 & CO-202/AHD/2008 BEEN CONFESSED IN CERTAIN CASES. IN THE APPELLANT'S CASE IT IS NOT SO. THE CIRCUMSTANCES AND FACTS, IN APPELLANT'S CASE RENDER THE DIFFERENT IAL AMOUNT ONLY A FICTIONAL CHARACTER AND LYING IN FICTITIOUS NAMES. THERE IS NO REAL FUN D WHICH IS AVAILABLE WITH THE APPELLANT EITHER IN HIS BOOKS OR BANK ACCOUNT OR STOOD EXPEND ED; INVESTED OR LOANED OUT ANYWHERE. HOW CAN POSSIBLY ANY IMAGINARY FIGURE, GATHERED FRO M ANY WHERE BE TAXED AS APPELLANT'S INCOME. SIMILARLY ALL THE SO CALLED ASSETS SHOWN AG AINST SUCH BOGUS CAPITAL WILL ACQUIRE SIMILAR FICTITIOUS CHARACTER. APEX COURT HAS HELD I N 43 ITR 387 (SC) IN THE CASE OF LALJI HARIDAS THAT, IN CASES WHERE IT APPEARS TO THE INCO ME-TAX AUTHORITIES THAT CERTAIN INCOME HAS BEEN RECEIVED DURING THE RELEVANT YEAR BUT IT I S NOT CLEAR WHO HAS RECEIVED THAT INCOME AND, PRIMA FADE, IT APPEARS THAT THE INCOME MAY HAVE BEEN RECEIVED EITHER BY A OR BY B OR BY BOTH TOGETHER, IT WOULD BE OPEN TO TH E INCOME-TAX AUTHORITIES TO DETERMINE THE QUESTION WHO IS RESPONSIBLE TO PAY TAX BY TAKIN G ASSESSMENT PROCEEDINGS BOTH AGAINST A AND B. THEREFORE THE PRESUPPOSITION AND BASIC REQ UIREMENT IS THE ACTUAL RECEIPT OF INCOME. IN THE INSTANT CASE NOTHING HAS BEEN RECEIV ED. ONLY THE FIGURE STANDS CREATED IN A CLANDESTINE MANNER. SECONDLY IT IS NOT ONLY THE RIG HT, BUT THE DUTY OF THE ASSESSING OFFICER TO CONSIDER WHETHER OR NOT THE BOOKS DISCLOSE THE T RUE STATE OF ACCOUNTS AND CORRECT INCOME CAN BE DEDUCED THEREFROM. THE TERM 'BOOKS OF ACCOUNT' WOULD MEAN THOSE BOOKS OF ACCOUNTS WHOSE MAIN OBJECT IS TO PROVIDE CREDIBL E DATA AND INFORMATION TO FILE THE TAX RETURNS. THE CREDIBLE ACCOUNTING RECORD PROVIDES TH E BEST FOUNDATION FOR FILING RETURN OF BOTH DIRECT AND INDIRECT TAXES. IT CANNOT BE UNDERS TOOD TO MEAN COMPILATION OR COLLECTION OF SHEETS WITH THE APPELLANT'S CA. THE LEGISLATIVE INTENT IS TO ADMIT ONLY THOSE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ON HIS OWN BEHAL F WHICH BY THEIR VERY NATURE AND CIRCUMSTANCES ARE MAINTAINED FOR THE PURPOSE OF DRA WING THE SOURCE OF INCOME. FOR MAKING ADDITION ON ACCOUNT OF UNEXPLAINED PORTION O F NEWLY INTRODUCED CAPITAL, THE CREDIT SHOULD HAVE BEEN MADE IN THE ASSESSEE'S BOOK S OF ACCOUNT KEPT IN THE REGULAR COURSE OF BUSINESS. SINCE, THE C.A. HAD ADMITTED TO HAVE CREATED THE ACCOUNTS HIMSELF, AND THE COMPLICITY OF THE ASSESSEE IN SUCH CREATION WAS NOT ESTABLISHED, THE CREDIT ENTRIES IN SUCH ACCOUNTS IN LOOSE SHEETS OF PAPER, COULD NO T BE TREATED AS ENTRIES IN THE ASSESSEE'S OWN BOOKS OF ACCOUNT KEPT IN THE REGULAR COURSE OF BUSINESS. IN THE INSTANT CASE INCOME HAS NOT BEEN EARNED IN R EALITY AND THEREFORE, NO TAXABILITY CAN BE FASTENED TO THE APPELLANT FOR UNEARNED INCOME. APPARENTLY THERE IS NO BENEFICIARY HERE IN THIS CAS E. BUT EVEN IF SOME ONE HAS CLAIMED ANY LOANS, EXPENDITURE OR ACQUISITION OF ANY ASSET, WHO SE SOURCE IS THIS FICTITIOUS; ENHANCED AND BOGUS CAPITAL FORMATION IN THE APPELLANT'S HAND S, THE SAME CAN NOT BE ALLOWED TO GO EXPLAINED OR ACCOUNTED FOR AND WILL HAVE TO BE TAXE D IN SUCH BENEFICIARY HANDS. MOST IMPORTANTLY, THE APPELLANT HAS FILED RETURN SHOWING INCOME OF RS.90,060/- AND WHICH HAS NO LINKAGES WITH THE CAPITAL INTRODUCED AS OPENING BALANCE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IT HAS MADE NO CLAIM, SOUGHT RELIEF OR ANY DEDUCTION BEFORE THE IT. DEPARTMENT. THEREFORE REJECTION OF ANY CLAIM OR HOL DING THE DIFFERENTIAL AMOUNT VIS-A-VIS PRECEDING YEAR'S CLOSING BALANCE BEING TAXABLE INCO ME OF THE YEAR UNDER CONSIDERATION INCASE OF THE APPELLANT IS FUTILE. HENCE HAVING APPLIED MY MIND TO THE ISSUE, IT IS HE LD THAT, THE AO WAS NOT JUSTIFIED IN RELYING UPON THE FICTITIOUS ENTRIES IN LOOSE SHEETS OF PAPER FOUND FROM THE PREMISES OF THE C.A. SHRI PANKAJ DANAWALA, WHO HAD ADMITTED TO HAVE CREATED SUCH ACCOUNTS HIMSELF. FURTHER, THESE ENTRIES WERE NEITHER SUPPORTED BY AN Y INDEPENDENT CORROBORATIVE EVIDENCE SO AS TO ESTABLISH THEIR GENUINENESS NOR WAS SUCH C APITAL UTILIZED BY ANY ONE, WARRANTING ANY ADDITION IN THE HANDS OF THE APPELLANT. IN THE LIGHT OF DISCUSSION AS ABOVE, THE ADDITION OF THE SUM OF RS.15,00,000/- MADE ON ACCOU NT OF UNEXPLAINED PORTION OF NEWLY 5 ITA NO. 2369 & CO-202/AHD/2008 INTRODUCED CAPITAL STAND DELETED. IT IS FURTHER HEL D THAT THE RETURNED INCOME OF RS.90,060/- SHOWN BY THE ASSESSEE SHALL BE TAXED AS HIS SUBSTAN TIVE INCOME. 5. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER O F INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE SHRI H.P. MEENA, SR. D.R. APPEARED AND RELYING ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER CONTENDED THAT ASSESSING OFFICER RIGHTLY MADE THE A DDITION OF RS.15,00,000/- UNDER SECTION 68 OF THE INCOME TAX ACT ON PROTECTIVE BASIS AND THE LEAR NED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN DELETING THE SAME. THE LD. D.R. POINTED OUT THAT BEFORE BOTH THE AUTHORITIES BELOW, THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTS TO DISOWN THE VARIOUS ENTRIES. THEREFORE, THE ADDITION WAS MADE ON PROTECTIVE BASIS ON THE BASIS OF RETURN OF INCOME FILED BY HER (THE ASSESSEE). THE RETURN OF INCOME IS A LEGAL DOCUMENT , WHICH CANNOT BE SAID TO BE ROUGH PAPER AND LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CLEARLY ERRED IN DELETING THE SAID ADDITION OF RS.15,00,000/-. 7. ON THE OTHER HAND, SMT. POONAM JOSHI, LD. COUNSE L APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). SHE POINTED OUT THAT THE ENTIRE EXERCISE OF REFLECTING CAPITAL REPRESENTED BY WAY OF ADVANCES THAT TOO WITHOUT PREPARATION OF ANY BOOKS OF ACCOUNTS WAS THAT OF SH RI PANKAJ DANAWALA, ABOUT WHICH A LAYMAN IS NOT COMPETENT ENOUGH AND CANNOT BE EXPECTED TO UNDE RSTAND THE IMPLICATION AND CONSEQUENCES OF SUCH AN ACT. THE LD. A.R. SUBMITTED THAT FICTITIOUS ENTRIES WERE NEITHER SUPPORTED BY ANY INDEPENDENT CORROBORATIVE EVIDENCE NOR SUCH CAPITAL WAS UTILIZED, THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 8. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE ASSESSING O FFICER, IN THE ASSESSMENT ORDER, HIMSELF OBSERVED THAT CONSIDERING THE ADMISSION MADE BY THE MOHANBHAI DHA NJIBHAI PATEL GROUP, THIS IS REQUIRED TO BE TAXED IN THE HANDS OF MOHANBHAI D HANJIBHAI PATEL SUBSTANTIVELY ALONGWITH THE ENHANCED CAPITAL OF RS.15,00,000/- ALTOGETHER WHICH WORKS OUT TO RS.15,00,000/- AN ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE. THIS CLEARLY INDICATES THAT THE ASSESSING OFFICER HIMSELF WAS NOT SURE WHETHER THIS INCOME OF RS.15,0 0,000/- IS EARNED AND ACTUALLY BELONGED TO THE ASSESSEE. THE ASSESSEE HAS FILED AN AFFIDAVIT B EFORE THE ASSESSING OFFICER. FROM THE PERUSAL OF 6 ITA NO. 2369 & CO-202/AHD/2008 THE SAME AND AFTER CONSIDERING THE TOTALITY OF THE FACTS AND REASONING GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), WE ARE CONVINC ED THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS.15,00,000/- ON THE BASIS OF FICTITIO US ENTRIES IN LOOSE SHEETS OF PAPER FOUND FROM THE PREMISES OF THE C.A. SHRI PANKAJ DANAWALA, WHO HAD ADMITTED TO HAVE CREATED SUCH AMOUNTS HIMSELF. THEREFORE, THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITION OF RS.15,00,000/-, WHICH WAS MADE BY THE ASSESSING OFFICER IN THE HANDS OF ASSESSEE ON PROTECTIVE BASIS. RESULTAN TLY, THE GROUND OF APPEAL RAISED BY THE REVENUE IS REJECTED. 9. NOW WE TAKE UP THE CROSS OBJECTION BEING CO NO. 202/AHD/2008 FILED BY THE ASSESSEE, IN WHICH THE ASSESSEE HAS RAISED ONLY ONE GROUND, W HICH READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS JUS TIFIED IN DELETING THE ADDITION OF RS.15,00,000/- MADE BY ASS ESSING OFFICER ON ACCOUNT OF UNEXPLAINED OPENING CAPITAL. 10. AS WE HAVE ALREADY DECIDED THE ISSUE IN REVENUE S APPEAL ABOVE, THEREFORE, THIS ISSUE RAISED BY THE ASSESSEE IS RENDERED INFRUCTUOUS AND THE SAME IS REJECTED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS CROSS OBJECTION BY THE ASSESSEE BOTH ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 18.06.2010 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 / 06 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.