Smt. Madhuben Ashokkumar Chhatra, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-3 (1), RAJKOT-GUJARAT

ITA 25/RJT/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8862 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAMITA KHURANA
• Assessee Lawyers: MJ RANPURA
• Keywords: Unexplained investment; Capital asset; Business income; Salary income; Transactions in derivatives
• Section: 80C; 142(1); 10B; 68; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI PRAMOD KUMAR, ACCOUNTATN MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 47/RJT/2015 & 25/RJT/2016 / ASSTT. YEAR: 2009-2010 MADHUBEN ASHOKBHAI CHHATRA, MA ANANDAMI KANYA VIDHYALAY, LAXMI NAGAR, 1- RADHA NAGAR, RAJKOT. VS. THE INCOME TAX OFFICER, WARD-3(1), RAJKOT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : M.J. RANPURA, A.R REVENUE BY : NAMITA KHURANA, SR. D.R / DATE OF HEARING : 30/01/2018 / DATE OF PRONOUNCEMENT: 17/04/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF ASSESSEE AGAINST THE ORDER OF LD. CIT(A) DATED 31.1 2.2014 AND 19.11.2015 PASSED IN A.Y. 2010-11. ITA NO. 47/RJT/2 015 AROSE AGAINST THE PROCEEDINGS TAKEN UNDER SECTION 144 OF THE INCOME TAX ACT IN OTHER WORDS IT IS A QUANTUM APPEAL. WHEREAS ITA NO. 25/RJT/2016 AROSE AGAINST THE LEVY OF PENALTY U/S. 271B OF THE ACT FOR NOT GETTING THE ACCOUNT AUDITED U/S. 44AB OF THE IN COME TAX ACT. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 2 FIRST WE TAKE QUANTUM APPEAL I.E ITA NO. 47/RJT/201 5 2. GROUND NO. 1 IS A GENERAL GROUND OF APPEAL HENCE DOES NOT CALL FOR RECORDING OF ANY SPECIFIC FINDING. 3. IN GROUND NO. 2 ASSESSEE HAS PLEADED THAT LD. CI T(A) HAS ERRED ON FACTS AS ALSO IN LAW IN REJECTING THE CONTENTION OF ASSESSEE THAT ORDER PASSED BY THE ASSESSING OFFICER U/S. 144 OF T HE INCOME TAX ACT DESERVES TO BE QUASHED. NO DOUBT ASSESSING OFFICER HAS ISSUED NUMBER OF NOTICES AND THEREAFTER PASSED AN EX-PARTY ASSESSMENT ORDER ACCORDING TO HIS BEST OF JUDGMENT U/S. 144 OF THE INCOME TAX ACT. BUT LD. CIT(A) HAS TAKEN INTO CONSIDERATION AL L THE EVIDENCES AND THEREAFTER PASSED AN ORDER ON MERIT. WE DO NOT SEE ANY ERROR IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THIS GROUND OF APPEAL IS REJECTED. GROUND NO. 3 & 4 4. BOTH THE GROUNDS ARE INTER CONNECTED WITH EACH O THER, IN BRIEF ISSUE INVOLVED IN THESE GROUNDS RELATES TO ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT HELD WITH R AJKOT COMMERCIAL CO-OPERATIVE BANK LTD. THERE WERE CASH DEPOSIT OF R S. 15,30,000/- AND CHEQUE DEPOSIT OF RS. 15,81,000/-. LD. CIT(A) C ONFIRMED THE ADDITION OF RS. 15,30,000/- OUT OF CASH DEPOSIT IN THIS CASH ACCOUNT AND 3,00,000/- OUT OF CHEQUE DEPOSITS. 5. THE GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 18,30,000/- ON ACCOU NT OF UNEXPLAINED DEPOSITS (CASH + CHEQUE) IN THIS BANK ACCOUNT. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 3 6. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HER RETURN OF INCOME ON 07.07.2010 DECLARING TOTAL INCOME OF R S. 2,05,208/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U/S. 143(2) WAS ISSUED AND SERVED UPON THE A SSESSEE. LD. ASSESSING OFFICER HAS ISSUED NUMBER OF NOTICES U/S. 142(1) BUT THESE WERE NOT REPLIED. THE LD. ASSESSING OFFICER THEREAF TER PASSED AN EX- PARTY ASSESSMENT ORDER. HE FOUND THAT RS. 15,81,000 /- WERE CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE WITH RAJKOT COM MERCIAL COOPERATIVE BANK LTD. THROUGH CLEARANCE OF CHEQUE. SIMILARLY HE FOUND A CASH DEPOSIT OF RS. 15,30,000/- ACCORDING T O THE ASSESSING OFFICER ASSESSEE FAIL TO GIVE ANY PLAUSIBLE EXPLANA TION INDICATING THE SOURCE OF DEPOSIT IN THIS ACCOUNT. HENCE HE MADE AN ADDITION OF RS. 31,11,000/-. 7. DISSATISFIED WITH THE ASSESSMENT ORDER ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). SHE SUBMITT ED A DETAIL REPLY WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A). FOR AP PRECIATING THE CONTROVERSY IN MORE SCIENTIFIC AND CONVENIENT MANNE R, WE DEEM IT APPROPRIATE TO TAKE NOTE RELEVANT PART OF THIS EXPL ANATION WHICH READ AS UNDER:- 4. GROUNDS NO.2, 4 & 5 ARE INTER-LINKED, AND HENCE, THEY ARE TAKEN UP TOGETHER. BEFORE ME, THE AR OF THE APPELLANT FILED WRITTEN SUBMISSION, WHICH READS AS UNDER:- GROUND OF APPEAL RELATED TO ADDITION OF RS 15,30,00 0/- AND RS .15,81,000/- IN BANK ACCOUNT RESPECTIVELY BY CASH DEPOSITS AND CRED ITS BY CLEARING I TRANSFER AS UNEXPLAINED INVESTMENTS U/S 69 OF THE ACT AS ALSO E STIMATION OF INCOME FROM TRADING IN SHARES (A) BEFORE SUBMITTING EXPLANATION TO THE ADDITIONS MADE BY THE AO, THE APPELLANT MOST RESPECTFULLY SUBMITS THE BACKGROUND OF THE APP ELLANT'S CASE FOR YOUR KIND PERUSAL. BASICALLY THE APPELLANT IS A TEACHER BY PR OFESSION AND HAD CARRIED OUT HER DUTY AS A TEACHER WITH DIGNITY AND INTEGRITY. T HE APPELLANT MARRIED TO A PERSON WHOSE FAMILY WAS IN THE FOREFRONT DURING THE FREEDOM STRUGGLE. BESIDES, THE APPELLANT'S HUSBAND WAS WORKING WITH THE POLICE DEPARTMENT AND HE IS ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 4 RETIRED NOW. ALL THROUGH THE APPELLANT'S LIFE, THE APPELLANT'S LIFE WAS CONFINED TO SCHOOL, TEACHING ACTIVITIES AND LOOKING AFTER THE F AMILY. THE APPELLANT BEGS TO EMPHASIZE THIS FACT BECAUSE, THE ISSUES EMANATING F ROM THE APPELLANT'S CASE PERTAINS TO TRADING IN FUTURES, OPTIONS AND SHARE D ERIVATIVES, WHICH THE APPELLANT HAD NEVER HEARD OF BEFORE, TILL THE APPELLANT RECEI VED THE INCOME TAX NOTICE. B) THE ENTIRE EPISODE OF TRADING IN SHARES / F&O AN D DEPOSITS IN BANK ACCOUNT WAS DUE TO MISDEEDS OF THE APPELLANT'S CHILDREN. THE AP PELLANT'S ELDER SON, ASHISH A CHHATRA, BECAME A JOINT HOLDER IN THE APPELLANT'S B ANK ACCOUNTS. THE APPELLANT BLINDLY TRUSTED THE ACTIVITIES OF THE SON. HOWEVER, LESSER DID THE APPELLANT KNOW THAT THE SON OF THE APPELLANT WAS ACTING AS AN AGENT FOR ONE OF THE SHARE BROKER, WHOSE PRIMARY ACTIVITY WAS RUNNING A PONZI SCHEME, LURING INVESTORS INTO INVESTING IN THEIR SCHEMES, PROMISING HIGH RETURNS AND THEN SIPHONING OFF SUCH FUNDS. (B) THE SON OF THE APPELLANT ALONG WITH HIS YOUNGER BRO THER, ACTED AS AGENTS FOR ONE SHRI DEVEN MALAVIYA, WHO PROMISED HIGH RETURNS IN H IS INVESTMENT SCHEMES. AS AGENTS, THE CHILDREN OF THE APPELLANT COLLECTED FUN DS FROM VARIOUS PERSONS AND INVESTED IN THE SCHEME OF DEVEN MALAVIYA, WHO WAS R UNNING HIS BUSINESS THROUGH THE FIRM KNOWN AS M/S. VISION EQUITIES & CO MMODITIES. LATER ON, THE SCHEME FLOPPED AND SHRI DEVEN MALAVIYA COMMITTED SU ICIDE. THE PAPER CUTTING OF THIS NEWS ARE ATTACHED. (D) THEREAFTER, SINCE THE CHILDREN OF THE APPELLAN T STARTED GETTING THREATENING CALLS, THE APPELLANT WAS FORCED TO REMOVE THE CHILDREN FRO M THE HOUSE. SINCE THEN, THE APPELLANT AND HER RETIRED HUSBAND IS STAYING ALL AL ONE AND FACING SOCIAL DISGRACE. (E) FURTHER THE FACT THAT ALL THE CREDITS IN THE B ANK ACCOUNT AND SHARE TRADING / F&O TRANSACTIONS WERE CARRIED OUT BY THE APPELLANTS' CH ILDREN IS PROVED FROM THE FACT THAT AO HAS LISTED THE DATES OF HEARING. THIS IS NOT BEC AUSE THE APPELLANT WAS NON- COOPERATIVE BUT THE NON-ATTENDANCE WAS DUE TO THE F ACT THAT THE APPELLANT DID NOT KNOW WHAT TO DO. ALL THESE FACTS CAME TO SURFACE WI TH THE ISSUE OF THE FIRST NOTICE BY THE INCOME TAX DEPARTMENT. IN FACT, DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD COMMUNICATED WITH THE BANKS, ASKING T HEM TO FURNISH THE DETAILS OF THE ALLEGED DEPOSITS, SO THAT NECESSARY EXPLANATION CAN BE SUBMITTED TO THE AO. (F) WITH THIS BACKGROUND, THE APPELLANT NOW SUBMIT THE DETAILED CLARIFICATION / SUBMISSION AGAINST THE ADDITIONS MADE SINCE ALL THE ADDITIONS AND GROUNDS OF APPEAL ARE INTERLINKED. (I) AS FAR AS FINALIZATION OF ASSESSMENT U/S 144 OF THE ACT IS CONCERNED, YOUR HONOUR'S KIND ATTENTION IS INVITED TO PARA 2 OF THE ASSESSMENT ORDER WHEREIN ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 5 THE AO HAS CATEGORICALLY STATED THAT SHRI JATIN RAV ANI, THE AR AND SHRI ASHOKBHAI CHHATRA HUSBAND OF THE APPELLANT ATTENDED AND FURNISHED THE DATA IN RESPECT OF LOANS RECEIVED FROM FOUR PERSONS . COPY OF CASH BOOK, DEATH CERTIFICATE OF JAYSHREEBEN ATULBHAI (A CREDIT OR FOR RS. 2,97,000/-), CONFIRMATION OF SHRI BHARATBHAI P. VACHHANI AND SOU RCE OF DEPOSIT BEING WITHDRAWAL FROM PROVIDENT FUND BY ASHOKBHAI CHHATRA . THUS FINALIZATION OF ASSESSMENT U/S 144 OF THE ACT IS NOT JUSTIFIED. (II) AS REGARDS THE CASH DEPOSITS OF RS.L5,30,000/- IN T HE BANK ACCOUNT IS CONCERNED APPELLANT RESPECTFULLY SUBMITS THAT SHE I S A PRIMARY SCHOOL TEACHER AND MAINTAINS HER REGULAR BANK ACCOUNT WITH SBI. HOWEVER, HER SON HAS OPENED A JOINT BANK ACCOUNT WITH RAJKOT COMMERC IAL CO-OP BANK LTD AND CARRIED OUT THE TRANSACTION IN SHARES WITHOUT H ER KNOWLEDGE. LATER IT WAS TRANSPIRED THAT, HE OBTAINED FUNDS FROM VARIOUS PERSONS AND CREDITED IN VARIOUS NAMES INCLUDING THAT OF THE APPELLANT. THIS FACT IS EVIDENT FROM THE CASH BOOK FILED DURING THE COURSE OF ASSESSMENT PRO CEEDINGS A COPY THEREOF IS ATTACHED. THE APPELLANT PRAYS THAT, THE APPELLAN T IS NOT AT ALL AWARE OF THESE TRANSACTIONS AND HENCE, THE SAME MAY BE TREAT ED AS THE TRANSACTIONS OF THE APPELLANT'S SON AND WHATEVER RECOURSE MAY BE TA KEN UNDER THE INCOME TAX ACT, MAY KINDLY BE TAKEN IN HIS CASE. BUT THE A PPELLANT MAY NOT BE PENALIZED OF THE ACTIONS OF HER CHILDREN. (III) SO FAR AS CREDIT OF RS. 15,81,000/- IN BANK ACCOUNT BY CLEARING / TRANSFER IS , THE AO VIDE PARA 2 OF THE ASSESSMENT ORDER STATED T HE APPELLANT HAD FURNISHED CONFIRMATIONS ETC. IN RESPECT OF FOUR CRE DITORS AS STATED IN PARA (B) ABOVE. THE DETAILS OF THESE CREDITORS ARE ONCE AGAIN FURNISHED AS UNDER:- SR. NO. NAME OF THE DEPOSITOR. AMOUNT (RS.) REMARKS. 1 ASHOKBHAI CHHATRA 2,50,000 CONFIRMATION, COPY OF BANK ACCOUNT BEING WITHDRAWAL FROM GPF IS ATTACHED. 2 CHEQUE NO. 880538 DATED 25.11.2009 OF BOB 3,00,000 COPY OF LETTER TO RRC BANK AND BY RCC BANK TO BOB SEEKING DETAILS OF THE BANK DETAILS IS ATTACHED. 3 BHARATBHAI VACHHANI 4,00,000 CONFIRMATION WITH BANK DETAILS IS FURNISHED BY THE DEPOSITOR IS ATTACHED. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 6 4 JAYSHREEBEN SEJPAL. 2,97,000 DEATH CERTIFICATE AND CONFIRMATION IS FILED BEFORE AO AS STATED IN PARA 2 OF THE ASSESSMENT ORDER. 5 VIKRAMBHAI SEJPAL. 2,67,000 CONFIRMATION IS FILED BEFORE AO. (IV) THUS, THE CREDIT IN THE BANK ACCOUNT THOUGH CHEQUES IS EXPLAINED TO THE EXTENT OF RS.15,14,000/-. AS REGARDS THE BALANCE AM OUNT OF RS. 67,0007-ARE MISCELLANEOUS ENTRIES INCLUDING THE DIVIDEND INCOME ETC. (V) WITHOUT PREJUDICE TO THE ABOVE, THE ENTIR E CASH AND THE CHEQUES DEPOSITED IN THE BANK ACCOUNT WERE USED IN THE SHARE TRANSACTION WITH ANUGRAH STOCK AND BROKING PVT. LTD AND M/S VIBRANT EQUITIES. AS STATE D ABOVE ALL THE TRANSACTIONS WERE CARRIED OUT BY THE SON OF THE APPELLANT AND APPELLA NT HAS NO KNOWLEDGE ABOUT THE SAME. FURTHER, IT IS THE AO WHO HAD COLLECTED THE D ATA AND SUPPLIED TO THE APPELLANT AS APPELLANT WAS NOT AT ALL AWARE ABOVE ABCD OF THE SHARE DEALING / F & O TRANSACTIONS. FURTHER THE AO IN THE COURSE OF ASSES SMENT PROCEEDINGS, FROM THE COLLECTED DATA OF M/S ANUGRAH STOCK AND BROKING PVT . LTD WORKED LOSS OF RS. 22,22,494/- SUFFERED BY THE APPELLANT. HOWEVER, NEI THER THE APPELLANT NOR THE AO WAS IN POSSESSION OF STATEMENT OF TRANSACTIONS WITH VIBRANT EQUITIES, EVEN THOUGH THE AO ESTIMATED A PROFIT OF RS.25,000/- IN THE TRANSAC TIONS THROUGH VIBRANT EQUITIES. IN THIS REGARD APPELLANT SUBMITS THAT THE ENTIRE TRANS ACTIONS IN THE STOCK MARKET WERE MADE THROUGH BANKING CHANNEL BY HER SONS AND AS SUC H THE QUESTION OF ANY ESTIMATION OF PROFIT FROM THE TRANSACTIONS WITH VIB RANT EQUITIES DOES NOT ARISES. (VI) FROM THE FACTS NARRATED ABOVE, ASSUMING BU T NOT ADMITTING THAT THE CASH OF RS.15.30 LAKHS DEPOSITED IN THE BANK ACCOUNT IF HEL D TO BE UNEXPLAINED AND HELD AS BELONGING TO THE APPELLANT, THEN THE LOSS OF RS. 22 .22 LAKHS SUFFERED IN THE STOCK TRANSACTION CARRIED OUT THROUGH THIS ACCOUNT WHICH IS NOT REFLECTED IN THE BOOKS OF ACCOUNT GETS SET OFF AS BOTH THE SIDES ARE UNRECORD ED IN THE BOOKS OF ACCOUNT. HENCE NET LOSS WOULD BE RS. (22.22 - 15.30 ) LAKHS TO BE CARRIED FORWARD TO THE NEXT YEAR. HOWEVER, THE AO THOUGH VERIFIED ALL THE TRANSACTIONS MADE TH ROUGH THIS BANK ACCOUNT AND THE ACCOUNT OF THE APPELLANT WITH REGIS TERED BROKER BUT DID NOT GIVE SET OFF OF BUSINESS LOSS INCURRED IN THE INTRA HEAD OF ACCOUNT AS PROVIDED IN SECTION 70(1) OF THE ACT. IN ORDER TO APPRECIATE THE FACTS ON HAND PROVISIONS OF SECTION 70 IS REPRODUCED BELOW: SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 7 70. (1) SAVE AS OTHERWISE PROVIDED IN THIS ACT, WHE RE THE NET RESULT FOR ANY ASSESSMENT YEAR IN RESPECT OF ANY SOURCE FALLING UN DER ANY HEAD OF INCOME, OTHER THAN 'CAPITAL GAINS', IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST HIS INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD. (2) WHERE THE RESULT OF THE COMPUTATION MADE FOR AN Y ASSESSMENT YEAR UNDER SECTIONS 48 TO 55 IN RESPECT OF ANY SHORT-TERM CAPI TAL ASSET IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS S ET OFF AGAINST THE INCOME, IF ANY, AS ARRIVED AT UNDER A SIMILAR COMPUTATION MADE FOR THE ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASSET. (3) WHERE THE RESULT OF THE COMPUTATION MADE FOR AN Y ASSESSMENT YEAR UNDER SECTIONS 48 TO 55 IN RESPECT OF ANY CAPITAL ASSET ( OTHER THAN A SHORT-TERM CAPITAL ASSET) IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST THE INCOME, IF ANY, AS ARRIVED AT UNDER A S IMILAR COMPUTATION MADE FOR THE ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASS ET NOT BEING A SHORT-TERM CAPITAL ASSET.] (VII) THUS, WHILE GIVING THE TREATMENT OF CASH AND SUNDRY DEPOSITS BY CHEQUE AS UNEXPLAINED INVESTMENT U/S 69 A, AS PER PROVISIONS OF SECTION 70(1) OF THE ACT, THE AO WAS REQUIRED TO GIVE SET OFF OF TRADING LOSS IN SHARES / F & O OF RS. 22.22 LAKHS RESULTING IN NET LOSS OF RS. 6.92 LAKHS. HON'BLE HI GH COURT OF GUJARAT HAS IN THE CASE OF GLASS LINES EQUIPMENTS CO. LTD. VS. CIT 253 ITR 454 (GUJ) HELD THAT; IT IS WELL SETTLED CANON OF INTERPRETATION THAT A DOCUMENT HAS TO BE READ AS A WHOLE: IT IS NOT PERMISSIBLE TO ACCEPT APART AND IGNORE THE REST OF THE DOCUMENT. RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS: 1) HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS . SHILPA DYEING PRINTING MILLS (P) LTD, [2013] 39 TAXMANN.COM 3 (GUJARAT) HA S HELD THAT: HIGH COURT OF MADRAS IN THE CASE OF CHENSING VENTUR ES ITR 258 (MAD.). III) HONBLE ITAT, AHMEDABAD BENCH 'B' IN THE CASE OF BHARAT RESINS, LTD. VS. ACIT [2'SINCE, INCOME DECLARED IN SURVEY FALLS UNDER ONE OF THE HEADS OF INCOME, CURRENT YEAR LOSSES CAN BE SET OFF AGAINST SUCH UNDISCLOSED INCOME '. II) HON'BLE 012] 19 TAXMANN.COM 90 (AHD) HAS HELD THAT: HEAD NOTES: SECTION 71, READ WITH SECTIONS 10B AND 70, OF THE I NCOME-TAX ACT, 1961 - LOSSES - INTRA HEADS SET OFF OF - ASSESSMENT YEAR 2 007-08 -WHETHER - WHERE THERE WAS A LOSS IN UNIT ELIGIBLE FOR DEDUCTI ON UNDER SECTION 10B AND THERE WAS A BUSINESS INCOME IN AN ANOTHER UNIT, WHILE COMPUTING TOTAL INCOME, BUSINESS INCOME CAN BE COMPUTED ONL Y AFTER SET OFF OF BUSINESS LOSS AS PER SECTION 70 AND IF AFTER SUCH S ET OFF, STILL THERE IS A ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 8 BUSINESS LOSS, SUCH LOSS CAN BE SET OFF AGAINST OTH ER SOURCES AS PER SECTION 71 - HELD, YES [IN FAVOUR OF ASSESSEE]. VIII) RELIANCE IS ALSO PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KURJI JINABHAI KOTECHA 107 I TR 101 WHEREIN IT WAS HELD THAT 'BY EARNING INCOME FROM ILLEGAL ACTIV ITY THE INCOME DOES NOT GET TAINTED SO FAR AS EXIGIBILIY TO TAX IS CONC ERNED. WHILE COMPUTING INCOME FROM ILLEGAL ACTIVITY IN A PARTICULAR YEAR A LL LOSSES INCURRED IN EARNING THAT PARTICULAR INCOME ARE ALSO TAKEN TO BE INTO ACCOUNT FOR COMPUTATION OF REAL PROFIT. (IX) FURTHER IN THIS REGARD APPELLANT RESPECTFU LLY SUBMITS THAT, IT IS AN ESTABLISHED MATRIX THAT IN THE EVENT OF CONFLICT JU DGMENTS THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT WOULD PREVAIL. IT IS FURTHER ALSO PRECEDENT THAT IN ABSENCE OF ANY JUDGMENT OF JURISDICTIONAL H IGH COURT, THE JUDGMENT BENEFICIAL TO THE ASSESSEE SHALL PREVAIL. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC) WHEREIN IT WAS OBSERVED THAT WHEREVER LAW IS SILENT ON THE ORDER OF THE SET OFF, AN ASSESSEE MAY CONFRONT WITH MORE THAN ONE METHOD FOR SET OFF OF LOSSES. THERE MAY BE SITUATION WHERE A PARTICULAR METHOD, I F ADOPTED, IT MAY BE MORE ADVANTAGEOUS TO THE ASSESSEE THAN ANY OTHER METHOD AND WHERE TWO VIEW OR METHODS ARE POSSIBLE THE VIEW OR METHOD WHICH IS BENEFICIAL TO THE TAX PAYER SHALL BE ADOPTED IN THE ABSENCE OF ANY SPECIFIC PROVISION TO THE CONTRARY. (X) THE ABOVE VIEW HAS FURTHER BEEN SUPPORTED BY CBDT'S CIRCULAR NO. 26 DATED 07.07.1955 AND NO. 721 DATED 13,09.199 5. (XI) UNDER THE CIRCUMSTANCES, THE APPELLANT REL IES ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. SHILPA DY EING PRINTING MILLS (P) LTD, [2013] 39 TAXMANN.COM 3 (GUJARAT) AND HON' BLE ITAT, AHMEDABAD BENCH 'B' IN THE CASE OF BHARAT RESINS LT D, VS. ACIT [2012] 19 TAXMANN.COM 90 (AHD) WHICH ARE BINDING IN NATURE . IN VIEW OF THE FACTS NARRATED ABOVE, THE APPEAL MAY KINDLY BE DECI DED ON MERITS. 3.0 GROUND OF APPEAL RELATED TO DISALLOWANCE O F DEDUCTION U/S 80 OF THE ACT AMOUNTING TO RS. 1,00,000/-. (A) THE AO VIDE PARA 13 OF THE ASSESSMENT ORDER DID NOT ALLOW THE DEDUCTION U/S 80C ON THE GROUND THAT THE APPELLANT DID NOT PROVIDE ANY PROOF THEREOF. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 9 (B) AS SUBMITTED SUPRA APPELLANT DERIVES INCOME FROM SALARY FROM MA A ANANDMAYI KANYA VIDYALAYA. SHE DERIVED GROSS SALARY INCOME OF RS. 4,80,435/-FROM THE SCHOOL. THE SCHOOL AUTHORITY HAV E DEDUCTED GENERAL PROVIDENT FUND (GPF) OF RS.1,23,351/- FROM THE SALARY. THE SALARY CERTIFICATE IS ALREADY ON RECORD. HOWEVER A COPY OF SALARY CERTIFICATE ISSUED BY THE SCHOOL AUTHORITY IS ATTAC HED. IT MAY BE OBSERVED FROM THE SALARY CERTIFICATE THAT A DEDUCTI ON OF RS. 1,23,351/-TOWARDS GPF HAVE BEEN MADE FROM THE SALAR Y PAYMENT. IN VIEW OF THE ABOVE, DISALLOWANCE IS UNJUSTIFIED AND DESERVES TO BE DELETED. (C) FINALLY, THE APPELLANT PRAYS THAT, IF THE ABOVE INCOME IS TREATED AS BELONGING TO THE APPELLANT AND IF MEASURES TO RECOV ER THE TAX THEREON IS IMPOSED, THEN THE APPELLANT WILL HAVE NO ALTERNATIV E BUT TO DISPOSE ALL THAT SHE HAS IN ORDER TO MEET THE TAX OBLIGATIONS. FURTHER, THIS TAX WOULD BE WITHOUT ENJOYING THE INCOME, ON WHICH THE TAX IS BEING SOUGHT. HON'BLE SUPREME COURT HAS HELD THAT, THE 'RIGHT TO LIVE ' SUPERSEDES ALL OTHER RIGHTS AND IT IS THE BASIC CONSTITUTIONAL RIG HT OF A CITIZEN. IT IS SECURED ONLY WHEN A CITIZEN IS ASSURED OF ALL FACIL ITIES TO DEVELOP HERSELF AND IS FREED FROM RESTRICTIONS WHICH INHIBIT HER GR OWTH. ALL HUMAN RIGHTS ARE DESIGNED TO ACHIEVE THIS OBJECT. THE WORD 'LIFE ' IS EMPLOYED BY ARTICLE 21 AND IT TAKES IN ITS SWEEP NOT ONLY THE CONCEPT O F MERE PHYSICAL EXISTENCE BUT ALSO ALL FINER VALUES OF LIFE INCLUDI NG THE RIGHT TO WORK AND RIGHT TO LIVELIHOOD. THIS RIGHT IS A FUNDAMENTAL RI GHT GUARANTEED TO ALL PERSONS RESIDING IN INDIA. THIS RIGHT TO LIFE AS GU ARANTEED BY ARTICLE 21 IS NOT REDUCED TO A MERE PAPER PLATITUDE BUT IS KEPT A LIVE, VIBRANT AND PULSATING SO THAT THE COUNTRY CAN EFFECTIVELY MARCH TOWARDS THE AFFIRMED GOAL OF ESTABLISHMENT OF AN EGALITARIAN SOCIETY AS ENVISAGED BY THE FOUNDING FATHERS WHILE ENACTING THE CONSTITUTION OF INDIA. IF THE TAX FOR WHICH THE APPELLANT HAS NOT EARNED INCOME, IS IMPOS ED, THEN THE APPELLANT WILL NOT JUST LOOSE THE SAVINGS MADE THUS FAR, BUT WILL ALSO LOOSE ALL HER FUTURE INCOME. FURTHER, THE APPELLANT HAS A LREADY REACHED THE AGE OF 56 AND ONLY 2 YEARS OF SERVICE REMAINS. WITH THE APPELLANT'S PRESENT INCOME, THE APPELLANT WOULD HARDLY BE ABLE TO MEET THE TAX OBLIGATIONS. THEREFORE, BY VIRTUE OF THE IMPUGNED ORDER, THE DEP ARTMENT IS SEIZING THE APPELLANT'S RIGHT OF 'RIGHT TO LIVE', THE APPELLANT IS NOT VIOLATING ANY LAW. 8. THE LD. CIT(A) HAS GONE THROUGH THIS EXPLANATION AND WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE TO T HE EXTENT OF RS. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 10 12,14,000/- CREDITED IN HER ACCOUNT THROUGH ACCOUNT PAYEE CHEQUES. HE DIRECTED THE ASSESSING OFFICER TO DELETE THIS AD DITION. HE CONFIRMED THE ADDITION OF RS. 3,00,000/-. HOWEVER HE WAS NOT SATISFIED WITH THE EXPLANATION OF ASSESSEE QUA CASH DEPOSIT OF RS. 15,30,000/-. HE CONFIRMED THE ADDITION. THE FINDING OF THE LD. CIT( A) READ AS UNDER:- 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE ABOVE MENTIONED CONTENTIONS PLACED BY THE AR OF THE APPELLANT. ALTH OUGH I FIND THAT THE ABOVE CONTENTIONS ARE SUPPORTED BY EVIDENCES IN THE FORM OF PAPER CUTTING, COMPLAINTS ETC, HOWEVER, I DECLINE TO ACCEPT THEM DUE TO THE R EASON THAT, ALL THE ABOVE CONTENTIONS ARE FINDING OF FACT AND THE APPELLANT S HOULD HAVE BROUGHT THEM TO THE NOTICE OF THE AO DURING THE COURSE OF ASSESSMEN T. THIS WOULD HAVE ENABLED THE AO TO INQUIRE ABOUT THESE FACTS AND PASS A JUDI CIOUS ORDER BASED UPON THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THIS STAGE, TAKING THE PLEA THAT THE SONS OF THE APPELLANT HAD DEPOSITED THE CASH COLLECTED FROM VARIOUS PERSONS WHILE ENROLLING THEM INTO THE PONZI SCHEME RUN BY DEVEN M ALAVIYA, SHALL NOT HELP THE APPELLANT. THE PLEA OF THE AR THAT DEPOSITS IN BANK ACCOUNT AND SHARE / F&O TRANSACTIONS SHOULD BE TAXED IN THE HANDS OF THE AP PELLANT'S SONS OR IN THE HANDS OF CONCERNED PERSONS AS MENTIONED IN THE COMPLAINT IS NOT ACCEPTABLE. ALTHOUGH THE INCOME TAX ACT MANDATES TAXING THE INCOME IN TH E HANDS OF THE RIGHTFUL OWNER OF INCOME, HOWEVER, AS THE APPELLANT IS THE H OLDER OF THE BANK ACCOUNT WHEREIN THE CASH DEPOSITS WERE MADE, AND IN THE ABSENCE OF ANY CONTRARY EVIDENCE IN THIS REGARD, THE NATURAL PRESUMPTION IS THAT THE SAME BELONGS TO THE APPELLANT. THEREFORE, THE CASH DEPOSITS OF RS.15,30 ,000/- IS TREATED AS INCOME OF THE APPELLANT AND THIS GROUND OF APPEAL IS DISMISSE D. 7. HOWEVER, IN THE INTEREST OF JUSTICE AND IN THE I NTEREST OF REVENUE, THE AO IS DIRECTED TO INITIATE NECESSARY PROCEEDINGS IN TH E CASE OF THE OTHER CO-OWNER OF THE BANK ACCOUNT (VIZ. SHRI ASHISH CHHATRA) SO THAT JUSTICE MAY BE DONE TO THE APPELLANT IF THE SAME IS TREATED AS DEPOSITS OF THE SON OF THE APPELLANT, AND ALSO THERE IS NO LOSS TO THE REVENUE. 8. THE NEXT ISSUE RELATES TO ADDITION OF RS 15,81, 000/- BEING CHEQUE DEPOSITS INTO THE APPELLANT'S BANK ACCOUNT. TO VERI FY THE GENUINENESS OF TRANSACTIONS OF LOANS AS STATED BY THE APPELLANT, T HE SUBMISSION OF THE APPELLANT WAS FORWARDED TO THE AO FOR FURTHER VERIFICATIONS. IN RESPONSE TO THE SAME THE AO VERIFIED THE SAME AND SUBMITTED HIS REPORT CONFI RMING THAT THE TRANSACTIONS OF CHEQUE WERE GENUINE. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 11 8.1 ON GOING THROUGH THE REPORT OF THE OF THE AO I T IS SEEN THAT OUT OF TOTAL DEPOSITS MADE BY CHEQUE, ONE CHEQUE OF RS 2,50,000/ - WAS DEPOSITED FROM THE ACCOUNT OF THE HUSBAND OF THE APPELLANT, WHICH WAS FROM HIS GPF PROCEEDS. NECESSARY EVIDENCES HAVE BEEN PRODUCED BEFORE ME. T HEREFORE, THE DEPOSIT TO THE EXTENT OF RS 2,50,000/- IS ACCEPTABLE AND THE A DDITION MADE IS DIRECTED TO BE DELETED. THEN THERE ARE CHEQUES OF RS.4,00,000/- RE CEIVED FROM BHARAT VACHHANI, RS 2,67,000/- FROM VIKRAM SEJPAL AND RS.2 ,97,000/- RECEIVED FROM VIKRAM SEJPAL. IN SUPPORT OF THE SAME, THE AR HAS P RODUCED COPY OF CONFIRMATION AND BANK ACCOUNT OF THE DEPOSITORS. TH E AO HAS ALSO VERIFIED THE TRANSACTION AND FOUND IN 9RDER. THEREFORE IN IN LIG HT OF THE EVIDENCES, THE SAME ARE ACCEPTED AND THESE THREE ADDITIONS ARE ALSO DIR ECTED TO BE DELETED. THEN THERE IS ONE DEPOSIT OF RS 3,00,000/- AND THE DEPOS ITOR IS UNKNOWN. IN SUPPORT OF THIS, THE AR HAS PRODUCED APPELLANT'S APPLICATION M ADE TO RCC BANK, SEEKING DETAILS OF THE DEPOSITOR. THE APPELLANT ALSO PRODUC ED A COPY OF THE LETTER ISSUED BY RCC BANK TO THE BOB, REQUESTING THEM TO FURNISH THE DETAILS OF THE DEPOSITOR WHO HAD ISSUED THE CHEQUE. HOWEVER, NOTHING MORE IS ON RECORD. SINCE THE DEPOSITOR IS UNKNOWN, I HAVE NO ALTERNATIVE BUT TO TREAT THE SAME AS UNEXPLAINED, WITHIN THE MEANING OF SECTION 68 OF THE I.T. ACT. H ENCE, OUT OF THE ADDITION OF RS 15,81,000/-, ADDITIONS TO THE TUNE OF RS. 12,14,000 /- IS DIRECTED TO BE DELETED AND THE REMAINING ADDITIONS OF RS 3,00,000/- GETS SUSTA INED. THEREFORE, THIS GROUND IS PARTLY ALLOWED. 9. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERATE D HIS SUBMISSION AS WERE RAISED BEFORE THE LD. CIT(A). HE CONTENDED THAT LD. FIRST APPELLATE AUTHORITY IN PRINCIPAL AGREED WITH THE CO NTENTION OF THE ASSESSEE THAT AN ENQUIRY IN THE HANDS OF CO-OWNER I S REQUIRED TO BE MADE AND THEREFORE IN PARAGRAPH NO. 7 OF THE IMPUGN ED ORDER. LD. FIRST APPELLATE AUTHORITY HAS GIVEN SPECIFIC DIRECT ION TO THE ASSESSING OFFICER SO THAT JUSTICE MAY BE DONE TO THE ASSESSEE AS WELL AS INTEREST OF THE REVENUE COULD BE SAFEGUARDED. 10. ON THE OTHER HAND LD. D.R RELIED UPON THE ORDER OF ASSESSING OFFICER. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 12 11. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AN D GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS POINTED OUT THAT SHE IS A SALARIED EMPLOYEE WORKING AS A TEACHER IN MAA ANAND MAYI KANYA VIDYALAYA RAJKOT. HER HUSBAND IS A RETIRED EMPLOYEE OF GUJARA T GOVERNMENT (POLICE DEPARTMENT). THUS BOTH THE HUSBA ND AND WIFE WERE NOT HAVING ANY OTHER INDEPENDENT SOURCE OF INC OME. IT WAS POINTED OUT TO THE ASSESSING OFFICER AS WELL AS TO THE LD. CIT(A) THAT WITHOUT HER KNOWLEDGE, HER SON HAS CARRIED OUT THES E ACTIVITIES AFTER OPENING A JOINT ACCOUNT. THE LD. CIT(A) ON AN ANALY SIS OF THE SUBMISSION OF THE ASSESSEE AGREED TO THE EXTENT THA T THESE TRANSACTIONS IN THIS BANK ACCOUNT WERE CARRIED OUT BY HER SON. THE CASE OF THE ASSESSEE WAS THAT HER SON HAD DEPOSITED THE CASH COLLECTED FROM VARIOUS PERSONS WHILE ENROLLING THEM INTO THE PONZI SCHEME RUN BY DEVEN MALAVIYA. CRIMINAL CASE OF FRAU D ETC WERE REGISTERED AGAINST SHRI DEVEN MALAVIYA AND HE WAS D ECLARED AS A PROCLAIMED OFFENDER. THE NEWS ITEM PUBLISHED IN THE NEWSPAPER WERE PLACED ON THE RECORD. SHE HAS SHUNTED OUT HER SON F ROM THE RESIDENCE BECAUSE, DAILY THERE WERE DISPUTE FROM THE PUBLIC F ROM WHOM HER SON HAS COLLECTED THE MONEY. IN THIS SITUATION HER PLEA IS THAT CASH DEPOSIT IN THIS ACCOUNT CANNOT BE ASSESSED IN THE H ANDS OF ASSESSEE RATHER IT SHOULD BE INVESTIGATED IN THE HANDS OF HE R SON SHRI ASHISH CHHATRRA AS OBSERVED BY THE LD. CIT(A) IN PARAGRAPH NUMBER 7. 12. APART FROM THE ABOVE THE ASSESSEE HAS POINTED O UT THAT LD. ASSESSING OFFICER HAS CONDUCTED THE ENQUIRY FROM SH ARE TRADING BUSINESS CARRIED OUT BY HER SON THROUGH M/S ANUGRAH STOCK AND BROKING PVT. LTD IN PARAGRAPH NUMBER 10. LD. ASSESSING OFFICER HAS CALCULATED THE LOSS SUFFERED IN SHARE TRANSACTIONS THROUGH THIS BROKER AT RS. 22,22,940/-. THUS EVEN IF THE ADDITION IS BE ING CONFIRMED IN ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 13 HER HAND THEN IT IS TO BE SET OFF AGAINST THIS LOSS . ON DUE CONSIDERATION OF THE ABOVE, WE ARE OF THE VIEW THAT ASSESSING OFFICER HAS NOT CONDUCTED THE PROPER ENQUIRY FOR ASCERTAINI NG THE DETAILS OF DEPOSITOR. THE LD. ASSESSING OFFICER COULD CALL FOR DEPOSIT APPLICATION FORM FROM THE BANK. HE COULD VERIFY THEM ON TEST CH EQUE BASIS THAT WOULD HAVE DISCLOSED, WHETHER ASSESSEE HAS DEPOSITE D THE AMOUNT IN THE BANK ACCOUNT OR HER SON. EVEN IF SOME STRANGER HAS DEPOSITED, THEN, IT COULD BE LOCATED ON WHOSE BEHALF, HE HAS D EPOSITED. AFTER ASCERTAINING THIS DETAIL, LD. ASSESSING OFFICER SHO ULD HAVE CONFRONTED EITHER THE ASSESSEE OR HER SON, BUT HE ASSUMED CERT AIN THINGS AGAINST THE ASSESSEE AND PROCEED TO MAKE THE ADDITION. IT I S ALSO PERTINENT TO OBSERVE THAT IF TRANSACTIONS ARE ASSUMED TO BE RELA TED TO THE ASSESSEE THEN WHY LOSSES OF RS. 22.22 LAKH SUFFERED BY THE ASSESSEE COULD NOT BE SET OFF. NO FINDING HAS BEEN RECORDED EITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(A). IN THIS SIT UATION WE DEEMED IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT LD. ASSESSING OFFICER SHALL FIRS T ASCERTAIN THE DETAILS OF DEPOSITS MADE WITH BANK ON THE BASIS OF DEPOSITS APPLICATION FORM, THEREAFTER HE WOULD DECIDE WHETHER ACTION IN THE HA NDS OF ASSESSEE IS TO BE TAKEN OR NOT. IN CASE IT EMERGES OUT THAT DEP OSITS WERE MADE BY THE ASSESSEE THEN AS TO WHY LOSSES IN THE SHARE BUSINESS IS TO BE SET OF AGAINST THIS INCOME OR NOT. THIS ISSUE IS TO BE DECIDED IN ACCORDANCE WITH THE LAW BY RECORDING SPECIFIC FINDI NG. 13. WITH THE ABOVE DIRECTIONS APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSE. BOTH THE ADDITIONS I.E. ADDITI ON OF RS. 15,13,000/- AND RS. 3,00,000/- MADE WITH THE AID SECTION 68 ARE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION. LD. ASSESSING OFFICER SHALL CARRIED OUT THIS EXERCISE AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 14 NOW WE TAKE ITA NO. 25/RJT/2016 14. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. C IT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1,00,000/-. THE BR IEF FACTS OF THE CASE ARE THAT ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE SHOULD HAVE AUDITED HER BOOKS OF ACCOUNT U/S. 44AB OF THE ACT SINCE SHE FAIL TO GET HER ACCOUNT AUDITED THEREFORE, HE I NITIATED PENALTY PROCEEDINGS U/S. 271B OF THE INCOME TAX ACT. THE LD . ASSESSING OFFICER HAS OBSERVED THAT SHARE TRANSACTIONS WERE C ARRIED OUT THROUGH ANUGRAH STOCK AND BROKING PVT. LTD. BY USING THE BA NK ACCOUNT OF THE ASSESSEE. HENCE SHE WAS REQUIRED TO GET HER ACCOUNT AUDITED BECAUSE TURNOVER IN THESE TRANSACTIONS WAS MORE THAN RS. 16 .96 CRORES. THE STAND OF THE ASSESSEE IS THAT SHE IS A SALARIED EMP LOYEE. SHE HAS FILED HER RETURN UNDER THE CATEGORY OF SALARIED EMPLOYEE, WHATEVER TRANSACTIONS ATTRIBUTED TO HER ARE CONCERNED, THESE ARE RELATED TO HER SON WHO HAS ALONE USED JOINT ACCOUNT WITH THE BANK. SHE CAME TO KNOW ONLY WHEN ASSESSING OFFICER HAS POINTED OUT TH E SHORT COMINGS AND SOUGHT THE EXPLANATION OF ASSESSEE ABOUT THE CA SH DEPOSITS IN THE BANK. THE LD. ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND IMPOSED THE PENALTY OF RS.1,00,000 /-. 15. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF T O THE ASSESSEE. 16. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE HAVE TAKEN COGNIZA NCE OF ASSESSEE SUBMISSIONS GIVEN IN THE QUANTUM APPEAL. SHE HAS SU BMITTED THAT SHE IS A SCHOOL TEACHER DOES NOT INDULGE ANY SHARE TRADING. AFTER EXAMINING THE CONDUCT OF ASSESSEE, IT COULD EASILY BE ASCERTAINED, THAT A PERSON WITH THIS BACKGROUND COULD NOT BE IND ULGED IN DAY TO DAY SHARE TRADING BUSINESS OF RS. 16.96 CRORES. TH EREFORE LD. ITA NO.47/RJT/2015 & 25/RJT/2016 A.Y. 2009-10 15 REVENUE AUTHORITY OUGHT TO HAVE VISUALIZED HER EXPL ANATION IN LIGHT OF HER BACKGROUND AND A MECHANICAL APPROACH OUGHT NOT TO HAVE BEEN ADOPTED. THE LD. ASSESSING OFFICER FAILED TO BRING CONCLUSIVE EVIDENCE PROVING ASSESSEES EXPLANATION AS FALSE. THEREFORE, HE WAS NOT REQUIRED TO GET HER ACCOUNT AUDITED AND NO PENALTY DESERVES TO BE IMPOSED UPON HER. WE ALLOW THIS APPEAL OF THE ASSES SEE AND DELETE THE PENALTY. 17. IN THE RESULT ITA NO. 47/RJT/2015 IS PARTLY ALL OWED WHEREAS ITA NO. 25/RJT/2016 IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 17/04/2018. SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 17/04/2018 ! '! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. # / THE RESPONDENT. 3. $%$&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A) 5. !)* &' , &' / DR, ITAT, 6. *+, - / GUARD FILE. / BY ORDER, . / / $0 (DY./ASSTT.REGISTRAR) &' , /1% / ITAT, AHMEDABAD