Smt. Brij M.Sharma, Bharuch V. The Income tax Officer,Ward-1-TDS, Bharuch

ITA 2514/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9658 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 27-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 07-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: TALATI
• Keywords: Capital asset; Depreciation; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence
• Section: 143(3); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER DATE OF HEARING : 27/09/2010 DRAFTED ON: 4 /10/2010 ITA NO.2514/AHD/2008 ASSESSMENT YEAR : 2003-04 SMT. BRIJ M. SHARMA PROP.SUNRISE EXPORTS C/65/4, GIDC BHARUCH VS. THE INCOME TAX OFFICER TDS WARD-1 BHARUCH PAN/GIR NO. : AHLPS 6348 B ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.H. TALATI RESPONDENT BY: SHRI K.M. MAHESH, SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VI, BARODA DATED 07/05/2008 PASSED FOR ASSESSMENT YEAR 2003-04. 2. GROUND NO.1 READS AS UNDER: 1. THE ORDER PASSED BY THE HON'BLE COMMISSIONER O F INCOME TAX (APPEALS) IS BAD IN LAW, CONTRARY TO LEGAL PRONOUNC EMENTS AND SAME BE QUASHED. THE ADDITIONS/DISALLOWANCES CONFIRMED BY HIM ARE UNWARRANTED AND SAME BE DELETED NOW. 2.1. GROUND NO.1 IS GENERAL IN NATURE NEEDS NO INDE PENDENT ADJUDICATION. THEREFORE, THE SAME IS DISMISSED. ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 2 - 3. GROUND NO.2 READS AS UNDER: 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING ADDITION OF RS.2,16,200 INVOKING PROV ISIONS OF SECTION 68 OF THE ACT. YOUR APPELLANT SUBMITS THAT ADDITION MADE IS UNJUST AND UNCALLED FOR AND SAME BE DELETED NOW. 3.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.144 R.W.S. 143(3) OF THE I.T. ACT, 1961 DATED 28/02/2006 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY WAS IN THE BUSINESS OF PROCESSING OF YARN AND JOB-WORK. 3.2. IT WAS NOTED BY THE ASSESSING OFFICER THAT UNSECURED LOANS WERE REFLECTED IN THE BALANCE-SHEET OF THE ASSESSEE. CO NSEQUENTLY, THE ASSESSEE WAS ASKED TO ESTABLISH THE IDENTITY, CREDITWORTHINESS, ETC. AS PRESCRIBED U/S.68 OF THE I.T.ACT. CONFIRMATION LETTERS HAVE BEEN F ILED WHICH WERE PERUSED BY THE ASSESSING OFFICER. IT WAS ALSO NO TED BY THE ASSESSING OFFICER THAT THE CASH CREDITORS WERE NOT ASSESSED TO TAX. THERE WAS NO MENTION OF THE SOURCE OF PAYMENT AS WELL AS THE MODE OF PAYMENT . A LIST OF SAID 12 CASH CREDITORS WAS REPRODUCED BY TH E ASSESSING OFFICER. IT IS WORTH TO MENTION, AS ALSO NOTED BY THE ASSESS ING OFFICER, THAT THE AMOUNTS WERE JUST BELOW RS.20,000/- AND THE LOANS W ERE ALLEGED TO HAVE BEEN RECEIVED AMOUNTING IN THE RANGE OF RS.19,500/- TO RS.19,900/- ETC. IN THE ABSENCE OF RELEVANT INFORMATION AND SATISFAC TORY REPLY FROM THE SIDE OF THE ASSESSEE, THE ENTIRE AMOUNT OF RS.2,36, 100/- WAS TAXED IN THE HANDS OF THE ASSESSEE BY INVOKING SECTION 68 OF THE I.T.ACT. ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 3 - 3.3. WHEN THE MATTER REACHED BEFORE THE FIRST AP PELLATE AUTHORITY, A REMAND REPORT WAS CALLED FOR AND AFTER CONSIDERING THE SAID REPORT, OUT OF THE SAID 12 DEPOSITORS, THE LEARNED CIT(APPEALS) HAS NOTICED THAT ONE OF THEM; NAMELY, MR.RAMAKANT SHARMA, STATED TO BE W ORKING IN A FOREST DEPARTMENT, HAS DEPOSITED A SUM OF RS.19,900/-WHICH WAS ALLOWED , HOWEVER, THE BALANCE AMOUNT OF RS.2,16,200/- WAS C ONFIRMED. 4. AFTER HEARING BOTH THE SIDES AND ON PERUSAL OF T HE EVIDENCES FILED BEFORE US, WE HAVE ALSO NOTED THAT THOUGH THE CONFI RMATIONS WERE FILED BUT THOSE HAVE NOT SATISFACTORILY EXPLAINED THE CREDITWORTHINESS OF THE CASH DEPOSITORS. WE HAVE ALSO ASKED THE LEARNED AUT HORISED REPRESENTATIVE THAT WHETHER ANY OF THEM IS ASSESSED TO TAX AND IN COMPLIANCE HE HAS CLARIFIED THAT THOUGH, IN TWO CAS ES, THE PROOF OF FILING OF INCOME TAX RETURN WAS FILED, BUT THAT RETURN WAS OF SUBSEQUENT ASSESSMENT YEAR, NOT RELATED TO THE ASSESSMENT YEAR UNDER CONSIDERATION. NOW THE LAW IS VERY WELL SETTLED THAT THE ASSESSEE HAS TO DISCHARGE THE PRIMARY ONUS OF ESTABLISHING THE IDENTITY, GENUINEN ESS AND CREDITWORTHINESS OF THE CASH CREDITORS . THEREFORE, THE PRIMARY BURDEN WAS ON THE ASSESSEE TO ESTABLISH THE SOURCE OF MON EY RECEIVED BY HER. IT IS NOT THE CASE THAT ASSESSEES EXPLANATION WAS REJ ECTED ARBITRARILY BY THE REVENUE AUTHORITIES, RATHER APPARENTLY THE ASSESSEE WAS GIVEN A FAIR OPPORTUNITY TO EXPLAIN THE CREDITWORTHINESS OF THOS E TWELVE (12) CASH CREDITORS. BUT IN THE ABSENCE OF ANY SATISFACTORY R EPLY OR COGENT EVIDENCES FORM THE SIDE OF THE ASSESSEE THE A.O. WAS LEFT WIT H NO OPTION BUT TO ASSESS THE IMPUGNED DEPOSITS AS DEEMED INCOME IN TH E HANDS OF THE ASSESSEE. BE THAT AS IT WAS BEFORE THE A.O., WHEN T HE MATTER HAD GONE IN FIRST APPEAL THE APPELLANT HAD PRODUCED SOME OF THE CREDITORS IN THE ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 4 - REMAND PROCEEDINGS LISTED AS BELOW - (PAPER BOOK PA GES 89 TO 94); EXTRACTED FROM PAGE NOS.91 & 92:- EVEN IN THE CASE OF THE FOLLOWING PARTIES WHO WERE PRODUCED BEFORE ME AND THEIR STATEMENT WERE TAKEN ON OATH, THE FOLLOWI NG FACTS HAVE EMERGED:- 1. SHRI. AJITSINGH RAJAWAT :- IN HIS STATEMENT HE HAS STATED AS UNDER:- HE IS AGED 22 YEARS AND STUDIED UPTO TO 8 TH STANDARD AND IS WORKING IN GARAGE. HIS MONTHLY INCOME IS RS.3000/- P.M. HE HAS STATED THAT HE HAS ADVANCED INTEREST FREE LOAN OF RS.19,800/- BY W AY OF CASH FROM HIS SAVINGS. HE HAS NO BANK ACCOUNT. HE IS NOT ASSES SED TO TAX. DURING THE EXAMINATION OF THIS PERSON HE HAS NOT GIVEN ANY PROOF OF THE SOURCE OF HIS INCOME. THEREFORE, THE GENUINENESS AND CRED ITWORTHINESS OF THE TRANSACTION IS NOT ESTABLISHED. 2. SHRI. RAMAKANT MISTRY :- IN HIS STATEMENT HE HAS STATED AS UNDER:- HE IS AGED 41 YEARS AND SERVING IN FOREST DEPARTMEN T AT ALWAR AS A RANGER. HIS ANNUAL INCOME IS RS.1,30,000/-. HE HA S STATED THAT HE HAS ADVANCED INTEREST FREE LOAN OF RS.19,900/- BY WAY O F CASH FROM HIS PERSONAL SAVINGS KEPT IN HOUSE. HE HAS NOT SUBMIT TED HIS COPY OF BANK PASS BOOK. HE HAS ALSO MENTIONED THAT HE IS FILLIN G HIS RETURN OF INCOME FOR THE PAST TWO YEARS ONLY. HE HAS ALSO NOT SUBM ITTED THE PROOF/COPY OF THE RETURN OF INCOME AS WELL AS THE SALARY CERTI FICATE. AS HE WAS NOT ABLE TO PROVE THE GENUINENESS OF THE TRANSACTION, T HE SAME IS NOT ACCEPTED. 3. SMT. BABITA SINGH :- IN HER STATEMENT SHE HAS STATED AS UNDER:-SHE IS AGED 28 YEARS AND STUDIED UPTO TO 12 TH STANDARD. SHE IS WORKING IN AAGANWADI AND HER MONTHLY INCOME IS RS.1500/-. SH E DOES NOT HAVE ANY BANK ACCOUNT. SHE HAS STATED THAT SHE HAS ADV ANCED INTEREST FREE LOAN OF RS.19,500/- BY WAY OF CASH OUT OF HER PERSO NAL SAVINGS, WHICH CANNOT BE ACCEPTED LOOKING TO HER MEAGER INCOME. SHE IS NOT ASSESSED TO TAX. THE GENUINENESS AND CREDITWORTHINESS OF T HE TRANSACTION IS NOT ESTABLISHED. 4. SMT. KUSUM SHARMA :- IN HER STATEMENT SHE HAS STATED AS UNDER:- ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 5 - SHE IS AGED 42 YEARS AND IS HOUSE WIFE STUDIED UPTO 11 TH STANDARD. SHE IS HAVING RENTAL INCOME OF RS.4,000/- PER MONTH. SHE IS HAVING BANK ACCOUNT BUT HAS NOT PRODUCED COPY OF THE SAME. EVE N THE PROOF REGARDING THE RENTAL INCOME HAS NOT BEEN SUBMITTED. SHE HAS ADVANCED INTEREST FREE LOAN OF RS.19,000/- BY WAY OF CASH AN D STATED THAT THE AMOUNT IS FROM HER SAVINGS. SHE IS NOT ASSESSED TO TAX. THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION S NOT ESTABLISHED. 5. SMT. SUMAN SHARMA :- IN HER STATEMENT SHE HAS STATED AS UNDER:- SHE IS AGED 37 YEARS STUDIED UPTO 12 TH STANDARD. SHE IS SERVING IN A PRIVATE COMPANY AND HERE EARNING RS.6,000/- PER MON TH. SHE HAS BANK ACCOUNT BUT HAS NOT PRODUCED COPY OF THE SAME. SHE HAS STATED THAT SHE HAS ADVANCED INTEREST FREE LOAN OF RS.19,900/- BY W AY OF CASH FROM HER PERSONAL SAVINGS. SHE IS NOT ASSESSED TO TAX. THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION IS NOT ESTABLIS HED. 4.1. CONSIDERING THE TOTALITY OF THE FACTUAL MAT RIX MAXIMUM WE CAN HOLD THAT SINCE ABOVE REFERRED FIVE PARTIES HAVE BEEN PRODUCED AND EXAMINED THEREFORE THE IDENTITY OF THE M CAN BE SAID TO HAVE BEEN ESTABLISHED. NEXT IS WHETHER THEY HAD THE CAPA CITY TO ADVANCE THE LOAN RANGING FROM 19,000/- TO 19,900/-. ON PERUSAL OF THEIR STATEMENTS AND THE REMARKS OF THE A.O. IT IS EVIDENT THAT THES E (5) PERSONS WERE EMPLOYED WITH SOME PETTY JOB OR THE OTHER. THE PRES UMPTION CAN GO BOTH WAYS THAT THE POSSIBILITY COULD BE THAT IN DISTRESS THE APPELLANT MIGHT HAVE TAKEN PETTY LOANS. APPLYING THE RULE OF PREPONDERAN CE OF PROBABILITIES IT CAN NOT BE ALTOGETHER RULED OUT THE POSSIBILITY THA T TO OVER COME THE DIFFICULTY SURFACED DUE TO FIRE, WITNESSED BY AN FI R ( PGS. 8 TO 22 OF P.B.) THE ASSESSEE HAD OPTED TO TAKE PETTY LOANS SO AS TO AVOID SOME OF THE LEGAL FORMALITIES OF THE PROVISIONS OF IT ACT. THEREFORE TO THE EXTENT THE LOAN OF THESE FIVE PERSONS WHO WERE UNDISPUTEDLY PRESENT AN D ADMITTED THE LOAN TRANSACTION; WITH THE EXPLANATION OF THEIR RESPECTI VE EARNINGS THE FIRST APPELLATE AUTHORITY COULD HAVE ACCEPTED THE SAME. BUT THE ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 6 - CIT(APPEALS) HAS ACCEPTED ONLY ONE LOAN OF MR.RAMA KANT MISTRY OUT OF THE SAID FIVE PERSONS. INDEED THEIR CAPACITY APPEAR ED TO BE MEAGER BUT IN SUCH A DISTRESS SITUATION OF THE ASSESSEE, THE POSS IBILITY OF EXTENDING HELP COULD ALSO NOT BE RULED OUT. WE, THEREFORE, HOLD TH AT CONSIDERING THE PECULIARITY OF THE CIRCUMSTANCES AND THE CORROBORAT ING FACTS OF THE CASE THE ASSESSEE IS ENTITLED FOR A FURTHER PART RELIEF OF THE LOAN AMOUNTS OF REST OF THE FOUR PERSONS ONLY. REST OF THE ADDITION I S HEREBY CONFIRMED BECAUSE NEITHER THEY WERE PRODUCED NOR THEIR EXPLAN ATION OF ADVANCING LOAN WAS SATISFACTORY. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 5. GROUND NO.3 READS AS UNDER: 3. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.2,90,906 BEING LOS S TO BUILDING DUE TO EARTHQUAKE AND SHORT RECEIPT OF INSURANCE CL AIM. YOUR APPELLANT SUBMITS THAT DISALLOWANCE MADE IS UNJUST AND UNCALLED FOR AND SAME BE DELETED NOW. 5.1. ON EXAMINATION OF THE PROFIT & LOSS ACCOUNT , IT WAS NOTED BY THE ASSESSING OFFICER THAT AN AMOUNT OF RS.2,90,906 /- WAS DEBITED TO PROFIT & LOSS ACCOUNT UNDER THE HEAD LOSS ON INSURANCE CLAIM (BUILDING) IN SUPPORT OF THE SAID CLAIM, CERTAIN EVIDENCES HAVE BEEN FURNISHED. THE EXPLANATION OF THE ASSESSEE WAS TH AT DUE TO EARTHQUAKE, THE BUILDING WAS DAMAGED, THEREFORE, THE ASSESSEE H AD MADE AN INSURANCE CLAIM. AGAINST THE CLAIM MADE, THE ASSESSEE HAS R ECEIVED LESSER AMOUNT WHICH WAS WRITTEN OFF DURING THE YEAR UNDER CONSIDE RATION. THE ASSESSING OFFICER HAS DISALLOWED THE SAME ON THE GROUND THAT THE EXPENDITURE WAS IN RESPECT OF BUILDING, THEREFORE, CAPITAL IN NATURE AND NOT REVENUE ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 7 - EXPENDITURE . RESULTANTLY, THE SAID SUM OF RS.2,90,906/- WAS TAXED IN THE HANDS OF THE ASSESSEE. 5.2. THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY. BEFORE THE LEARNED CIT(APPEALS), IT WAS EXPLAINED T HAT AN INSURANCE CLAIM OF RS.3,87,550/- WAS FILED TO NATIONAL INSURA NCE CO.LTD., HOWEVER, ONLY A SUM OF RS.96,644/- WAS RECEIVED AS A FULL AN D FINAL SETTLEMENT. THE LEARNED CIT(APPEALS) HAS AFFIRMED THE ACTION OF THE ASSESSING OFFICER WITH THE REASONING THAT THE LOSS WAS RELATE D TO A CAPITAL ASSET, I.E. BUILDING, THEREFORE, THE LOSS WAS NOTHING BUT A CAP ITAL LOSS. 6. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED TH E RELEVANT MATERIAL PLACED IN THE COMPILATION. FROM THE DETA ILS FURNISHED, WE HAVE NOTED THAT THE ASSESSEE HAD MADE THE INSURANCE CLAI M OF RS.3,87,550/- AND THE BIFURCATION OF INSURANCE CLAIM, AS EMERGED FROM PAGE NO.96 OF THE COMPILATION, IS THAT A SUM OF RS.2,51,550/- REP RESENTED THE LOSS OF BUILDING AND A SUM OF RS.1,36,000/- REPRESENTED THE LOSS TOWARDS PLANT AND MACHINERY. AN IMPORTANT FACT HAS BEEN BROUGHT TO OUR NOTICE THAT, WHILE DECLARING THE INCOME FOR THE PERIOD COMMENCIN G 31/03/2002 I.E. ASSESSMENT YEAR 2002-03, THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE SAID SUM OF RS.3,87,550/- WAS CREDITED IN THE P ROFIT & LOSS ACCOUNT ON THE GROUND THAT THE ASSESSEE HAD MADE THE CLAIM BEFORE THE INSURANCE COMPANY, SO FOLLOWING MERCANTILE SYSTEM OF ACCOUN TING THE SAID AMOUNT WAS SUBJECT TO TAX IN THAT YEAR. ONE MORE FACT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT IN THAT VERY ASSESSMENT YEAR UNDER THE HEAD REPAIRS AND MAINTENANCE , THE ASSESSEE HAS DEBITED A SUM OF ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 8 - RS.2,51,550/- FOR BUILDING AND OF RS.1,36,000/- FOR PLANT AND MACHINERY. THE LEARNED AUTHORISED REPRESENTATIVE HAS ALSO STAT ED THAT THE REPAIRS AND MAINTENANCE EXPENDITURE TOWARDS BUILDING AND PLANT HAVE DULY BEEN ALLOWED BY THE ASSESSING OFFICER. IN THE NEX T ASSESSMENT YEAR, WHEN THE INSURANCE CLAIM WAS SETTLED, IT WAS FOUND THAT ONLY RS.96,644/- WAS ALLOWED BY THE NATIONAL INSURANCE CO.LTD. AS PE R EVIDENCE PLACED ON PAGE NO.57 OF THE COMPILATION. DUE TO THE SAID REA SON, THE BALANCE AMOUNT (RS.3,87,550 RS.96,644) WAS DEBITED TO PRO FIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. THE SHORT ISSUE IS THAT ONCE IN THE PAST ON MERCANTILE BASIS, THE ENTIRE AMOUNT OF CL AIM WAS CREDITED IN THE PROFIT & LOSS ACCOUNT, BUT THAT AMOUNT WAS NOT PAID BY THE INSURANCE COMPANY AND A LESSER AMOUNT WAS PAID, THE REFORE, THE BALANCE AMOUNT WHICH WAS WRONGLY TAXED IN THE PAST HAS TO B E ADJUSTED BY REVERSING THE ACCOUNT BY THE SAID AMOUNT. THIS IS WHAT EXACTLY HAD BEEN DONE BY THE ASSESSEE. WE FIND NO MISTAKE OR FALLA CY ON THE PART OF THE ASSESSEE. IT WAS SIMPLY A QUESTION OF CORRECT ACCOU NTING AND THE SAME IS HEREBY APPROVED BY US. THE VIEW TAKEN BY THE AUTHO RITIES BELOW IS HEREBY REVERSED AND THIS GROUND IS, THEREFORE, ALLO WED. 7. GROUND NO.4 READS AS UNDER: 4. THE HON'BLE COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN CONFIRMING ADDITION OF RS.4,67,415 INVOKIN G PROVISIONS OF SECTION 69 OF THE I.T.ACT. YOUR APPELLANT SUBMITS THAT ADDITION MADE IS UNJUST AND UNCALLED FOR AND SAME BE DELETED NOW. 7.1. WHILE PERUSING THE STATEMENT OF PUNJAB NATIONA L BANK, IT WAS NOTED BY THE ASSESSING OFFICER THAT CERTAIN CASH WE RE DEPOSITED ON DIFFERENT DATES TOTALLING TO RS.5,63,415/-. IN THE ABSENCE OF PROPER ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 9 - EXPLANATION, THE SAID AMOUNT WAS TAXED AS UNEXPLAIN ED INVESTMENT BY INVOKING THE PROVISIONS OF SECTION 69 OF THE I.T.AC T. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHO H AS GIVEN PART RELIEF VIDE PARAGRAPH NOS.7.3 TO 7.3.3; REPRODUCED BELOW:- 7.3. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IN REGARD TO THE DEPOSIT OF RS.1,60,000/- AND RS.96,000/- IT WAS CLAIMED THAT THE AMOUNTS WERE RECEIVED FROM CHEQUE DISCOUNTING W ITH SHROFF PUNAMCHAND AND THE REST THREE FIGURES RELATE TO CAS H SALE OF GREY IN THE MARKET WHICH WERE INCLUDED IN THE SALE OF TH E YEAR. HOWEVER, IN THE ABSENCE OF ANY DOCUMENTARY PROOF TH E ASSERTION THAT THE CASH SALES WERE RECORDED IN THE BOOKS OF A CCOUNT IS NOT PROVED. 7.3.1. IN REGARD TO CASH DISCOUNTING TRANSACTIONS, IN THE REMAND PROCEEDINGS THE APPELLANT WAS ASKED TO FURNISH THE DETAILS OF CHEQUE DISCOUNTING WITH POONAMCHAND DEVCHAND. IT WAS STATED BY THE APPELLANT THAT RS.3 LAKHS COMPRISING OF RS.9 6,000 AND RS.2,04,000/- WERE RAISED FROM SHRI POONAMCHAND DEV CHAND ON 31.12.2002. IT IS ALSO ARGUED THAT RS.3 LAKH WAS R ETURNED TO THE SHROFF ON 26.1.2003 AS EVIDENCE BY THE BANK STATEME NT OF DEVSHREE SYNTEX PVT.LTD. 7.3.2. HAVING GONE THROUGH THE SUBMISSIONS AS WELL AS THE DOCUMENTS AND THE REMAND REPORT, I AM OF THE VIEW T HAT THERE IS EVIDENCE OF RECEIPT OF RS.96,000 FROM THE SHROFF PO ONAMCHAND DEVCHAND. HOWEVER IN RESPECT OF THE OTHER AMOUNT O F RS.2,04,000/- THE EVIDENCE IS NOT CONCLUSIVE. UND ER THE CIRCUMSTANCES, THE ADDITION TO THE EXTENT OF RS.4,6 7,415/- (RS.5,63,415 RS.96,000) IS CONFIRMED. 7.3.3. GROUND 4 IS PARTLY ALLOWED. 8. NOW, THE ASSESSEE IS FURTHER IN APPEAL AND VEHEM ENTLY CONTESTED THAT THE RELEVANT EVIDENCES IN SUPPORT OF THE SOURC E OF INVESTMENT COULD NOT BE FURNISHED DUE TO CERTAIN CIRCUMSTANCES, HOWE VER, EVIDENCES BEING ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 10 - ROOT OF THE MATTER HAS TO BE CONSIDERED AT THE APPE LLATE STAGE. THE DETAILS AND THE EXPLANATION AS FILED BEFORE US IS AS FOLLOW S:- DETAILS OF AMOUNTS DEPOSITED IN BANK FINANCIAL Y EAR 2002-03 RS.1,60,000/- ON 24.10.2002 DEPOSITED IN OUR BANK BY DISCOUNTING A CHEQUE FROM SHROFF I.E. PUNAMCHAND DEVCHAND AND THE SAME AMOUNT HAS BEEN PAID BACK TO PUNAMCHAND DEVCHAND BY CASH ON 25.10.2002, AND THIS CASH AMOUNT WAS RECEIVED IN CASH FROM OUR AGENT FROM BOMBAY. THE CASH WAS TRANSFERRED TO US THROUGH ANGADIA RECEIPT ENCLOSED. RS.1,35,700/- ON 09.10.2002 DEPSOITED IN OUR BANK THE AMOUNT WAS RECE3IVED OUT OF SALE PROCEEDS OF GREY FABRIC THOUGH OUR AGENT AT BOMBAY. THE CASH WAS TRANSFERRED TO US THOUGH ANGADIA RECEIPT ENCLOSED. RS.1,41,715/- ON 24.120.2002 DEPOSITED IN BANK AMOUNT OUT OF SALE PROCEEDS OF GREY FABRIC THROUGH OUR AGENT AT BOMBAY. THE CASH WAS TRANSFERRED TO US THROUGH ANGADIA RECEIPT ENCLOSED. RS.30,000/- ON 17.03.2003 DEPOSITED IN OUR BANK. THE AMOUNT WAS RECEIVED OUT OF SALE PROCEEDS OF GREY FABRIC AT LOCAL HAT BAZAR IN BHARUCH. IN HAT BAZAR (I.E. ATHAWADIA BAZAR) THE SALE IS ALWAYS IN CASH ONLY. 8.1. NOW THE FUNDAMENTAL QUESTION IS THAT, IF WE AR E ACCEPTING THESE ADDITIONAL EVIDENCES, THEN THE NATURAL JUSTICE DEMA NDS TO GIVE A REASONABLE OPPORTUNITY OF HEARING TO THE REVENUE DE PARTMENT AS WELL. ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 11 - WE HAVE ASKED BOTH THE SIDES THAT IF THESE ADDITION AL EVIDENCES ARE HEREBY ACCEPTED, THEN THE CONSEQUENCES SHALL BE THA T THE GROUND IN QUESTION HAS TO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION. BOTH THE PARTIES HAVE CONSENTED FO R THE SAME, THEREFORE, CONSENT BEING BESTOWED , WE HEREBY REST ORE THIS GROUND BACK TO THE STAGE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH AS PER LAW. AS A RESULT, THIS GROUND MAY BE TREATED AS ALLOWED FO R STATISTICAL PURPOSES. 9. GROUND NOS.5 & 6 READ AS UNDER:- 5. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING ADHOC DISALLOWANCE OF RS.20,000 OUT O F EXPENSES. YOUR APPELLANT SUBMITS THAT DISALLOWANCE MADE IS UN JUST AND UNCALLED FOR AND SAME BE DELETED NOW. 6. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.3,616 OUT OF VEHIC LE DEPRECIATION. YOUR APPELLANT SUBMITS THAT DISALLOWANCE MADE IS UN JUST AND UNCALLED FOR AND SAME BE DELETED NOW. 9.1. ADHOC DISALLOWANCES IN RESPECT OF CERTAIN EXPE NSES AND DEPRECIATION OF CAR HAVE BEEN MADE. IN THE ABSENCE OF PROPER VOUCHERS OR VERIFICATION, THE REVENUE AUTHORITIES HAVE MADE THE IMPUGNED ADHOC DISALLOWANCES. IN THE ABSENCE OF SUPPORTING EVIDE NCES, AS ALSO NOT SERIOUSLY CONTESTED, THE VIEW TAKEN BY THE REVENUE AUTHORITIES IS HEREBY AFFIRMED . THESE TWO GROUNDS ARE HEREBY DISMISSED. ITA NO. 2514/AHD/2008 SMT. BRIJ M.SHARMA VS. ITO ASST.YEAR 2003-04 - 12 - 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 8/ 10 /2010. SD/- SD/- ( A.N. PAHUJA ) ( MU KUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED / /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPA RTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT(A PPEALS)-VI, BARODA 5. THE DR, AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..27/09/2010 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/10/2010 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 8/10/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8/10/10 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER