Shrichand Trithdas Nainani, Ahmedabad V. The Income tax Officer, Ward-2(3), Ahmedabad

ITA 2547/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6504 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 29-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 27-11-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C
• Keywords: Depreciation; Principle of natural justice; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER DATE OF HEARING : 29/04/2010 DRAFTED ON: 30/04/2010 ITA NOS.2547 & 2549/AHD/2006 ASSESSMENT YEARS: 2000-01 & 2002-03 RESPECTIVELY SHRICHAND TIRTHDAS NAINANI PROP: S.T. TYRE HOUSE MUNICIPAL SHOP NO.12 O/S. PREM GATE AHMEDABAD VS. THE INCOME TAX OFFICER WARD-2(3) AHMEDABAD PAN/GIR NO. : AASPN 2203 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI ASEEM THAKKAR RESPONDENT BY: SHRI M.C. PANDIT, SR. D.R. O R D E R PER SHRI MUKUL SHRAWAT, JUDICIAL MEMBER : BOTH THESE APPEALS HAVE BEEN FILED AT THE BEHEST OF THE ASSESSEE WHICH HAVE EMANATED FROM A CONSOLIDATED ORDER OF LE ARNED CIT(APPEALS)-VI, AHMEDABAD DATED 01/09/2006 PERTAIN ING TO ASSESSMENT YEARS 2000-01 AND 2002-03. FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS ARE HEREBY DECIDED BY THIS COMMO N ORDER. (A) GROUNDS FOR ASSESSMENT YEAR 2000-01 ARE AS FOL LOWS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.36,967/- MADE BY A.O. OUT OF SALARY EXPENSES. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 2 - 2. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS E RRED IN CONFIRMING AN ADDITION OF RS.10,000/- ON ACCOUNT OF CARTAGE EXPENSE. 3. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.15,000/- ON ACCOUNT OF CONSULTATION CHARGES. 4. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.5,000/- ON ACCOUNT OF CONVEYANCE EXPENSES. 5. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.12,000/- ON ACCOUNT OF ENTERTAINMENT EXPENSE. 6. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.15,265/- ON ACCOUNT OF MOTOR CAR EXPENSE. 7. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION MADE OF RS.11,184/- ON ACCOU NT OF DEPRECIATION ON MOTOR CARS. 8. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.9,000/- ON ACCOUNT OF PACKING & FORWARDING EXPENSES. 9. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.10,000/- ON ACCOUNT OF TELEPHONE EXPENSE. 10. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION MADE BY THE A.O. OF RS.98,15 2/- BEING SALES COMMISSION PAID TO SHRI DINESH NAINANI. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 3 - 11. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION MADE BY THE A.O. OF SALES COMMISSION OF RS.2,96,327/- BEING PAID TO ANIL MULC HANDANI RS.71,226/-, DHARMU P.MOTWANI RS.1,30,000/-, VIJAYBHAI ALANI RS.64,325/- AND FURTHER DISALLOWA NCE OF RS.30,000/-. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. (B) GROUNDS FOR ASSESSMENT YEAR 2002-03 ARE AS FOL LOWS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.45,830/-- MADE BY A.O. OUT OF SALARY EXPENSES. 2. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.5,000/- ON ACCOUNT OF CARTAGE EXPENSE. 3. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.5,000/- ON ACCOUNT OF ENTERTAINMENT EXPENSES. 4. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.20,000/- ON ACCOUNT OF MOTOR CAR & PETROL EXPENSES. 5. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.7,158/- ON ACCOUNT OF DEPRECIATION ON MOTOR CARS. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 4 - 6. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.9,000/- ON ACCOUNT OF PACKING & FORWARDING EXPENSES. 7. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.6,000/- ON ACCOUNT OF TELEPHONE EXPENSE. 8. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION OF RS.50,000/- ON ACCOUNT OF SALES TAX EXPENSE. 9. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN CONFIRMING AN ADDITION MADE BY THE A.O. OF RS.1,93, 665/- BEING SALES COMMISSION PAID TO SHRI DINESH NAINANI. 10. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ER RED IN CONFIRMING AN ADDITION MADE BY THE A.O. OF SALES CO MMISSION OF RS.3,31,126/- BEING PAID TO ANIL MULCHANDANI RS.8 8,450/-, DHARMU P.MOTWANI RS.96,228/-, VIJAYBHAI ALANI R S.98,448/- AND FURTHER DISALLOWANCE OF RS.50,000/-. 11. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEAR ING. 2. GROUND NOS.1 TO 9 FOR ASSESSMENT YEAR 2000-01 AN D GROUND NOS.1 TO 7 FOR ASSESSMENT YEAR 2002-03 ARE IN RESPE CT OF ADHOC DISALLOWANCES PERTAINING TO EXPENSES UNDER THE HEAD SALARY, CONVEYANCE, ENTERTAINMENT, MOTOR CAR AND PETROL EXP ENSES, DEPRECIATION ON MOTOR CAR, PACKING AND FORWARDING, TELEPHONE, ETC. 3. FACTS IN BRIEF IN RESPECT OF THESE GROUNDS AS EM ERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R. W.S.147 OF THE I.T. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 5 - ACT, 1961 DATED 23/03/2006 WERE THAT THE ASSESSEE A S A PROPRIETOR IN HIS INDIVIDUAL CAPACITY IS IN THE WHOLE-SALE TRADING OF TYRES, TUBES, ETC. THE PRIMARY REASON AS ASSIGNED BY THE ASSESSING OFFICER FOR THESE DISALLOWANCES WERE THAT CERTAIN INFORMATIONS AND EV IDENCES WERE CALLED FOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HO WEVER, THE ASSESSEE HAS FAILED TO COMPLY WITH THE SHOW-CAUSE NOTICES. THE ASSESSING OFFICER HAS FURTHER STATED THAT REQUISITE INFORMATIONS WERE NOT FURNISHED BY THE ASSESSEE. DUE TO THIS REASON HE HAS LEFT WITH NO OPTION BUT TO RESORT TO AN ADHOC DISALLOWANCE FOR EACH EXPENSE. WHILE DOING S O, THE ASSESSING OFFICER HAS TAKEN DUE CONSIDERATION OF THE TURNOVER OF THE ASSESSEE AS WELL AS THE PROFIT DECLARED FOR THE YEARS UNDER CON SIDERATION. EVENTHOUGH, BEING AGGRIEVED THE APPELLANT HAS PREFE RRED AN APPEAL BEFORE THE LEARNED CIT(APPEALS). 4. THE LEARNED CIT(APPEALS) HAS EXAMINED THE FACTS OF THE CASE AND, THEREAFTER, FOR ASSESSMENT YEAR 2000-01 ARRIVED AT THE CONCLUSION VIDE PARAGRAPH NO.5.2 AS UNDER:- 5.2. THE APPELLANTS ARGUMENT THAT THE DISALLOWANC ES MADE ARE EXCESSIVE IS CAREFULLY CONSIDERED. THE CARTAGE EX PENSES CLAIMED IS RS.98,787/- AS AGAINST TOTAL TURNOVER OF RS.3.51 CRORES. THE AO HAS DISALLOWED 20% OF THE EXPENSES. CONSIDERING TH E VOLUME OF THE TURNOVER, I WOULD RESTRICT THE DISALLOWANCE TO RS.10,000/-. THE APPELLANT DEALS IN TYRES. HE HAS CLAIMED CONS ULTANCY CHARGES OF RS.37,800/-. THIS IS IN ADDITION TO VAKIL FEES OF RS.5,800/- AND AUDIT FEE OF RS.5250/-. IT IS FOR THE APPELLANT T O EXPLAIN THE SUMS SPENT ON CONSULTANCY CHARGES. NO DETAILS WERE FOR THCOMING. IN THIS BACKGROUND THE DISALLOWANCE OF RS.15,000/- MAD E BY THE AO ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 6 - CANNOT BE REGARDED AS EXCESSIVE. THE ADDITION MAD E IS SUSTAINED. A SUM OF RS.15,000/- IS DISALLOWED OUT OF CONVEYANC E EXPENSES OF RS.69,270/-. CONSIDERING THE FACTS OF THE CASE, I WOULD RESTRICT THE DISALLOWANCE TO RS.5000/-. THE AO DISALLOWED ENT ERTAINMENT EXPENSES OF RS.12,000/-. THE ADDITION MADE IS CON FIRMED. AS PERSONAL ELEMENT IN MOTOR CAR EXPENSES CANNOT BE RU LED OUT, THE DISALLOWANCE OF 1/6 TH OF MOTOR CAR EXPENSES IS SUSTAINED. DISALLOWANCE OF PROPORTIONATE DEPRECIATION IS ALSO SUSTAINED. THE OFFICE EXPENSES CLAIMED IS RS.59,663/-. THE AO D ISALLOWED RS.10,000/-. CONSIDERING THE VOLUME OF THE BUSINE SS THIS CANNOT BE REGARDED AS EXCESSIVE. THE DISALLOWANCE MADE I S DELETED. THE TOTAL PACKING AND FORWARDING CHARGES CLAIMED IS RS. 96,000/- AND THE AO HAS DISALLOWED RS.20,000/-. TAKING INTO TH E VOLUME OF BUSINESS, I WOULD RESTRICT THE DISALLOWANCE TO RS.9 000/-. SALES PROMOTION EXPENSES CLAIMED IS RS.56,235/- AND RS.10 ,000/- IS DISALLOWED BY THE AO. CONSIDERING THE TURNOVER ACH IEVED BY THE APPELLANT THE EXPENSES CANNOT BE REGARDED AS EXCESS IVE. THE ADDITION MADE IS DELETED. THE AO HAS DISALLOWED R S.15,000/- OUT OF TELEPHONE EXPENSES OF RS.83,371/-. ADDITION IS RESTRICTED TO RS.10,000/-. AN ESTIMATED DISALLOWANCE OF RS.15,00 0/- WAS MADE OUT OF TRAVELLING EXPENSES OF RS.86,937/-. CONSID ERING THE VOLUME OF THE BUSINESS THE CLAIM CANNOT BE REGARDED AS EXC ESSIVE. THE DISALLOWANCE MADE IS DELETED. 4.1. LIKEWISE, FOR ASSESSMENT YEAR 2002-03, THE LEA RNED CIT(APPEALS) HAS EXAMINED THE DETAILS OF THE EXPENS ES AND ALLOWED PART RELIEF TO THE APPELLANT. 5. WE HAVE HEARD BOTH THE SIDES AND ALSO CAREFULLY EXAMINED THE FACTS OF THE CASE IN THE LIGHT OF THE ORDERS OF THE AUTHORITIES BELOW. AT THE OUTSET, WE HEREBY OBSERVE THAT A TAXPAYER WHO IS NO T VIGILANT BEFORE THE INVESTIGATING OFFICER, I.E. ASSESSING OFFICER IN FU RNISHING THE REQUISITE DETAILS; HAS NO RIGHT TO TAKE UP THE ISSUE IN APPEA L. IN THE PRESENT CASE, ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 7 - THIS APPELLANT HAS FAILED TO FURNISH THE REQUISITE INFORMATION AND THE DETAILS OF THE EXPENSES ALONGWITH CORROBORATIVE EVI DENCES DUE TO WHICH ADHOC DISALLOWANCES WERE MADE. EVEN THEN, THE FIR ST APPELLATE AUTHORITY HAS ADOPTED A LIBERAL APPROACH AND GRANTED PART REL IEF CONSIDERING THE OVERALL CIRCUMSTANCES OF THE CASE. IN VIEW OF THI S, ONCE THE REVENUE AUTHORITIES HAVE JUDICIOUSLY EXERCISED THEIR DISCRE TION THEN WE ARE NOT INCLINED TO INTERFERE WITH THOSE FINDINGS OF THE FI RST APPELLATE AUTHORITY. WITH THE RESULT, ALL THESE GROUNDS ARE HEREBY DISMI SSED. 6. GROUND NO.10 FOR ASSESSMENT YEAR 2000-01 AND GRO UND NO.9 FOR ASSESSMENT YEAR 2002-03 PERTAINED TO THE DISALLOWAN CES OF COMMISSION PAID TO MR. DINESH NAINANI, BROTHER OF THE ASSESSEE . AS FAR AS THE ASSESSING OFFICER WAS CONCERNED, HE HAS EXAMINED MR .DINESH T. NAINANI AND ALSO GRANTED OPPORTUNITY FOR THE CROSS- EXAMINATION. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID PER SON WAS NOT RENDERING ANY SERVICE FOR WHICH THE CLAIM OF COMMISSION WAS M ADE. IN HIS OPINION, THE SAID PERSON HAD NO KNOWLEDGE OF THE BUSINESS SI NCE HE HAD NOT INFORMED ABOUT THE DETAILS OF THE TRANSACTION. FU RTHER, THE ASSESSING OFFICER HAS ALSO MENTIONED THAT THE ASSESSEE HAS NO T ESTABLISHED THE QUANTUM OF BUSINESS DONE BY HIS BROTHER, I.E. MR. D INESH T.NAINANI FOR WHICH COMMISSION WAS PAID. ACCORDINGLY, FOR BOTH THE YEARS THE RESPECTIVE DISALLOWANCES OF RS.98,152/- AND RS.1,93 ,665/- WERE MADE. BEING AGGRIEVED THE MATTER WAS CARRIED BEFORE THE F IRST APPELLATE AUTHORITY. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 8 - 7. THE LEARNED CIT(APPEALS) HAS AFFIRMED THE FINDIN GS OF THE ASSESSING OFFICER FOR THE REASONS THAT THE SAID PAR TY DID NOT HAVE THE IDEA ABOUT THE SALES RECORDED AND ALSO NOT RIGHTLY INFOR MED THE NATURE OF SERVICES RENDERED FOR WHICH THE IMPUGNED COMMISSION WAS STATED TO BE EARNED. THE ACTION OF THE ASSESSING OFFICER WAS A FFIRMED AND THIS IS THE CAUSE OF GRIEVANCE BEFORE US. 8. WE HAVE HEARD BOTH THE SIDES. WE HAVE CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION FILED. THE LEARNED AUTHORISED REPRESENTATIVE SHRI ASEEM THAKKA R APPEARING ON BEHALF OF THE ASSESSEE HAS VEHEMENTLY STATED THAT T HE STATEMENT OF MR.DINESH NAINANI AS WELL AS HIS CROSS-EXAMINATION HAVE NOT BEEN PROPERLY APPRECIATED BY THE REVENUE AUTHORITIES. BEFORE US, IN THE COMPILATION, AN ENGLISH TRANSLATION OF THE SAID STA TEMENT IS PLACED ON RECORD. THE LEARNED AUTHORISED REPRESENTATIVE OF T HE ASSESSEE HAS DRAWN OUR ATTENTION ON QUESTION NOS.2, 3, 4, 5, 6 & 7; FOR REFERENCE REPRODUCED BELOW:- Q-2 HOW LONG HAS YOU WORKED WITH YOUR BROTHER MR. SHRICHAND T.NAINANI? A-2 I HAVE BEEN WORKING WITH MY BROTHER MR.SHRICH AND T.NAINANI SINCE APPROX 2 YEARS. Q-3 GIVE THE DETAILS OF YOUR WORK AND BUSINESS ACT IVITIES? A-3 I AM LOOKING AFTER THE COLLECTION AND MARKETI NG FOR TAKING ORDER OF SUPPLY OF THE GOODS FROM OUTSIDE OF AHMEDA BAD. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 9 - Q-4 IN THE EARLIER QUESTION NO.3 YOU HAVE REPLIED T HAT YOU GO OUT OF AHMEDABAD FOR TAKING ORDER OF SUPPLY OF GOODS. THEN WITH WHOM HAVE YOU PERSONALLY CONTACTED? GIVE NAME AND AUTHORIZE PERSON NAME AT THAT CONCERN WHOM YOU HAVE MET? A-4 I HAVE CONTACTED FOR TAKING ORDER TO MR.NARESHB HAI FOR JYOTI TYRE AT BHAVNAGAR, MR.MAHESHBHAI FOR JAGDISH TYRE A T RAJKOT. Q-5 WHEN AND WHERE HAVE GONE OUT SIDE TO TAKE THE O RDER FOR SUPPLY? A-5 BEFORE ONE MONTH I HAVE GONE TO JYOTI TYRE, NEA R RAILWAY STATION AT BHAVNAGAR AND CONTACTED TO NARESHBHAI AN D TAKEN ORDER OF RS.50000/- FROM HIM AND I HAVE NOT GONE TO ANY O THER PLACE TO TAKE THE ORDER. Q-6 WHEN HAVE YOU VISITED OUTSIDE OF AHMEDABAD FOR TAKING ORDER OF GOODS, WHICH BROCHURES OF BUSINESS HAVE YO U BROUGHT WITH YOU? LET KNOW THE PHONE NO.OF THAT PARTY? A-6 I HAVE TAKEN BROCHURES AND CATALOGUE OF ITEMS F OR TYRES BUSINESS OF MALHOTRA COMPANY AND WE ARE THE SOLE DI STRIBUTOR OF THE SAID COMPANY OF GUJARAT. JUST NOW I DONT REME MBER THE TELEPHONE NO. OF THAT PARTY. Q-7 WHEN YOU HAVE VISITED TO BHAVNAGAR, HOWMUCH EXP ENSES HAVE YOU MADE? A-7 THE EXPENSES FOR FARE TICKET OF RS.200/- FORM A HMEDABAD TO BHAVNAGAR AND THEN USUALLY RETURN BACK TO AHMEDABAD AT THE SAME DAY. 8.1. THE LEARNED AUTHORISED REPRESENTATIVE OF THE A SSESSEE HAS ALSO DRAWN OUR ATTENTION ON THE QUESTIONS ASKED DURING C ROSS-EXAMINATION PARTICULARLY QUESTION NOS.2 & 7 REPRODUCED BELOW:- Q-2 HOW LONG HAS YOU WORKED WITH YOUR BROTHER MR.SHRI CHAND T.NAINANI? A-2 I HAVE BEEN WORKING WITH MY BROTHER MR.SHRICH AND T.NAINANI SINCE APPROX 2 YEARS. ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 10 - Q-7 WHEN YOU HAVE VISITED TO BHAVNAGAR, HOWMUCH EXPENS ES HAVE YOU MADE? A-7 THE EXPENSES FOR FARE TICKET OF RS.200/- FORM A HMEDABAD TO BHAVNAGAR AND THEN USUALLY RETURN BACK TO AHMEDABAD AT THE SAME DAY. 8.2. IN THE BACKGROUND OF THE AFOREMENTIONED QUEST ION-ANSWERS, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE H AS ARGUED THAT THE SAID PERSON WAS FACTUALLY WORKING WITH HIS BROTHER I.E. THE APPELLANT AND HE HAS DULY ACKNOWLEDGED THE NATURE OF SERVICES REN DERED FOR WHICH HE HAS EARNED THE COMMISSION. THE ONLY REASON ASSIGN ED BY THE ASSESSING OFFICER WAS THAT THE SAID PERSON WAS UNABLE TO DIST INGUISH THE NATURE OF RECEIPT WHETHER IT WAS HIS SALARY OR COMMISSION IN COME. BUT WHATEVER WAS THE NATURE OF RECEIPT, THE SAME WAS DULY DISCLO SED BY HIM IN HIS RETURN. IN SUPPORT, THE LEARNED AUTHORISED REPRES ENTATIVE OF THE ASSESSEE HAS DRAWN OUR ATTENTION ON THE COMPUTATION OF INCOME FILED ALONGWITH THE INCOME-TAX RETURN OF MR. DINESH T.NAI NANI. 8.3. AS IS EVIDENT FROM THE ABOVE DISCUSSION ON ONE HAND, THE SAID PERSON HAS ACCEPTED THE NATURE OF SERVICES RENDERED BY HIM FOR WHICH THE IMPUGNED COMMISSION ALLEGED TO HAVE BEEN PAID. HO WEVER, ON THE OTHER HAND, THE REVENUE DEPARTMENT HAD TOTALLY OVERLOOKE D THE STATEMENTS OF THE ASSESSING OFFICER. RELEVANT QUESTION-ANSWERS H AVE ALREADY BEEN REPRODUCED ABOVE FROM WHICH AN IMPRESSION CAN BE GA THERED THAT MR.DINESH T.NAINANI WAS CONNECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSEE IN SOMEWAY OR THE OTHER. HE HAS ACKNOWLED GED THAT HE HAD LOOKED AFTER THE COLLECTION AS WELL AS THE MARKETIN G OF THE PRODUCT. HE ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 11 - HAS AFFIRMED THAT HE HAD CONTACTED SOME OF THE PART IES TO TAKE THE ORDERS FOR SUPPLY OF GOODS. WE HAVE ALSO FOUND THAT DURI NG CROSS-EXAMINATION, AS WELL, HE HAS EXPRESSED KNOWLEDGE ABOUT THE BUSIN ESS ACTIVITY OF HIS BROTHER. HOWEVER, BOTH THE REVENUE AUTHORITIES HA VE GIVEN NO COGNIZANCE OF THE SAID KNOWLEDGE OF THE BUSINESS AS EXPRESSED BY MR.DINESH T.NAINANI. IN SUCH A SITUATION, IT WOULD BE FAIR AND REASONABLE FOR US TO RESTORE THIS ISSUE BACK TO THE STAGE OF A SSESSING OFFICER, SO THAT HE CAN RE-EXAMINE AND RE-INVESTIGATE THE NATURE OF SERVICES RENDERED BY MR.DINESH T.NAINANI AND ONLY THEREAFTER CAN ARRIVE AT A CORRECT CONCLUSION. HOWEVER, WE ALSO HEREBY DIRECT THE ASS ESSING OFFICER TO TAKE INTO ACCOUNT THE AFOREMENTIONED STATEMENT AS A WHOLE WITHOUT PICKING UP ONE OR TWO SENTENCES OR CHOOSING FEW WOR DS OUT OF THE TOTAL STATEMENT SO RECORDED. LIKEWISE, WE HEREBY DIRECT THIS APPELLANT TO FULLY CO-OPERATE WITH THE REVENUE DEPARTMENT BY FURNISHIN G NECESSARY CORROBORATIVE EVIDENCES IN SUPPORT OF THE CLAIM. WITH THESE DIRECTIONS, THESE GROUNDS FOR THE RESPECTIVE ASSESSMENT YEARS A RE HEREBY ALLOWED ONLY FOR STATISTICAL PURPOSES. 9. APROPOS GROUND NO.11 FOR ASSESSMENT YEAR 2000-01 AND GROUND NO.10 FOR ASSESSMENT YEAR 2002-03 ARE NOT PRESSED B Y THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE, HENCE, H EREBY DISMISSED BEING NOT PRESSED. 10. NOW, THE ONLY GROUND LEFT FOR OUR ADJUDICATION IS GROUND NO.8 FOR ASSESSMENT YEAR 2002-03 AND IN THIS REGARD, THE OBS ERVATION OF THE ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 12 - ASSESSING OFFICER WAS THAT THE ASSESSEE HAS NOT FUR NISHED THE COPY OF THE SALES-TAX ORDER AND ALSO FAILED TO RECONCILE THE SA LES-TAX PAID. DUE TO THE SAID FAILURE, THE IMPUGNED ADDITION OF RS.50,000/- OUT OF THE SALES-TAX EXPENSES WAS DISALLOWED. THE FIRST APPELLATE AUTHOR ITY HAS AFFIRMED THE ACTION OF THE ASSESSING OFFICER. 11. ON HEARING THE RIVAL SUBMISSIONS, WE HAVE NOW NOTICED THAT THE SALES-TAX ORDER IS FURNISHED IN THE COMPILATION AND THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS ALSO EXPRESSED HIS WILLINGNESS TO FURNISH THE RE-CONCILIATION OF SALES -TAX PAID. SINCE THOSE EVIDENCES WERE NOT BEFORE THE ASSESSING OFFICER, TH EREFORE, IN THE INTEREST OF NATURAL JUSTICE, WE HEREBY RESTORE THIS GROUND A S WELL TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO THE APPELL ANT TO FURNISH THOSE EVIDENCES AND FULLY CO-OPERATE WITH THE ASSESSING O FFICER TO GET THE MATTER RESOLVED AT AN EARLY DATE. 12. IN THE RESULT, BOTH THESE APPEALS ARE PARTLY ALLOWED AS OBSERVED HEREINABOVE. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/04/2010. SD/- SD/- ( A.N. PAHUJA ) ( MUKUL SHRAWA T ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30 / 04 /2010 ITA NOS.2547 & 2548/AHD /2006 SHRICHAND TIRTHDAS NAINANI VS. ITO ASST.YEARS 2001-02 & 2002-03 (RESPECTIVELY) - 13 - T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VI, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD