The ACIT, Central Circle-4, Surat V. M/s. Bhavin Fashions, Surat

ITA 2611/AHD/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94389 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Section: 133A

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2611/AHD/2009 / ASSTT. YEAR: 2007-2008 ACIT, CENT.CIR.4 SURAT. VS M/S.BHAVIN FASHIONS 241, GIDC, PANDESARA SURAT. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI D.C. MISHRA, CIT-DR ASSESSEE BY : SHRI SANJAY KAPADIA WITH SHRI ANKUR D. SHAH ! / DATE OF HEARING : 25/08/2015 '#$ ! / DATE OF PRONOUNCEMENT: 16/09/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE CIT(A)-II DATED 17.6.2009 PASSED FOR THE ASSTT.YEAR 2007-08. 2. THE REVENUE HAS TAKEN EIGHT GROUNDS OF APPEAL, W HICH ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES. THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN N ATURE. IN BRIEF, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.7,84,980/-. ITA NO.2611/AHD/2009 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM AND MEMBER OF COLOURTEX GROUP OF SURAT. SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT AT THE BUSINESS AND F ACTORY PREMISES OF THE ASSESSEE ON 24.7.2006. THE ASSESSEE HAS FILED ITS RETURN OF INCOME 1.11.2007 DECLARING TOTAL INCOME AT RS.NIL. THE AS SESSEES CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER S ECTION 143(2) OF THE INCOME TAX ACT DATED 24.6.2008 WAS ISSUED AND SERVE D UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, THE LD.AO H AS OBSERVED THAT THE SURVEY TEAM HAS REPORTED A DEFICIT IN CASH AVAILABL E WITH THE ASSESSEE ON THE DATE OF SURVEY. IT EMERGES OUT IN THE BOOKS OF ACCOUNTS THAT THE ASSESSEE HAS SHOWN A CASH BALANCE OF RS.9,12,000/- (AS PER THEIR BOOK) HOWEVER, THE ACTUAL CASH FOUND WAS OF RS.1,27,020/- . THE DEFICIT OF CASH REPRESENTING RS.7,84,980/- HAS BEEN ADDED BY T HE AO. 4. ON APPEAL, THE LD.CIT(A) HAS DELETED THE ADDITIO N BY OBSERVING AS UNDER: 2. GROUND NO.1 IS AGAINST THE ADDITION OF RS.7,84, 980/- ON ACCOUNT OF DEFICIT IN CASH. DURING THE COURSE OF S URVEY PROCEEDINGS CASH OF RS.1,27,020/- WAS FOUND FROM TH E PREMISES OF THE APPELLANT. HOWEVER, CASH RECORDED IN THE BO OKS OF ACCOUNTS ON THE DATE OF SEARCH WAS RS.9,12,000/-. THUS, THERE WAS A ASH DEFICIT OF RS.7,84,980/- 3. THE APPELLANT HAS SUBMITTED THAT THE CASH BELONG S TO OWNERS AND FAMILY MEMBERS OF THE AND THE SAME FACT WAS ALSO BROUGHT TO THE NOTICE OF THE LEARNED AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, IT ALSO SUBMITS TH AT THE COPY OF PERSONAL CASH BOOK OF THE OWNER AND FAMILY MEMBER W AS ALSO PRODUCED BEFORE THE LEARNED AO. HOWEVER, IN DISREGA RD OF THE DOCUMENTARY EVIDENCES AND WITHOUT APPRECIATING THE FACT THAT THERE ARE MORE THAN 25 FAMILY MEMBERS OF THE APPELL ANT GROUP AND THE IMPUGNED CASH DEFICIT MAY BE LYING WITH ANY OF THE FAMILY MEMBER OF THE GROUP, THE LEARNED AO HAS MADE THE IM PUGNED ADDITION ON ACCOUNT OF DEFICIT IN CASH WHICH IS NOT JUSTIFIED AND NEEDS TO BE DELETED IN THE INTEREST OF NATURAL JUST ICE AND EQUITY. 4. I HAVE CONSIDERED THE FACTS AND SUBMISSIONS OF THE APPELLANT. I AGREE WITH THE APPELLANT'S VIEW. NO AD DITION CAN BE MADE FOR THE DEFICIT IN CASH FOUND AT THE TIME OF S URVEY. HENCE, THE ADDITION IS NOT JUSTIFIED AND THEREFORE, THE AD DITION IS DELETED. ITA NO.2611/AHD/2009 3 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD. ALONG WITH THIS, WE HAVE HEAR D APPEAL IN THE CASE OF SHRI JAYANTILAL T. JARIWALA BEARING ITA NO.2546 AND 2616/AHD/2009. THE DEPARTMENT IN ITS APPEAL IN ITA NO.2456 AND 261 6/AHD/2009 HAS NOT CHALLENGED THE DELETION OF RS.12 LAKHS WHICH WA S ADDED BY THE AO ON THE GROUND THAT THE EXCESS CASH WAS FOUND AT THE PREMISES OF SHRI JAYANTILAL T. JARIWALA. IT IS PERTINENT TO MENTION THAT SHRI JAYANTILAL T. JARIWALA, WHO IS THE HEAD OF THE GROUP AND EXCESS C ASH WAS FOUND AT HIS PREMISES ON THE DATE OF SEARCH, WHICH WAS CARRIED O UT SIMULTANEOUSLY WITH THE SURVEY CONDUCTED AT THE PREMISES OF THE AS SESSEE. THE ASSESSEE HAS CONTENDED THAT THE CASH MUST HAVE BEEN TAKEN BY OWNERS OR THE FAMILY MEMBERS AT THE THEIR RESIDENCE. THER EFORE, IF BOTH THESE ISSUES ARE RECONCILED, THEN IT WOULD REVEAL THAT TH E EXPLANATION ON THE CASH AT THE RESIDENCE OF JAYANTILAL T. JARWALA WAS THAT IT COMES FROM VARIOUS SOURCES WHICH HAS DULY BEEN REFLECTED IN TH E BOOKS. WE HAVE UPHELD THE ORDER OF THE CIT(A) IN THE CASE OF JAYAN TILAL JARIWALA. IT IS PERTINENT TO MENTION THAT DEPARTMENT EVEN DID NOT T AKE A GROUND CHALLENGING THE DELETION OF RS.12 LAKHS IN THE CASE OF SHRI JAYANTILAL JARIWALA. SEEING OVERALL RECONCILIATION, WE ARE OF THE VIEW THAT THERE IS NO DEFICIT IN THE CASE. THE LD.FIRST APPELLATE AUT HORITY HAS RIGHTLY APPRECIATED THE CONTROVERSY AND HAS DELETED THE ADD ITION. 6. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT I N ITS APPEAL. IT IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 16 TH SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 16/09/2015