The ACIT-CC-1, Baroda V. Smt. Alkaben N. Patel, Anand

ITA 2686/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1919 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Keywords: Peak credit; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING:7/12/2009 DRAFTED ON:7/12/200 9 ITA NO.2686/AHD/2009 ASSESSMENT YEAR : 2006-2007 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE.1, 6 TH FLOOR, AAYKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS. SMT.ALKABEN N. PATEL NARAYAN BUNGLOW, PAKINDRA GAM, ANAND. PAN/GIR NO. : APQPP 9712 M (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SHELLEY JINDAL CIT D.R. RESPONDENT BY: NONE O R D E R PER BENCH:- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-IV, AHMEDABAD, DATED 31 ST MARCH 2009 IN APPEAL NO.CIT(A)-IV/62.B/CC-1/08-09. 2. GROUND NO.1 OF THE APPEAL RELATES TO THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIRECTING THE L EARNED ASSESSING OFFICER TO ALLOW DEDUCTION FOR JEWELLERY BEING 500 GM. IN THE NAMES OF THE ASSESSEE OUT OF THE ADDITION OF RS.6,58,918/- ON A CCOUNT OF INVESTMENT IN JEWELLERY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS.6,58,918/- UNDISCLOSED INVESTME NT IN JEWELLERY OF 993 ITA NO .2686/AHD/2009 SMT. ALKABEN N. PATEL ASST.YEAR -2006-2007 - 2 - GRAMS. IN APPEAL, THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS) FOLLOWING THE CIRCULAR NO.1916 OF CBDT DATED 11.05. 1994 DIRECTED THE LEARNED ASSESSING OFFICER TO ALLOW DEDUCTION FOR JE WELLERY WEIGHING 500 GRAMS IN THE NAME OF THE ASSESSEE. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. THE ASSESSEE FILED ADJOURNMENT APPLICATION WHICH WAS REJECTED BY THE BENCH. THE BENCH WAS OF THE VIEW THAT THE APPEA LS CAN BE DISPOSED OFF IN THE ABSENCE OF THE ASSESSEE AFTER CONSIDERING TH E ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND THE MATERIA LS AVAILABLE ON RECORDS. THEREFORE, THE APPEALS WERE HEARD EX-PARTE QUA THE RESPONDENT AND THE DISPOSED OFF ACCORDINGLY. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. THE LEARNED ASSESSING OFFICER MADE ADDITIO N OF RS.6,58,918/- UNDISCLOSED INVESTMENT IN JEWELLERY OF 993 GRAMS. I N APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOLLOWING THE C IRCULAR NO.1916 OF CBDT DATED 11.05.1994 DIRECTED THE LEARNED ASSESSIN G OFFICER TO ALLOW DEDUCTION FOR JEWELLERY WEIGHING 500 GRAMS IN THE NAME OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE MERELY RELI ED ON THE ORDER OF THE LEARNED ASSESSING OFFICER. HE COULD NOT BRING ANY M ATERIAL ON RECORD TO SHOW THAT THE ASSESSEE COULD NOT HAVE POSSESSED ANY OLD JEWELLERY. HE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) IN DIRECTING THE LEARNED ASSESS ING OFFICER TO ALLOW THE DEDUCTION ON ACCOUNT OF 500 GRAMS OF JEWELLERY IN THE NAME OF THE ASSESSEE FOLLOWING THE CBDT CIRCLER. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. ITA NO .2686/AHD/2009 SMT. ALKABEN N. PATEL ASST.YEAR -2006-2007 - 3 - 6. GROUND NO.2 OF THE APPEAL OF THE REVENUE RELATES TO THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIRECTI NG THE LEARNED ASSESSING OFFICER TO ALLOW TELESCOPING OF ADDITION OF RS.7,95,000/- ON ACCOUNT OF REMUNERATION RECEIVED BY THE ASSESSEE AG AINST THE AMOUNT WITHDRAWN FROM PARTNERSHIP FIRM M/S.JAYESH FINANCE AFTER VERIFYING FROM THE SEIZED MATERIAL. 7. THE BRIEF FACTS OF THE CASE ARE THAT M/S. JAYESH FINANCE HAS MADE AN ADVANCE OF RS.25 LACS TO SHRI KALPESH S. THAKKAR WH O FAILED TO REPAY THE LOAN. THE HUSBAND OF THE ASSESSEE WHO WAS PARTNER OF THE FIRM AND SHRI NIKUL C. PATEL POWER OF ATTORNEY HOLDER TRANSFERRED THE LAND AT R.S.NO.117/2B IN THE NAME OF THE ASSESSEE FOR DEEME D CONSIDERATION OF RS.7,95,000/-. SINCE, THE ASSESSEE WAS THE BENEFICI ARY, THE LEARNED ASSESSING OFFICER ADDED THE SUM OF RS.7,95,000/- TO THE INCOME OF THE ASSESSEE AS DEEMED REMUNERATION RECEIVED BY THE ASS ESSEE FROM THE AFORESAID FIRM. 8. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)DIRECTED THE LEARNED ASSESSING OFFICER TO VERIFY FROM SEIZED MATERIAL AVAILABLE IN HIS POSITION WHETHER ALL ADDI TIONS MADE IN THE HANDS OF THE ASSESSEE ARE COVERED IN THE TELESCOPING OF I NCOME WITHDRAWN BY THE ASSESSEE ON THE BASIS OF UNACCOUNTED BUSINESS OF MO NEY LENDING CARRIED OUT BY THE PARTNERSHIP FIRM M/S.JAYESH FINANCE AND THE AMOUNT OF PROFIT EARNED FROM UNACCOUNTED MONEY LENDING BUSINESS AS W ELL AS WORKING OUT OF ADDITION ON THE BASIS OF INCREMENTAL PEAK CREDIT OF THE FIRM. 9. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON ITA NO .2686/AHD/2009 SMT. ALKABEN N. PATEL ASST.YEAR -2006-2007 - 4 - RECORD. THE ASSESSEE CLAIMED BEFOR THE LOWER AUTHOR ITIES THAT M/S. JAYESH FINANCE HAS MADE AN ADVANCE OF RS.25 LACS TO SHRI K ALPESH S. THAKKAR WHO FAILED TO REPAY THE LOAN. THE HUSBAND OF THE A SSESSEE WHO WAS PARTNER OF THE FIRM AND SHRI NIKUL C. PATEL POWER OF ATTORN EY HOLDER TRANSFERRED THE LAND AT R.S.NO.117/2B IN THE NAME OF THE ASSESSEE F OR DEEMED CONSIDERATION OF RS.7,95,000/-. SINCE, THE ASSESSEE WAS THE BENEFICIARY, THE LEARNED ASSESSING OFFICER ADDED THE SUM OF RS.7,95, 000/- TO THE INCOME OF THE ASSESSEE AS DEEMED REMUNERATION RECEIVED BY THE ASSESSEE FROM THE AFORESAID FIRM. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIRECTED THE LEARNED ASSESSING OFFICER TO VERIFY FROM THE SEIZED MATERIAL WHETHER THE ADDITIONS MADE IN THE H ANDS OF THE ASSESSEE ARE COVERED IN THE TELESCOPING OF INCOME WITHDRAWN BY THE ASSESSEE FROM THE PARTNERSHIP FIRM M/S.JAYESH FINANCE AS WELL AS WORK ING OUT OF ADDITION ON THE BASIS OF INCREMENTAL PEAK CREDIT OF THE FIRM. W E FIND THAT THE UNDISPUTED FACTS OF THE CASE IS THAT THE ASSESSEE H AS RECEIVED LAND BY EXECUTION OF A DEED BY SRI NIKUL C. PATEL ON BEHALF OF THE PARTNERSHIP FIRM M/S JAYESH FINANCE. THE LEARNED ASSESSING OFFICER H AS TREATED THE ABOVE TRANSFER AS INCOME OF THE ASSESSEE WHICH THE ASSESS EE DISPUTED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). FROM T HE MATERIALS AVAILABLE BEFORE US IT IS NOT CLEAR WHETHER THE LEA RNED ASSESSING OFFICER ALLOWED ANY DEDUCTION IN RESPECT OF THE ALLEGED REM UNERATION OF RS 7,95,000/- PAID BY THE FIRM TO THE ASSESSEE IN THE COMPUTATION OF INCOME OF THE FIRM OR NOT. FURTHER FROM THE FACTS IT IS NOT CLEAR THAT WHETHER M/S JAYESH FINANCE HAS GIVEN THE LAND IN QUESTION TO TH E ASSESSEE AS REMUNERATION OF THE ASSESSEE OR AS A LOAN OR HAS GI VEN THE LAND IN LIEU OF CONSIDERATION RECEIVABLE BY THE ASSESSEE. IN ABSENC E OF THE ABOVE INFORMATION AND DETAILS IN OUR CONSIDERED OPINION I T IS NOT POSSIBLE TO ADJUDICATE THE ISSUE UNDER CONSIDERATION. FURTHER, WE FIND THAT NO MATERIAL IS AVAILABLE ON RECORD TO SHOW THAT THE ASSESSEE WA S A PARTNER IN THE FIRM ITA NO .2686/AHD/2009 SMT. ALKABEN N. PATEL ASST.YEAR -2006-2007 - 5 - M/S JAYESH FINANCE AND HAS MADE WITHDRAWAL OF ANY I NCOME THEREFROM. THE LEARNED ASSESSING OFFICER TREATED THE THE RECEI PT OF LAND AS REMUNERATION OF THE ASSESSEE BUT HE COULD NOT BRING ON RECORD THE SERVICES WHICH THE ASSESSEE RENDERED TO THE FIRM IN LIEU OF WHICH THE ALLEGED REMUNERATION WAS RECEIVED BY THE ASSESSEE. WE FIND THAT THE ORDERS OF BOTH THE LOWER AUTHORITIES ARE NOT CLEARLY DEPICTING THE FULL FACTS AND CIRCUMSTANCES OF THE CASE. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALSO HAS NOT STATED WHICH WAS THE ACCO UNT OF THE ASSESSEE WITH THE FIRM M/S JAYESH FINANCE AND WHAT WAS THE I NCOME EARNED BY THE ASSESSEE FROM THE FIRM M/S JAYESH FINANCE IN RESPEC T OF WHICH HE ALLEGED THAT WITHDRWWAL WAS MADE BY THE ASSESSEE. WE THEREF ORE SET ASIDE THE ORDERS OF BOTH THE LOWER AUTHORITIES ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER W ITH THE DIRECTION TO ADJUDICATE THE MATTER AFRESH IN ACCORDANCE WITH LAW BY PASSING A SPEAKING ORDER AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STAT ISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES IN THE COURT ON 07/12/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 07/12/2009 PREPARED AND COMPARED BY : PARAS ITA NO .2686/AHD/2009 SMT. ALKABEN N. PATEL ASST.YEAR -2006-2007 - 6 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD