Shri Prafulbhai @ Rohitbhai J.Shah, Surat V. The ACIT., Cent.Circle-1, Surat

ITA 2795/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1810 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-12-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 13-12-2006
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND N. S. SAINI, AM ) ITA NO.2795 AND 2796/AHD/2006 A. Y.: 2001-02 AND 2002-03 SHRI PRAFULOBHAI @ ROHITBHAI J. SHAH, PROP. SAVITA ENTERPRISE, 2/4456, SHIVDAS AVERI NI SHERI, SAGRAMPURA, SURAT PA NO. AFXPS 3412 G VS THE A. C. I. T., CENTRAL CIRCLE-1, AAYAKAR BHAVAN, MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TUSAR HEMANI,AR RESPONDENT BY SHRI ANIL KUMAR, DR DATE OF ORDER RESERVED . O R D E R PER BHAVNESH SAINI: BOTH THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-XVII, AHMEDABAD DATED 10-10-2006 FOR THE ASSESSMENT YEARS 2001-02 AND 200 2-03, CHALLENGING THE ADDITIONS OF RS.22,49,000/- AND RS.18,00,000/- FOR BOTH THE ASSESSMENT YEARS INVESTED IN NSCS/ KVPS OUT OF FUND S AVAILABLE WITH THE ASSESSEE. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIALS AVAILABLE ON RECORD. BOTH THE APPEALS ARE TIME BARRED BY TWO DAYS. THE DELAY IS EXPLAINED. THE LEARNED DR HAS RAISED NO OBJECTION I N CONDONING THE NOMINAL DELAY. CONSIDERING THE EXPLANATION OF THE A SSESSEE AND THAT ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 2 LEARNED DR HAS NOT OBJECTED, THE DELAY OF TWO DAYS IN PREFERRING THE APPEALS ARE, THEREFORE, CONDONED. 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH U/S 132 OF THE INCOME TAX ACT WAS CARRIED OUT ON 24-7-2003 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND THE BUSINESS PREMISES OF THE ASSESSEE WAS ALSO COVERED U/S 133A OF THE INCOME TAX ACT. DURING THE COURSE OF SE ARCH CERTAIN DOCUMENTS AND LOOSE PAPERS WERE FOUND AND SEIZED. T HE ASSESSEE MADE A DISCLOSURE OF RS.2,76,68,805/- ON ACCOUNT OF CASH LOANS GIVEN TO DIFFERENT PERSONS AGAINST SECURITY OF CHEQUES. IN R EPLY, TO QUESTION NO. 3 OF HIS STATEMENT RECORDED U/S 132(4) OF THE INCOME TAX ACT, THE ASSESSEE FILED RETURN FOR THE EARLIER YEARS AS PER SECTION 1 53A OF THE INCOME TAX ACT. DURING THE COURSE OF SEARCH ON THE BACK SIDE O F PAGE 1 OF ANNEXURE A/2 SEIZED FROM THE RESIDENCE OF THE ASSESSEE, IT W AS FOUND THAT THE ASSESSEE HAD MADE ENTRIES OF NSCS AND KVPS WHICH AR E RECORDED AT PAGE 3 OF THE ASSESSMENT ORDER. IT SHOWS THAT ENTRIES OF RS.24,30,000/- OF NSCS AND RS.16,00,000/- OF KVPS, 23-12-2000 AND 25- 3-2003 HAVE BEEN CROSSED. OTHER 24 ENTRIES OF NSCS RELATING TO THE AMOUNT OF RS.23,70,000/- PERTAINING TO THE PERIOD 07-09-2006 AND ONWARDS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAID ENTRIES DURI NG THE COURSE OF POST SEARCH ENQUIRIES. THE ASSESSEE EXPLAINED THAT SOURC E OF NSCS AND KVPS IS STILL BEING EXAMINED. THE ASSESSEE COULD NOT SUB MIT ANY EXPLANATION REGARDING SOURCE OF ACQUISITION OF NSCS AND KVPS TO THE EXTENT OF RS.40,30,000/- AS POINTED OUT BY THE AO. THE ASSESS EE WAS AGAIN ASKED TO EXPLAIN THE SOURCE OF ACQUISITION OF NSCS AND KV PS. THE ASSESSEE EXPLAINED AS REGARDS INVESTMENT IN LIC JEEVAN DHARA POLICIES THAT IT WAS AN INVESTMENT MADE BY MRS. PREETYBEN SHAH, WIFE OF THE ASSESSEE OUT OF HER SHARE OF AGRICULTURAL INCOME. IT WAS ALSO EXPLA INED THAT THE ASSESSEE HAD MADE AGREEMENT WITH M/S. SHANTI NAGAR OF KAILAS H NAGAR, SURAT FOR PURCHASE OF 16 FLATS IN THEIR ANAMIKA APARTMENTS AN D MADE PAYMENT OF RS.41,00,000/- IN THE YEAR 1990-91, 1992-92 AND 199 3-94. SINCE THE ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 3 PROJECT FAILED, THEREFORE THE ORGANIZERS HAVE RETUR NED THE BOOKING AMOUNT IN THE FINANCIAL YEARS 1999-2000, 2000-01 AND 2001- 02 AFTER A LONG DELAY. THE AMOUNTS RECEIVED, WAS INVESTED IN NSCS A ND KVPS. LETTER OF CONFIRMATION WAS FILED BEFORE THE AO. THE AO, THERE FORE, NOTED THAT THE REPLY OF THE ASSESSEE SHOWS THAT INVESTMENT IN NSCS AND KVPS IS MADE OUT OF AMOUNT RECEIVED FROM SHRI JASHWANT M. SHAH, PROPRIETOR OF M/S. SHANTI NAGAR. THE ASSESSEE WAS ASKED TO PRODUCE THE SAID PERSON ALONG WITH SOURCE OF PAYMENT TO ASSESSEE. THE AO NOTED T HAT THOUGH THE ASSESSEE HAS MADE INVESTMENTS IN THE YEAR 1992, 199 3 AND 1994 BUT THE ASSESSEE HAS NOT DISCLOSED THE SAID AMOUNT IN THE R ETURN OF INCOME AND THE AMOUNT INVESTED IN CASH. THE STATEMENT OF SHRI JASHWANT M. SHAH WAS RECORDED U/S 131 OF THE INCOME TAX ACT IN WHICH HE HAS CONFIRMED TO HAVE RECEIVED RS.41,00,000/- IN CASH FROM THE AS SESSEE DURING THE PERIOD 1992 TO 1994. BUT NO EVIDENCE OF THE SAID CL AIM COULD BE PRODUCED BECAUSE IT WAS ADMITTED BY HIM THAT THE RE CORDS OF THE SAID YEARS WERE NOT AVAILABLE WITH HIM. HE HAS PRODUCED COPY OF THE AGREEMENT DATED 21-4-1993 THROUGH WHICH THE ASSESSE E MADE INVESTMENT IN 16 FLATS. THE AO NOTED THAT THE ASSES SEE WAS TO MAKE INVESTMENT OF RS.64,03,201/- OUT OF WHICH INVESTME NT IS MADE IN RS.41,00,000/- AT THE TIME OF AGREEMENT AND THAT IT S AGREED THAT THE AMOUNT WOULD BE RETURNED WITHOUT ANY LOSS TO THE AS SESSEE. IT IS FURTHER NOTED BY THE AO THAT ALL TRANSACTIONS ARE STATED TO BE ROUTED IN CASH WITHOUT ANY BANKING CHANNEL. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE AS TO OUT OF WHICH SOURCES THE ASSESSEE MA DE DEPOSITS OF RS.41,00,000/- THROUGH THIS AGREEMENT. SHRI JASSHWA NT M. SHAH WAS ASKED TO PRODUCE THE EVIDENCE AS TO OUT OF WHICH SO URCES PAYMENT WAS MADE TO THE ASSESSEE. IT WAS EXPLAINED THAT HE HAD MADE INVESTMENTS IN RUSHABH SAFE DEPOSIT VAULT PVT. LTD. WHICH WAS SOLD IN THE MONTH OF OCTOBER, 1998 AND THE PAYMENT OF RS.20,00,000/- WAS RECEIVED. FOR THE REMAINING AMOUNT, NO EVIDENCE IS PRODUCED TO SUBSTA NTIATE ANY PAYMENT. THE AO ON PERUSAL OF THE COPY OF THE ACCOU NTS OF RUSHABH SAFE ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 4 DEPOSIT VAULT PVT. LTD. NOTED THAT EVEN RS.20,00,00 0/- IS TRANSFERRED ON THE NEXT DAY TO SOME OTHER ACCOUNTS AND PAY ORDER W AS MADE OF THE REMAINING AMOUNT. SHRI JASHWANT M. SHAH COULD NOT P RODUCE ANY EVIDENCE TO SHOW ANY AMOUNT WAS WITHDRAWN OUT OF TH E AFORESAID ACCOUNT. THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS.22,49,000/- FORM 12-09-2000 TO 22-03-2001 AND RS.18,00,000/- FROM 23 -05-2001 TO 12-03-2002. HOWEVER, NO PROOF OF AVAILABILITY OF SU CH CASH WITH SHRI JASHWANT M. SHAH WAS PRODUCED AT ANY POINT OF TIME. THE AO CONSIDERING THE ABOVE FACTS NOTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE THAT HE HAS INVESTED RS.41,00, 000/- WITH SHRI JASHWANT M. SHAH. SHRI JASHWANT M. SHAH HAS ALSO NO T BEEN ABLE TO PROVE THAT SAID CASH WAS WITH HIM FOR REPAYMENT. TH E STORY MADE UP BY THE ASSESSEE WAS THUS HELD NOT TO BE PROVED THROUGH ANY RELIABLE EVIDENCE. THE CONTENTION OF THE ASSESSEE WAS NOT AC CEPTED BY THE AO BECAUSE OF THE FOLLOWING SUMMARIZED REASONS: 1. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE AS T O OUT OF WHICH SOURCE SUM OF RS.41,00,000/- WAS PAID BEFORE 21.04.1993 TO SHRI JASHWANT M. SHAH. 2. THE ENTIRE AMOUNT IS STATED TO HAVE BEEN PAID I N CASH. 3. SHRI JASHWANT M. SHAH COULD NOT PRODUCE ANY EV IDENCE THAT THE CASH OF RS.41,00,000/- WAS RECEIVED BY HI M AND SHOWN IN THE BALANCE SHEET FOR RELEVANT YEAR. 4. THE SAID AMOUNT WAS NOT SHOWN BY SHRI JASHWANT M. SHAH IN HIS BALANCE SHEET HELD ALONG WITH THE RETURN OF INCOME. 5. SHRI JASHWANT M. SHAH COULD NOT PRODUCE ANY EVID ENCE REGARDING THE SOURCE OF MONEY OUT OF WHICH THE SAID AMOUNT IS REPAID TO SHRI PRAFUL J. SHAH I.E. THE AVAILABIL ITY OF CASH ON THE SAID DATE. 6. NONE OF THE TRANSACTIONS WERE ROUTED THROUGH TH E BANK. ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 5 IN VIEW OF THE ABOVE, THE INVESTMENT MADE BY THE AS SESSEE FOR PURCHASE OF NSCS AND KVPS WAS TREATED AS INVESTMENT OUT OF U NDISCLOSED SOURCES AND ADDITIONS WERE ACCORDINGLY MADE OF RS.22,49,000 /- AND RS.18,00,000/- IN BOTH THE ASSESSMENT YEARS. 4. THE ASSESSEE REITERATED THE SUBMISSIONS BEFORE T HE LEANED CIT(A) AND SUBMITTED THAT THOUGH THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE NOT AVAILABLE FOR SHOWING AVAILABILITY AND PAYMENT OF CASH AS CLAIMED, BUT IT WAS SUPPORTED BY THE AGREEMENT DATED 21-4-19 93 DULY NOTARIZED. IT WAS FURTHER SUBMITTED THAT SHRI JASHWANT M. SHAH RETURNED THE AMOUNT IN SUBSEQUENT YEAR WHICH IS DULY SUPPORTED B Y HIS BALANCE SHEET AND OTHER DOCUMENTS AVAILABLE ON RECORD. 5. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, OBSERVATIONS OF THE AO AND MATERIAL ON RECORD CONFI RMED THE ADDITIONS IN BOTH THE ASSESSMENT YEARS AND DISMISSED THE APPEALS OF THE ASSESSEE. THE FINDINGS OF THE LEARNED CIT(A) IN PARA 7 TO 11 IN THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: 7. I HAVE CAREFULLY EXAMINED THE FACTS OF THE CASE AND THE RIVAL CONTENTIONS. IN MY OPINION, THE ASSESSING OFF ICER IS RIGHT THAT NO EVIDENCE IS PRODUCED FOR THE AVAILABILITY O F MONEY WITH ASSESSEE BEFORE APRIL, 1993 AND THERE IS NO EVIDENC E PRODUCED FOR RECEIPT OF MONEY BY SHRI JASVANTLAL M. SHAH BEFORE 21.4.1993. THE AGREEMENT DATED 21.4.1993 TAK ES NOTICE OF THAT TRANSACTION. BUT THE POINT IS THAT T HE GENUINENESS OF TRANSACTION CANNOT BE SUPPORTED MERE LY ON THE BASIS OF SUCH AGREEMENT. FURTHER, AT THE TIME OF AL LEGED REPAYMENT THE AVAILABILITY OF MONEY WITH WHICH SHRI JASVANTLAL M.SHAH HAS NOT BEEN PROVED BECAUSE THE ASSESSING OFFICER HAS POINTED OUT THAT THE CLAIM OF RECEIPT OF MONEY BY SHRI JASVANTLAL M. SHAH FROM RUSHABH SAFE DEPOSIT VAULT PVT. LTD. IS NOT PROVED. 8. THUS, HERE IS A CASE IN WHICH ASSESSEE IS INVOLV ED IN REALLY BIG BUSINESS AND IN THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS IN JULY, 2003 WHEN FOUND TO BE OWNER OF NSC ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 6 AND KVP BOUGHT IN THE F. YS. 2001-02 AND 2002-03 CL AIMS THAT BEFORE APRIL 1993 (THE PERIOD OF FALLING BEFOR E THE ASSESSMENT YEARS FOR WHICH ACTION CAN BE TAKEN FOR TAXING) HE HAD PAID RS.41 LACS FOR BOOKING 16 FLATS. THERE IS NO EVIDENCE OF MONEY BEING AVAILABLE WITH THE APPELLANT THEN TH ERE IS NO EVIDENCE OF RECEIPT OF MONEY BY SHRI JASVANTLAL M. SHAH. NO ACCOUNT BOOKS ARE PRODUCED EITHER BY THE PAYER OR B Y THE PAYEE FOR SHOWING THOSE TRANSACTION OF 1992 & 1993. THE SAID SHRI JASVANTWAL M. SHAH IS NO DOUBT A BUILDER BUT H IS ASSESSMENTS HAVE BEEN MADE ON NET PROFIT OF 8% U/S 44AD. THERE IS NO RELIABLE EVIDENCE TO SHOW THAT ANY SUCH PROJECT WAS APPROVED BY THE AUTHORITIES CONCERNED AND IT IS ALMOST UNBELIEVABLE THAT A HARDCORE BUSINESSMAN LIKE APPEL LANT WOULD PAY RS.41 LACS BEFORE APRIL, 1993 AND TAKE AB SOLUTELY NO ACTION FOR RECOVERY OF THE SAME FOR MORE THAN 7 YEARS; ALL THE TRANSACTIONS ARE REPORTED TO BE IN CASH. 9. THERE ARE TWO DECISION OF THE SUPREME COURT WHIC H GOES TO SUPPORT THE DEPARTMENTS CASE. IN CIT V. DURGA P RASAD MORE 72ITR 807 THE APPELLANT HAD TRIED TO SUPPORT H IS CASE ON THE BASIS OF CERTAIN RECITALS IN SOME TRUST DEED ET C. THOUGH AFTER TAKING INTO ACCOUNT THE TOTALITY THE OUTCOME DID NOT APPEAR TO BE PROBABLE. THE SUPREME COURT HELD THAT THE INCOME-TAX DEPARTMENT WAS NOT BOUND TO ACCEPT SUCH SELF- SERVING STATEMENTS AND THEY CAN FIND OUT THE REALIT Y OF THE SITUATION. 10. IN SUMATI DAYAL V. CIT (1995) 214 ITR 802 (SC) FOR EXPLAINING AVAILABILITY OF MONEY WITH HER SHE CLAIM ED THAT SHE HAD OWN MONEY JACKPOTS IN THE HORSE-RACE AND IN SUP PORT OF THAT CLAIM PRODUCED DOCUMENTARY EVIDENCE LIKE CERTI FICATES FOR WINNING THE JACKPOT AND RECEIPT OF CHEQUES ETC. THE SUPREME COURT HELD THAT LOOKING TO THE PROBABILITY OF HUMAN CONDUCT IT WAS NOT POSSIBLE TO ACCEPT THE APPELLANTS CLAIM. T HIS WAS SO HELD IN SPITE OF THE EXISTENCE OF SO-CALLED FOOLPRO OF DOCUMENTARY EVIDENCE OF THE EXISTENCE OF JACKPOT WI NNINGS. 11. AS STATED EARLIER, THE CONTENTIONS PUT UP BY AP PELLANT HAVE NO FORCE, IN CONSIDERATION OF FACTS OF THE CAS E DISCUSSED HEREINABOVE. HENCE, THE FIRST GROUND OF APPEAL FOR BOTH THE YEARS IS DISMISSED AND ADDITIONS OF RS.22,49,000 AN D RS.18,00,000 RESPECTIVELY ARE CONFIRMED . 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE ASSESSEE FILED ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 7 CONFIRMATION FROM THE PROPRIETOR OF M/S. SHANTI NAG AR, SHRI JASHWANT M. SHAH ALONG WITH COPY OF THE AGREEMENT EXECUTED WITH HIM. SHRI JASHWANT M. SHAH IS ALSO PRODUCED BEFORE THE AO AND HE WAS EXAMINED ON OATH U/S 131 OF THE INCOME TAX ACT IN WHICH HE H AS CONFIRMED TO HAVE GIVEN RS.41,00,000/- TO THE ASSESSEE ON ACCOUN T OF RETURN OF THE AMOUNT FOR BOOKING OF 16 FLATS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT COPY OF INCOME TAX RETURN, COMPUTATI ON OF INCOME AND BALANCE SHEET OF SHRI JASHWANT M. SHAH FOR VARIOUS YEARS WERE PRODUCED BEFORE THE AO ALONG WITH COPY OF THE AGREEMENT OF R USHABH SAFE DEPOSIT VAULT PVT. LTD. AND OTHER AGREEMENTS TO PROVE THAT SHRI JASHWANT M. SHAH HAS THE SOURCE TO RETURN THE AMOUNT TO THE ASS ESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E PRODUCED SUFFICIENT MATERIAL BEFORE THE AO TO SHOW THAT THE ASSESSEE RE CEI0VED GENUINE AMOUNT FROM SHRI JASHWANT M. SHAH. THEREFORE, THE A SSESSEE DISCHARGED INITIAL ONUS TO PROVE THE SOURCE OF INVESTMENT IN N SCS AND KVPS. HE HAS SUBMITTED THAT THE ASSESSEE HAS PRODUCED THE ENTIRE EVIDENCE BEFORE THE AO AND THAT EVIDENCE ON RECORD IS SUFFICIENT TO DIS CHARGE THE ONUS OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION HE HAS RELIE D UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V S PRAGATI CO-OPERATIVE BANK LTD. 278 ITR 170 (GUJ) IN WHICH IT WAS HELD AS UNDER: HELD , THAT IT WAS APPARENT THAT THE ASSESSEE HAD FURNIS HED THE DETAILS WHICH WOULD DISCHARGE THE ONUS WHICH LA Y ON THE ASSESSEE CONSIDERING THE FACT THAT THE DEPOSITS WER E MADE BY THIRD PARTIES, VIZ. CUSTOMERS OF THE BANK. IT WAS N OBODYS CASE THAT THE DEPOSITS WERE MADE EITHER BY THE DIRECTORS OF THE ASSESSEE-BANK OR ANY OF THE RELATIVES OF THE DIRECT ORS. THE ACTIVITIES OF THE ASSESSEE-BANK WERE REGULATED BY T HE PROVISIONS OF THE BANKING REGULATION ACT, 1949, AND THE GUIDELINES ISSUED BY THE RESERVE BANK OF INDIA. THI S WAS APART FROM THE FACT THAT UNDER THE PROVISIONS OF SE CTION 80P OF THE ACT THE ENTIRE INCOME FROM BANKING ACTIVITIES W AS EXEMPT IN THE HANDS OF THE ASSESSEE, A CO-OPERATIVE BANK. THUS THERE COULD EXIST NO REASON FOR THE ASSESSEE-BANK TO INDU LGE IN ANY ACTIVITY WHICH WOULD YIELD UNDISCLOSED INCOME. THE TRIBUNAL ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 8 WAS RIGHT IN DELETING THE ADDITION OF RS.1,80,95,81 1 IN RESPECT OF FIXED DEPOSITS AND RS.21,71,,500 IN RESPECT OF T HE INTEREST. AS WELL AS DECISION IN THE CASE OF MURLIDHAR LAHORI MAL VS CIT 280 ITR 512 IN WHICH IT WAS HELD AS UNDER: : HELD , THAT THE TRIBUNAL FAILED TO NOTE THE FACT THAT TH E IDENTITY OF THE DONOR WAS ESTABLISHED, THE DONOR HAVING APPE ARED IN PERSON BEFORE THE ASSESSING OFFICER, THE GENUINENES S OF THE TRANSACTIONS WAS ESTABLISHED, NOT ONLY BY THE RECEI PT OF TH8E BANK DRAFT, BUT ALSO BY THE FACT OF THE TRANSACTION S HAVING BORNE GIFT TAX ONCE THE ASSESSMENT WAS FRAMED. THE PRIMARY ONUS WHICH RESTED WITH THE ASSESSEE, THUS, STOOD DI SCHARGED. THEREAFTER, IF THE REVENUE WAS NOT SATISFIED WITH T HE SOURCE OF THE FUNDS IN THE HANDS OF THE DONOR, IT WAS UP TO T HE REVENUE TO TAKE APPROPRIATE ACTION. THE TRIBUNAL CONSIDERED THE MOTIVATION FOR MAKING THE GIFT WHICH WAS NOT RELEVA NT. THE ADDITION OF RS.50,000 WAS NOT JUSTIFIED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE SEVERAL PAGES FROM THE PAPER BOOK TO SHOW SEVERAL SALE DEEDS EXEC UTED BETWEEN SHRI JASHWANT M. SHAH AND OTHER FOR AVAILABILITY OF THE FUNDS WITH HIM. 8. ON THE OTHER HAND, LEARNED DR STRONGLY RELIED UP ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESS EE AS WELL AS SHRI JASHWANT M. SHAH DID NOT PRODUCE ANY BOOKS OF ACCOU NT OR ANY MATERIAL REGARDING RECEIPT OF RS.41,00,000/-IN THE YEARS 199 2 TO 1994. HE HAS SUBMITTED THAT NO SOURCE OF PAYMENT OF RS.41,00,000 /- BY ASSESSEE FOR BOOKING OF THE FLATS IS PRODUCED. SIMILARLY, SHRI J ASHWANT M. SHAH DID NOT PRODUCE ANY EVIDENCE OF SOURCES TO REPAY THE AM OUNT TO THE ASSESSEE IN THE SUBSEQUENT YEARS. THE LEARNED DR SUBMITTED T HAT THE MATERIAL FILED ON RECORD SHOWS THAT THERE WAS EVEN DIFFERENC E REGARDING BOOKING AMOUNT BECAUSE AT PAPER BOOK PAGE 23 WHICH IS ALLEG ED BALANCE SHEET AS ON 31-03-2000, THE BOOKING AMOUNT IS ONLY SHOWN AT RS.40,49,000/-, BUT CLAIMED THE AMOUNT OF RS.41,00,000/-. THE LEARN ED DR SUBMITTED THAT NO CORROBORATING EVIDENCE IS PRODUCED TO HAVE ANY CO-RELATION BETWEEN THE INVESTMENT IN KVPS AND NSCS THROUGH CAS H AMOUNT ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 9 RECEIVED FROM SHRI JASHWANT M. SHAH. THE LEARNED DR FURTHER SUBMITTED THAT THERE IS VAST DIFFERENCE BETWEEN THE RECEIPT O F THE CASH AMOUNT AND THE INVESTMENTS MADE IN KVPS AND NSCS. HE HAS SUBMI TTED THAT SHRI JASHWANT M. SHAH FILED RETURN OF INCOME OF MEAGER A MOUNT U/S 44AD OF THE INCOME TAX ACT ONLY WHICH SHOWS THAT HE HAS NO CAPACITY TO MAKE PAYMENT OF RS.41,00,000/-. HE HAS ALSO SUBMITTED TH AT SHRI JASHWANT M. SHAH NEVER PRODUCED ANY DETAILED BALANCE SHEET B EFO3RE THE AUTHORITIES BELOW BECAUSE ONLY ONE LINE BALANCE SHE ET IS PRODUCED WHICH DOES NOT SHOW THE SOURCE AND CAPACITY OF SHRI JASHW ANT M. SHAH TO RECEIVE OR TO REPAY THE AMOUNT OF RS.41,00,000/-. T HE LEARNED DR SUBMITTED THAT THE AUTHORITIES BELOW CONSIDERING TH E SURROUNDING CIRCUMSTANCES AND BY APPLYING THE TEST OF HUMAN PRO BABILITIES CORRECTLY MADE THE ADDITIONS IN THE CASE OF THE ASSESSEE BECA USE THE SOURCE OF INVESTMENT IN NSCS AND KVPS HAVE NOT BEEN EXPLAINED AND PROVED THROUGH RELIABLE AND COGENT EVIDENCE. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDERS OF THE AUTHORITIES BELOW. THE LEA RNED DR, THEREFORE, SUBMITTED THAT THE APPEALS OF THE ASSESSEE MAY BE D ISMISSED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE C OULD NOT PRODUCE ANY EVIDENCE AS TO OUT OF WHICH SOURCE THE SUM OF RS.41 ,00,000/- WAS PAID BEFORE 21-4-1993 TO SHRI JASHWANT M. SHAH. IT IS AL SO NOT IN DISPUTE THAT THE ENTIRE TRANSACTIONS OF RECEIPT OF MONEY AND REP AYMENT OF MONEY ARE MADE IN CASH FOR WHICH NO SUPPORTING EVIDENCE IS AL SO PRODUCED. IT IS ALSO NOT IN DISPUTE THAT SHRI JASHWANT M. SHAH COUL D NOT PRODUCE ANY EVIDENCE THAT CASH OF RS.41,00,000/- WAS RECEIVED B Y HIM AND SHOWN IN THE BALANCE SHEET FOR THE RELEVANT ASSESSMENT YEARS BECAUSE NO BOOKS OF ACCOUNTS ARE PRODUCED EITHER BY THE ASSESSEE OR BY SHRI JASHWANT M. SHAH FOR SHOWING THOSE TRANSACTIONS IN THE YEARS 19 92, 1993 AND 1994. SHRI JASHWANT M. SHAH HAS FILED RETURN OF INCOME FO R HIS ASSESSMENT ON THE BASIS OF PROFIT WORKED OUT U/S 44AD OF THE INCO ME TAX ACT; IT WOULD ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 10 SHOW THAT HIS TURNOVER WAS NOT SUBSTANTIAL. NO COMP LETE BALANCE IS ALSO PRODUCED TO SHOW THE STATE OF AFFAIRS OF THE BUSINE SS OF SHRI JASHWANT M. SHAH. NO RELIABLE EVIDENCE IS ALSO PRODUCED AS TO W HY THE SUBSTANTIAL AMOUNT OF RS.41,00,000/- GIVEN SEVERAL YEARS BACK W AS KEPT IN CASH AND WHY IT WAS RETURNED IN CASH WITHOUT PAYMENT OF ANY DAMAGES OR INTEREST TO THE ASSESSEE. AGAIN, THE REPAYMENT AFTER SEVERAL YEARS IS CONDUCTED THROUGH CASH. NO EVIDENCE IS ALSO PRODUCED REGARDIN G SIURCE OUT OF WHICH SHRI JASHWANT M. SHAH REPAID TO THE ASSESSEE IN CAS H. THE ASSESSEE HOWEVER, PRODUCED SOME MATERIAL IN THE SHAPE OF SAL E DEEDS TO SHOW THAT CASH IS GENERATED WITH SHRI JASHWANT M. SHAH, HOWEV ER, THE SAID DID NOT CO-RELATE WITH THE RETURN OF THE AMOUNT TO THE ASSE SSEE ALONG WITH INVESTMENT MADE IN NSCS AND KVPS. THE AO SPECIFICAL LY RECORDED IN THE ASSESSMENT ORDER THAT SHRI JASHWANT M. SHAH SUBMITT ED THAT HE HAD MADE INVESTMENT IN RUSHABH SAFE DEPOSIT VAULT PVT. LTD. AND PAYMENT OF RS.20,00,000/- IS RECEIVED ON 06-10-2998. BUT TH E AO NOTED THAT THE SAID AMOUNT IS TRANSFERRED ON THE NEXT DAY TO SOME OTHER ACCOUNTS AND PAY ORDER IS MADE FOR THE REMAINING AMOUNT AND NO E VIDENCE IS PRODUCED TO SHOW IF SHRI JASHWANT M. SHAH WITHDRAWN ANY AMOU NT OUT OF THE SAID ACCOUNTS. SUCH FINDINGS OF THE AO ARE NOT REBUTTED THROUGH ANY MATERIAL ON RECORD. THE ABOVE FACTS AND CIRCUMSTANCES CONSID ERED BY THE AUTHORITIES BELOW CLEARLY PROVE THAT THERE IS A GRA VE DOUBT IN THE STORY PROPOUNDED BY THE ASSESSEE BEFORE THE AUTHORITIES B ELOW. NONE OF THE MATERIAL PRODUCED BEFORE THE AUTHORITIES BELOW WAS SUFFICIENT TO EXPLAIN ANY PAYMENT TO SHRI JASHWANT M. SHAH OR RETURN OF P AYMENT TO THE ASSESSEE AFTER SEVERAL YEARS IN CASH. THEREFORE, NO RELIABLE AND COGENT EVIDENCE IS AVAILABLE ON RECORD TO PROVE THE SOURCE OF INVESTMENT IN NSCS AND KVPS. THE FINDING GIVEN BY THE AO SPECIFICALLY ON THIS ISSUE ON THE STORY PROPOUNDED BY THE ASSESSEE BEFORE HIM IS THUS NOT REBUTTED THROUGH ANY COGENT AND RELIABLE EVIDENCE ON RECORD. THE ITAT DELHI BENCH IN THE CASE OF DCIT VS SMT. PHOOLWATI DEVI RE PORTED IN (2009) 314 ITR (AT) 1 (DELHI)HELD DESPITE DOCUMENTATION SUPPO RTING THE CLAIM OF THE ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 11 ASSESSEE SUPERFICIALLY, THE EVIDENCE CANNOT BE ACCE PTED IN VIEW OF THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. THEREFORE, IT CANNOT BE HELD THAT THE ASSESSEE HAD TAKEN GENUINE LOAN. AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLY ING TEST OF HUMAN PROBABILITIES AS PRONOUNCED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS DURGA PRASAD MORE 72 ITR 807 (SC) AND IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214ITR 801 (SC), WE ARE OF THE VIEW THAT THERE IS NO FACTUAL ERROR IN THE FINDINGS OF THE AUTHORITIES BE LOW IN MAKING BOTH THE ADDITIONS AGAINST THE ASSESSEE. WE, THEREFORE, DO N OT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. CONSIDERING THE FACTS AND CIRCUMSTANCES AND THE FIN DINGS GIVEN ABOVE IN THIS ORDER, IT IS CLEAR THAT THE DECISION RELIED UP ON BY THE LEARNED COUNSEL FOR THE ASSESSEE AS ABOVE, IN SUPPORT OF HIS CONTEN TIONS ARE CLEARLY DISTINGUISHABLE ON FACTS. 10. IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FIN D ANY INFIRMITY IN THE ORDERS OF THE LEARNED CIT(A). WE CONFIRM HIS FI NDINGS AND DISMISS THE APPEALS OF THE ASSESSEE. 11. AS A RESULT, BOTH THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-12-2009 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 18-12-2009 LAKSHMIKANT/- ITA NO. 2795 AND 2796/AHD/2006 PRAFULBHAI @ ROHITBHAI J. SHAH 12 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD