The ITO, Ward-4(4), Ahmedabad V. Maidan Tradefin Pvt. Ltd., Ahmedabad

ITA 323/AHD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6328 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 07-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIL K SHAH
• Assessee Lawyers: T P KRISHNA KUMAR
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM & ANIL CHATURVEDI, AM IT(SS) A NO.323/AHD/2011 BLOCK ASST. PERIOD 1991-92 TO 2000-01 UPTO 22/11/20 00 .SHRI NARENDRA H. CHOKSI, 13/332, 2 ND FLOOR, MATRU ASHISH APARTMENT, OPP. SMC PARTY PLOT, ATHWALINES, SURAT-395 007. VS DY. CIT, CEN. CIR.I, SURAT. (APPELLANT) (RESPONDENT) PA NO. APPELLANT BY SHRI ANIL K. SHAH, AR RESPONDENT BY SHRI T.P. KRISHNA KUMAR, CIT,DR DATE OF HEARING: 28/5/2015 DATE OF PRONOUNCEMENT: 5/6/2015 O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT(A) DATED 9/11/2010 PASSED FOR THE BLOCK PERIOD STARTING FROM AY 1991-92 AND ENDING ON 22 ND NOVEMBER, 2000. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CON FIRMING ADDITION OF RS.4,00,000/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF BUFFALOS. IT(SS)A NO.323/AHD/2011 BLOCK PERIOD 1991-92 TO 2000-01 UPTO 22/11/2000 2 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL/BUSINESS PREMISE S OF THE ASSESSEE ON 22.11.2000. DURING THE COURSE OF SEARCH LOOSE PA PERS WERE FOUND AND INVENTORIZED AS BS-1. IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS LD. AO HAD ISSUED NOTICE UNDER SECTION 158BC OF THE ACT, INVITING THE BLOCK RETURN FROM THE ASSESSEE. T HE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 16.10.2002 DISCLOSING INCOME AT RS.16,000/-. AFTER HEARING THE ASSESSEE THE LD. AO HAS PASSED THE ASSESSMENT ORDER ON 29.11.2002. HE DETERMINED THE U NDISCLOSED INCOME OF THE ASSESSEE AT RS.4,16,000/-. IT IS A VE RY BRIEF ASSESSMENT ORDER. THE ADDITION OF RS.4,00,000/- HAS BEEN MADE IN THE INCOME OF THE ASSESSEE AND THE DISCUSSION WITH REGARD TO THIS IS AVAILABLE IN PARAGRAPH 5 OF THE IMPUGNED ASSESSMENT ORDER. IT RE ADS AS UNDER :- 5. DURING THE COURSE OF SEARCH, PAGE 1 TO 17 OF B S-1 SEIZED FROM THE RESIDENCE OF THE ASSESSEE, WAS FOUND TO CONTAIN DETAILS OF PURCHASE OF BUFFALOS. THUS, VIDE PARA 6 OF LETTER D ATED 14/11/2002, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THI S EXPENDITURE. IN RESPONSE TO IT, THE ASSESSEE HAS CLAIMED THAT THE S AID BUFFALOS HAVE BEEN PURCHASED FROM LOAN TAKEN FROM A BANK. HOWEVER , THE ASSESSEE HAS NOT EVEN ABLE TO PRODUCE EVIDENCE IN SUPPORT OF HIS CLAIM. VIDE ORDER SHEET DATED 25/11/2002 THE ASSESSEE WAS PROVI DED ONE MORE OPPORTUNITY TO EXPLAIN THE SOURCE OF THIS INVESTMEN T AND PRODUCE DETAILS. HOWEVER, THE ASSESSEE FAILED TO PRODUCE AN Y DETAILS. THUS THE SOURCE OF THIS INVESTMENT OF RS.400,000 REMAINS UNEXPLAINED. IT(SS)A NO.323/AHD/2011 BLOCK PERIOD 1991-92 TO 2000-01 UPTO 22/11/2000 3 THERE IS, THEREFORE, NO OPTION BUT TO ASSESS RS.400 ,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. SHRI NARENDRA H . CHOKSI IS THE HEAD OF THE FAMILY, THEREFORE, THE ADDITION IS MADE IN HIS HANDS. 3. ON APPEAL, THE CIT(A) HAS CONFIRMED THIS ADDITIO N BY OBSERVING AS UNDER :- 5. I HAVE CONSIDERED THE FACTS AND THE SUBMISSION S. I DO NOT AGREE WITH THE APPELLANTS VIEWS. THE LOAN WAS OBTAINED F ROM BANK AND IT CAME TO THE APPELLANTS ACCOUNT ON 11/10/1999 WHERE AS THE BUFFALOS WERE PURCHASED ON 31.07.1999 AND ALSO THE CAPITAL A CCOUNT SHOWS THAT THE INVESTMENT WAS BROUGHT AS CAPITAL IN THE F IRM ON 31.07.1999 WHICH IS A DATE PRIOR TO THE DATE OF OBTAINING THE LOAN. HENCE, THE INVESTMENT REMAINS UNEXPLAINED AND THE ASSESSING OF FICER WAS JUSTIFIED IN MAKING THE ADDITION WHICH IS UPHELD. 4. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE CASE OF THE ASSES SEE IS THAT HIS SON SHRI HIMANSHU CHOKSI HAD FORMED A PARTNERSHIP FIRM ALONG WITH DASHRATH DESAI, SON OF MAGANBHAI DESAI, IN THE NAME AND STYLE OF KRISHNA DAIRY. SHRI MAGANBHAI C. DESAI WAS IN THE D AIRY BUSINESS AND HAD KNOWLEDGE OF BREEDS AND GOOD BUFFALOS. THEY REQUESTED HIM FOR ARRANGEMENT OF THE BUFFALOS IN THE PARTNERSHIP FIRM. SHRI MAGANBHAI C. DESAI HAD ARRANGED 41 BUFFALOS ON 31 ST JULY, 1999 AT AN AGREED PRICE OF RS.8 LAKHS. THE ASSESSEE HAD GIV EN A CHEQUE OF RS.4 LAKH TO HIS SON HIMANSHU CHOKSI WHO DEPOSITED THE SAME IN THE IT(SS)A NO.323/AHD/2011 BLOCK PERIOD 1991-92 TO 2000-01 UPTO 22/11/2000 4 PARTNERSHIP FIRM AND ULTIMATELY PAID TO SHRI MAGANB HAI DESAI. ACCORDING TO THE ASSESSEE A LOAN OF RS.10 LAKHS WAS TAKEN FROM SARVODAY BANK AND OUT OF THAT RS.4 LAKHS WERE GIVEN TO SHRI HIMANSHU CHOKSI. THE CHEQUES ISSUED TO SHRI MAGANBH AI DESAI ARE BEARING NOS.523069 DATED 12.10.99, UCO BANK FOR A S UM OF RS.5 LAKHS AND 523070 DATED 13.10.99 UCO BANK FOR A SUM OF RS.3 LAKHS. SHRI MAGANBHAI DESAI GAVE A CONFIRMATION. THE ASSES SEE PRODUCED THE CONFIRMATION OF SHRI MAGANBHAI DESAI BEFORE THE AO, COPY OF HIS RETURN OF INCOME. SHRI HIMANSHU CHOKSI HAS ALSO CON FIRMED THIS TRANSACTION DURING HIS STATEMENT RECORDED UNDER SEC TION 132(4) ON THE DATE OF SEARCH. A SPECIFIC REPLY WAS GIVEN IN R ESPONSE TO QUESTION NO.3. BOTH THE REVENUE AUTHORITIES HAVE DISBELIEVED THE CONTENTIONS OF THE ASSESSEE SIMPLY FOR THE REASON THAT BUFFALOS WERE PURCHASED IN THE MONTH OF JULY WHEREAS LOAN FROM THE SARVODAY BA NK WAS CREDITED TO THE ACCOUNT OF ASSESSEE ON 11/10/99. THEY FAILED TO APPRECIATE THAT BUFFALOS WERE PURCHASED IN THE MONTH OF JULY F ROM SHRI MAGANBHAI DESAI. HIS SON HAPPENS TO BE THE PARTNER IN THE FIRM WITH THE SON OF ASSESSEE. HE HAS EXTENDED THE CREDIT OF RS.4 LAKHS TOWARDS THE FIRM WHICH HAS BEEN DISCHARGED AFTER TH E LOAN WAS IT(SS)A NO.323/AHD/2011 BLOCK PERIOD 1991-92 TO 2000-01 UPTO 22/11/2000 5 AVAILED FROM THE BANK. TO OUR MIND THE ASSESSEE HA S DULY EXPLAINED THE SOURCE OF THIS INVESTMENT. 5. AFTER TAKING INTO CONSIDERATION THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SEARCH AS WELL AS THE STATEMENT OF HIS SON ALONG WITH OTHER DETAILS IN THE SHAPE OF BANK S TATEMENT, CONFIRMATION FROM SHRI MAGANBHAI DESAI, COPY OF HIS INCOME-TAX RETURN, WE ARE SATISFIED THAT ASSESSEE HAS ESTABLIS HED THE SOURCE OF INVESTMENT AND NO ADDITION IS CALLED FOR. WE ALLOW THE APPEAL OF ASSESSEE AND DELETE THE ADDITION OF RS.4 LAKHS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5/6/2015 SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER DATED _05/06/2015 MAHATA/- IT(SS)A NO.323/AHD/2011 BLOCK PERIOD 1991-92 TO 2000-01 UPTO 22/11/2000 6 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 DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 28/5/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 28/5/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 5/6/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: