The ITO, Ward-9(2), Ahmedabad V. Shri Mukesh H. Patel, Ahmedabad

ITA 364/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94757 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PILBINUS TIRKEY
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Unexplained expenditure; Business income; Opportunity of being heard; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence; Difference of opinion; Corroborative evidences
• Section: 44AD; 69C; 142(1); 133(6); 69; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, MANISH BORAD, AM. ITA NO.358/AHD/2011 ASST. YEAR 2007-08 SHRI MUKESHBHAI HARJIBHAI PATEL, 9, MALHAR BUNGLOWS, OPP. KALHAR BUNGLOWS, SHILAJ, TALUKA-KALOL. VS INCOME-TAX OFFICER, WARD 9(2), AHMEDABAD. (APPELLANT) (RESPONDENT) PA NO.ABVPP 9561H AND ITA NO.364/AHD/2011 ASST. YEAR 2007-08 INCOME-TAX OFFICER, WARD 9(2), AHMEDABAD. VS SHRI MUKESHBHAI HARJIBHAI PATEL, 9, MALHAR BUNGLOWS, OPP. KALHAR BUNGLOWS, SHILAJ, TALUKA-KALOL. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI S. N. DIVETIA, AR REVENUE BY SHRI PILBINUS TIRKEY, SR.DR DATE OF HEARING: 3/9/2015 DATE OF PRONOUNCEMENT:01/12/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THESE ARE TWO CROSS APPEALS ONE BY THE ASSESSEE ( ITA NO.358/AHD/2011) AND THE OTHER BY THE REVENUE (ITA ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 2 NO.364/AHD/2011) AGAINST THE ORDER OF CIT(A) XV, AH MEDABAD, DATED 8 TH DECEMBER, 2010 IN APPEAL NO.CIT(A)-XV/9(2)/349/09- 10. ASSESSMENT FOR ASST. YEAR 2007-08 WAS FRAMED U/S 14 3(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) BY THE INCO ME-TAX OFFICER, WARD 9(2), AHMEDABAD ON 29/12/2009. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE WHO IS ENGAG ED IN THE BUSINESS AS CONTRACTOR FOR CIVIL CONSTRUCTION AS WE LL AS PURCHASE/SALE OF LAND UNDER THE SOLE PROPRIETORSHIP CONCERN M/S G HANSHYAM BUILDER, FILED HIS RETURN OF INCOME ON 31.10.2007 D ECLARING TOTAL INCOME AT RS.8,42,980/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 7/09/2008 WHICH WAS DULY SERVED UPON THE ASSESSEE. THEREAFTER NOTICE UNDER S ECTION 142(1) ALONG WITH DETAILED QUESTIONNAIRE WAS ISSUED AND IN RESPONSE TO THE NOTICES, THE LD. AR OF ASSESSEE ATTENDED FROM TIME TO TIME AND VARIOUS DETAILS/EVIDENCES WERE PLACED ON RECORD. TH E ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.96,64,230/-. TOTAL ADDITION OF RS.88,21,251/- WAS MADE BY ASSESSING OFFICER ON ACC OUNT OF FOLLOWING :- I) ADDITION U/S 69C RS.54,08,384/- II) ADDITION ON ACCOUNT OF CLOSING STOCK RS.10,52,8 91/- III) DISALLOWANCE OUT OF EXPENSES RS.15,32,726/- IV) ADDITION U/S 68 RS.8,27,250/- --------------------------- RS.88,21,251/- -------------------------- ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 3 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A) WHO PARTLY ALLOWED THE APPEAL BY SUSTAINING ADDITION UNDER SEC TION 69C AT RS.46,34,298/-, DELETED ADDITION ON ACCOUNT OF CLOS ING STOCK AT RS.10,52,891/-, RESTRICTED THE DISALLOWANCE OUT OF EXPENSES AT RS.16,45,052/- AND SUSTAINED THE ADDITION U/S 68 AT RS.8,27,250/-. 4. AGGRIEVED, NOW THE ASSESSEE AND THE REVENUE BOTH ARE IN APPEAL BEFORE THE TRIBUNAL. 5. WE FIRST TAKE UP THE APPEAL OF THE ASSESSEE IN I TA NO.358/AHD/2011 FOR ASST. YEAR 2007-08. FOLLOWING G ROUNDS HAVE BEEN RAISED IN THIS APPEAL :- (1) ADDITION OF RS.54,08,384/- (RUPEES FIFTY FOUR L AC. EIGHT THOUSANDS THREE HUNDRED & EIGHTY FOUR ONLY) U/S 69 (C) OF THE INCOME-TAX ACT, 1961 :- THE LD. CIT(A) XV HAS ERRED IN CONSIDERING THE FACT S & EVIDENCES PRODUCED BEFORE CIT(A) XV. THE ASSESSEE P RODUCED EVIDENCES OF LAND PURCHASE & OTHER EXPS. AMOUNTING TO RS.54,08,384 (RUPEES FIFTY FOUR LAC. EIGHT THOUSAND S THREE HUNDRED & EIGHTY FOUR). THE LD. CIT(A) XV HAS CONSI DERED SAMJUTI KARAR WHICH IS TRANSLATED FROM GUJARATI TO ENGLISH WHICH IS SUBMITTED TO SUPPORT AUDA FEES INSTEAD OF COMPRO MISE DEED WHICH IS REGISTERED WITH SUB-REGISTRAR OFFICE, KALOL DATED 10/1/2007 AND CONSTRUCTION EXPS.15,94,898/- (RUPEES FIFTEEN LACS. NINETY FOUR THOUSANDS EIGHT HUNDREDS & NINETY EIGHT ONLY) MENTIONING THAT NO LAND PURCHASE DEED & PURCHASE BI LLS & SUPPORTING EVIDENCE IS PRODUCED EVEN THOUGH ALL EVI DENCES ARE ON RECORD. (2) DISALLOWANCE OF EXPENDITURE OF RS.1,64,505/- (R UPEES ONE LACS SIXTY FOUR THOUSANDS FIVE HUNDRED & FIVE ONLY) WHIC H IS 10% OF ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 4 RS.16,45,052/- (RUPEES SIXTEEN LACS FORTY FIVE THOU SANDS & FIFTY TWO ONLY). THIS ADDITION IS MADE WITHOUT ANY BASE, SO THIS ADDITION IS REQUIRED TO BE DELETED. (3) ADDITION OF RS.8,27,250/- (RUPEES EIGHT LACS TW ENTY SEVEN THOUSANDS TWO HUNDREDS & FIFTY ONLY) U/S 68:- THIS ADDITION IS MADE AGAINST PRINCIPLE OF LAW. THE ADDITION IS UPHELD BY CIT(A) XV MENTIONING THAT IN THE BALANCE SHEET, THE NAME OF JOITARAM PRAJAPATI AGAINST RS.10,97,250/- ( RUPEES TEN LACS NINETY SEVEN THOUSANDS TWO HUNDREDS & FIFTY ON LY) IS MENTIONED BUT THE TRUE FACT THE AMOUNT OF RS.2,71,0 00/- (RUPEES TWO LACS & SEVENTY THOUSANDS ONLY) IS IN THE NAME O F JOITARAM PRAJAPATI, THE AMOUNT OF RS.5,57,250/- (FIVE LACS F IFTY SEVEN THOUSANDS TWO HUNDRED & FIFTY) APPEARS IN THE NAME OF OTHER PERSON IN BALANCE SHEET AS 31/3/2007 & IN BOOKS OF ACCOUNT. SO THE ADDITION OF RS.8,27,250/- (RUPEES EIGHT LACS TWENTY SEVEN THOUSANDS TWO HUNDREDS & FIFTY ONLY) BE DELET ED. (4) OTHER GROUNDS OF APPEAL SHALL BE SUBMITTED AT T HE TIME OF HEARING. 6. IN THE FIRST GROUND OF APPEAL RAISED BY THE ASSE SSEE THE AMOUNT OF ADDITION UNDER SECTION 69C IS MENTIONED AT RS.54 ,08,384/-. HOWEVER, AFTER GOING THROUGH THE ORDER OF LD. CIT(A ) WE FIND THAT LD. CIT(A) HAS ALREADY GIVEN RELIEF TO THE TUNE OF RS.7 ,73,348/- AND HAS RESTRICTED THE ADDITION TO RS.46,34,898/-. NO OBJEC TION WAS RAISED BY THE LD. AR AND AS SUCH THIS GROUND IS AMENDED TO TH E EFFECT THAT RS.54,08,384/- BE REPLACED BY ADDITION OF RS.46,34, 898/-. THE LD. AR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS ASSESSEE WAS ASKED TO FURNISH DETAILED WORKING OF V ALUATION OF CLOSING STOCK SHOWN IN THE TRADING ACCOUNT AT RS.61 ,24,300/- AND THE FOLLOWING DETAILS WERE SUBMITTED BEFORE THE ASSESSI NG OFFICER:- ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 5 PARTICULARS AMOUNT THE AMOUNT OF OPENING STOCK 2264367 ADD. PURCHASE/DEVELOPMENT COST DURING THE YEAR LAND & MATERIAL PURCHASE 3214898 ELECTRIC EXPENSE 378681 ENGINEERING FEES 226000 LABOUR EXPENSE 1420000 GARDEN EXPENSE 24405 CARTAGE EXPENSE 78400 SUPERVISION EXPENSE 66000 5408384 7672751 LESS: COST OF LAND SOLD 154845 CLOSING STOCK 6124300 THE ASSESSING OFFICER EXAMINED THE ABOVE SAID DETAI LS WITH THE TRADING ACCOUNT FURNISHED BY THE ASSESSEE. TRADING ACCOUNT FOR THE FINANCIAL YEAR 2006-07 WAS SHOWN AS BELOW :- OPENING STOCK 22,64,387.00 SALE 32,78,400.00 PURCHASE ACCOUNTS 32,14,898.40 CLOSING STOCK 61,24,300.00 GROSS PROFIT C/O 39,21,434.60 94,02,700.00 94,02,700.00 THE ASSESSING OFFICER OBSERVED THAT THE DETAILS SUB MITTED FOR VALUATION OF CLOSING STOCK AND THE TRADING ACCOUNT OF THE ASSESSEE WERE DIFFERENT BECAUSE IN THE PARTICULARS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS, VALUATION OF CLOSING STOCK WAS ARRIVED AT AFTER INCLUDING ELECTRIC EXPENSES AT RS.378681/-, E NGINEERING FEES AT ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 6 RS.226000/-, GARDEN EXPENSE AT RS.24,405/-, CARTAGE EXPENSES OF RS.78,400/-, SUPERVISION EXPENSES AT RS.66,000/- AN D LABOUR EXPENSES AT RS.14,20,000/- WHEREAS THESE ALL EXPENS ES WERE NOT FORMING PART OF THE TRADING ACCOUNT MEANT FOR ARRIV ING AT GROSS PROFIT. DUE TO THIS VARIATION IN THE TWO DETAILS, THE AMOUN T OF RS.54,08,384/- REFERRED ABOVE IN THE DETAIL OF VALUATION OF CLOSIN G STOCK AS ADDITION DURING THE YEAR WAS TREATED AS UNDISCLOSED EXPENDIT URE AND ACCORDINGLY ADDITION U/S 69C OF THE ACT WAS MADE. H OWEVER, LD. CIT(A) WHILE EXAMINING THE ISSUE, REVEALED THAT ASS ESSEE HAS SHOWN SOME PARTICULARS WHICH WERE HITHERTO REQUIRED TO BE SHOWN IN THE TRADING ACCOUNT WERE INADVERTENTLY SHOWN IN THE PRO FIT AND LOSS ACCOUNT AND THE SAME WERE VERIFIABLE FROM THE PROFI T AND LOSS ACCOUNT OF THE ASSESSEE AND ACCORDINGLY DELETED RS.7,73,486 /- OUT OF TOTAL ADDITION OF RS.54,08,384/- BY ACCEPTING THE CLAIM O F ASSESSEE THAT THESE EXPENSES WERE FORMING PART OF PROFIT AND LOSS ACCOUNT AND WERE DULY DISCLOSED IN THE FINANCIAL STATEMENT. THE DETA ILS OF ADDITION DELETED AT RS.7,73,486/- WERE ON ACCOUNT OF FOLLOWI NG EXPENSES WHICH WERE INCURRED FOR THE DEVELOPMENT OF LAND:- ELECTRIC EXPENSE RS.3,78,681/- ENGINEERING EXPENSE RS.2,26,000/- GARDEN EXPENSE RS.24,405/- CARTAGE EXPENSE RS.78,400/- SUPERVISION EXPENSE RS.66,000/- RS.7,73,486/- LD. CIT(A) DID NOT DELETE THE ADDITION OF REMAINING AMOUNT OF RS.46,35,298/- ON ACCOUNT OF LAND PURCHASE AT RS.32 ,14,898/- AND LABOUR EXPENSES OF RS.14,20,400/- BECAUSE NO DETAIL S WERE MADE ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 7 AVAILABLE BEFORE ASSESSING OFFICER AS WELL AS BEFOR E HIM AND FOLLOWING FINDING HAS BEEN GIVEN BY LD. CIT(A) UPHO LDING THE ADDITION OF RS.46,35,298/-. 11. OUT OF RS.54,08,784/- - RS.32,14,898/- THE BAL ANCE OF RS.21,93,486/- HAS BEEN INFORMED AS OTHER EXPENSE, OUT OF WHICH RS.14,20,400/- HAS BEEN DEBITED AS LABOUR EXPENSE I N THE P & L ACCOUNT. THE LABOUR EXPENSE WAS NOT FOUND VERIFIABL E BY THIS OFFICE AND THEREFORE VIDE THIS OFFICE NOTICE DATED 18.11.2 010 THE APPELLANT WAS INFORMED SO. IN RESPONSE VIDE REPLY DATED 23.11 .2010 IT WAS STATED THAT THE LABOUR EXPENSES HAVE BEEN INCURRED EXCLUSIVELY FOR BUSINESS PURPOSES AND ARE VERIFIABLE AND HAVE BEEN SUBMITTED VIDE ANNEXURE-C OF REPLY DATED 23.11.2010. IN THE REPLY THERE IS NO ANNEXURE-C. THE PAPER BOOK GIVEN WITH REPLY DATED 2 3.11.2010 IS NOT PAGE NUMBERED AND DOES NOT CONTAIN ANY ANNEXURE-C, HOWEVER WITH REPLY DATED 27.10.2010 A LEDGER ACCOUNT OF LABOUR E XPENSES WAS SUBMITTED WHICH IS ENCLOSED AS ANNEXURE-1 OF THIS O RDER. THIS LEDGER ACCOUNT SHOWS CASH PAYMENTS AND JOURNAL DEBITS TO P ARISHARAN CONSTRUCTION AND TWO MORE PARTIES. NO EVIDENCE WHAT SOEVER HAS BEEN GIVEN AT ANY STAGE FOR THE DEBITS TOTALING TO RS.14,20,400 THEREFORE ADDITION OF RS.14,20,400 IS ALSO UPHELD. 12. THUS OUT OF RS.54,08,784/- ADDED BY THE AO, ADD ITION OF RS.32,14,898/- DEBITED AS LAND PURCHASE AND RS.14,2 0,400 DEBITED AS LABOUR EXPENSE IS UPHELD U/S 69C. 7. LD. AR SUBMITTED THAT ALL THE RELEVANT DETAILS W ERE FURNISHED BEFORE THE LOWER AUTHORITIES INCLUDING PROOF OF PUR CHASE OF LAND AND MATERIAL, LABOR EXPENSES AND ALL OTHER EXPENSES INC URRED FOR DEVELOPMENT OF LAND AND, THEREFORE, LD. CIT(A) ERR ED IN UPHOLDING THE ADDITION U/S 69C OF THE ACT AT RS.46,34,898/-. 8. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS O F LOWER AUTHORITIES. ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 8 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. TWO TYPES OF ISSUES HAVE EMERGED IN THIS GROUND. FIRST ISSUE IS REGARDING GENUINENESS OF THE PURCHASE OF L AND AT RS.32,14,898/- AND LABOUR EXPENSE OF RS.14,50,000/- AND THE OTHER ISSUE IS IN REGARD TO ANOMALY BETWEEN THE TRADING A ND PROFIT AND LOSS ACCOUNT VIS--VIS THE DETAILS OF VALUATION OF CLOSI NG STOCK SUBMITTED BY ASSESSEE DURING ASSESSMENT PROCEEDINGS. AS REGARDS VARIATION IN DETAILS OF TRADING AND P & L ACCOUNT FROM THE PERUS AL OF RECORD IT IS AMPLY CLEAR THAT THE ITEMS WHICH WERE INCLUDED BY T HE ASSESSEE IN THE DETAILS OF VALUATION OF CLOSING STOCK WERE DULY INCORPORATED IN THE TRADING AND P & L ACCOUNT. HOWEVER, THEIR PRESENTAT ION WAS NOT CORRECT. BECAUSE FOLLOWING SIX ITEMS WHICH WERE SHO WN IN THE PROFIT AND LOSS ACCOUNT I.E. AFTER THE G.P. IS BROUGHT DOW N FROM TRADING A/C WERE ACTUALLY REQUIRED TO BE SHOWN IN THE TRADING A CCOUNT BEFORE CALCULATING GP. ELECTRIC EXPENSE RS.3,78,681/- ENGINEERING EXPENSE RS.2,26,000/- LABOUR EXPENSE RS.14,20,000/- GARDEN EXPENSE RS.24,405/- CARTAGE EXPENSE RS.78,400/- SUPERVISION EXPENSE RS.66,000/- RS.7,73,486/- HAD THESE ABOVE REFERRED SIX ITEMS BEEN SHIFTED AND SHOWN IN THE TRADING ACCOUNT THEN THE SAME WOULD HAVE COMPLETELY MATCHED WITH THE DETAILS OF VALUATION OF CLOSING STOCK SUBMITTED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 9 10. FURTHER ASSESSING OFFICER HAS MADE ADDITION U/S 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C OF TH E ACT BY OBSERVING AS UNDER :- ON VERIFICATION OF THE TRADING ACCOUNT, IT IS NOTI CE THAT THE ASSESSEE HAS DEBITED ONLY AN AMOUNT OF RS.32,14,898/-. THE O THER EXPENDITURE OF RS.21,93,486/- HAS NOT BEEN DEBITED IN THE P & L ACCOUNT. THE ASSESSEE FAILED TO PRODUCE ANY SUPPORTING EVIDENCES AND SOURCES OF INVESTMENT MADE IN THE LAND AS WELL AS OTHER EXPEND ITURE INCURRED AS SHOWN AS ABOVE, INSPITE OF A NUMBER OF OPPORTUNITIE S AFFORDED TO HIM. THE ASSESSEE WAS ALSO TIME AND AGAIN REQUIRED TO FU RNISH/PRODUCE THE COPY OF LAND DOCUMENT. THE ASSESSEE ALSO FAILED TO PRODUCE LAND DOCUMENT ALSO, THEREFORE, GENUINENESS OF PURCHASE O F LAND AND THE COST THEREOF IS ALSO NOT VERIFIABLE. IT IS A WELL S ETTLED LAW THAT ONCE AN AMOUNT IS STATED TO HAVE BEEN INCURRED BY THE ASSES SEE FOR THE EXPENDITURE IT IS FOR THE ASSESSEE TO PROVE THE GEN UINENESS AND SOURCE OF SUCH PAYMENTS. THE ASSESSEE FAILED TO DIS CHARGE THE ONUS CAST UPON HIM BY THE STATUTE. AS STATED ABOVE, IT I S ALSO SEEN THAT AN AMOUNT OF RS.21,93,496/- HAS NOT BEEN DEBITED BY TH E ASSESSEE IN THE P & L ACCOUNT, THOUGH STATED TO HAVE BEEN INCUR RED DURING THE YEAR. AS THE ASSESSEE FAILED O PROVE THE SOURCE OF EXPENDITURE, THE AMOUNT OF RS.54,08,384/- IS TREATED AS MET BY THE A SSESSEE OUT OF HIS UNDISCLOSED INCOME AND THE SAME IS TREATED AS THE A SSESSEES DEEMED INCOME U/S 69C OF THE ACT. IN THE CASE OF ASSESSEE THE MAIN REASON FOR THE ADD ITION U/S 69C AS REFERRED IN THE ASSESSMENT ORDER IS THAT NO EXPLANA TION WAS PROVIDED DURING THE ASSESSMENT PROCEEDINGS IN SUPPORT OF DET AILS OF VALUATION OF CLOSING STOCK, WHICH INCLUDED PROOF OF PURCHASE OF LAND, PURCHASE OF MATERIAL AND LABOUR EXPENSES. EVEN BEFORE THE LD . CIT(A) NONE OF THESE DETAILS AND SUPPORTING WERE PROVIDED FOR APPR AISAL. ON THE OTHER HAND, THE LD. AR HAS SUBMITTED THAT ALL THE R EQUIRED DETAILS OF EXPENDITURE AS REQUIRED BY ASSESSING OFFICER WERE P ROVIDED. IN THESE ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 10 CIRCUMSTANCES, WE FEEL THAT THIS ISSUE SHOULD BE RE MITTED BACK TO THE FILE OF ASSESSING OFFICER WHEREIN FRESH OPPORTUNITY WILL BE GIVEN TO THE ASSESSEE TO FURNISH COMPLETE DETAILS WITH SUPPORTIN G OF PROOF OF PURCHASE OF LAND AND PURCHASE OF MATERIAL TOTALING TO RS.32,14,898/- AND SUPPORTING EVIDENCE FOR LABOUR EXPENSES OF RS.1 4,20,400/- TO THE SATISFACTION OF ASSESSING OFFICER. SO THIS GROUND I S ALLOWED FOR STATISTICAL PURPOSES. 11. AS REGARDS GROUND NO.2, WHICH IS REGARDING DISA LLOWANCE OF EXPENDITURE OF RS.1,64,505/- WHICH IS 10% OF RS.16 ,45,052/-, THE LD. AR SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS AS THE ASSESSEE FAILED TO FURNISH A SINGLE EVIDENCE/BILL/VOUCHER IN SUPPORT OF THE CLAIM WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, THE ASSESSING OFFICER DISALLOWED 50% OF THE EXPENDITURE DEBITED T O P & L ACCOUNT WHICH WORKED OUT AT RS.15,32,726/-. 12. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A ) WHO AFTER PERUSAL OF THE P & L ACCOUNT OBSERVED THAT LABOUR E XPENDITURE OF RS.14,20,400 HAS ALREADY BEEN DEALT IN WHILE DECIDI NG GROUND NO.1 RELATING TO ADDITION U/S 69C AND FOR THE REMAINING AMOUNT I.E. 16,45,052/- WHICH ALSO INCLUDED EXPENSES ON ACCOUNT OF ELECTRIC EXPENSES AT RS.3,78,681/-, ENGINEERING EXPENSE AT R S.2,26,000/-, GARDEN EXPENSE AT RS.24,405/-, CARTAGE EXPENSE AT R S.78,400/- AND SUPERVISION EXPENSES AT RS.66,000/- TOTALING TO RS. 7,73,486/- CIT(A) WAS OF THE VIEW THAT NOTHING WAS DETECTED BY THE AS SESSING OFFICER ABOUT CARRYING ON BUSINESS BY THE ASSESSEE AS WELL AS THE SALE EFFECTED DURING THE YEAR UNDER APPEAL AND CERTAINLY CERTAIN EXPENSES ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 11 OUGHT TO BE MADE TO RUN THE BUSINESS AND CONCEPT OF GP RATE WAS NOT APPLICABLE TO THE TYPE OF BUSINESS OF THE ASSESSEE AND, THEREFORE, RESTRICTED THE DISALLOWANCE OF EXPENSES TO 10% OF T HE REMAINING EXPENSES OF RS.16,45,052/- BY OBSERVING AS UNDER :- 16. AFTER GOING THROUGH RIVAL SUBMISSIONS IT IS SE EN THAT LABOUR EXPENSE OF RS.14,20,400/- OUT OF RS.30,65,452/- IS ALREADY UPHELD DISALLOWED IN PARA 10 ABOVE OF THE ORDER, THEREFORE BALANCE EXPENSE IS LEFT OF RS.16,45,052 (RS.30,65,452 RS.14,20,400 ). LEDGER ACCOUNTS OF THE EXPENSES LIKE POSTAGE, SUPERVISION, TELEPHONE, MISCELLANEOUS EXPENSES, PETROL ETC. SHOW THAT THE E XPENSES WERE INCURRED IN CASH WHICH ARE NOT VERIFIABLE, THEREFOR E TO PLUG LEAKAGE OF REVENUE 10% OF RS.16,45,052/- IS DIRECTED TO BE SUS TAINED AS ADDITION AND THE BALANCE IS DIRECTED TO BE DELETED. IT IS IM PORTANT TO POINT OUT HERE THAT VIDE THIS OFFICE NOTICE DATED 18.11.2010 THE APPELLANT WAS ASKED TO INFORM WHY HIS BOOKS OF ACCOUNTS NOT BE RE JECTED AS THE EXPENSES WERE NOT FOUND TALLYING WITH THE PAYMENTS CLAIMED TO HAVE BEEN MADE THROUGH HIS HDFC BANK ACCOUNT. THE APPELL ANT WAS ALSO ASKED TO FURNISH GP CHART OF LAST THREE YEARS AND O F AY 2008-09 AND 2009-10. IN RESPONSE VIDE LETTER DATED 23.11.2010 I T WAS STATED THAT THE APPELLANT DEALS IN LAND AND THE GP RATE IS NOT APPLICABLE IN HIS LINE OF BUSINESS. GP CHART WAS NOT FURNISHED. IN THE LIG HT OF THESE SUBMISSIONS I AM MORE CONVINCED ABOUT THE DISALLOWA NCE OF 10% OF EXPENSES OF RS.16,45,052/- 13. BEING AGGRIEVED, THE ASSESSEE IS NOW IN SECOND APPEAL BEFORE THE TRIBUNAL. THE LD. AR SUBMITTED THAT ALL NECESSA RY DETAILS WERE SUBMITTED TO SUPPORT THE EXPENDITURE AND NO MAJOR D ISCREPANCY WAS DETECTED BY THE ASSESSING OFFICER IN THE BOOKS OF A CCOUNT AND, THEREFORE, 10% OF EXPENSES SUSTAINED BY LD. CIT(A) SHOULD BE DELETED. 14. THE LD. DR SUPPORTED THE ORDERS OF LOWER AUTHOR ITIES. ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 12 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM GOING THROUGH THE ASSESSMENT ORDER, WE SEE THAT NON-FURNISHING OF EVIDENCE/BILLS/VOUCHERS IN SUPPOR T OF EXPENDITURE BY ASSESSEE WAS THE MAIN REASON WHICH TRIGGERED THE DI SALLOWANCE OF RS.15,32,726/- BY THE ASSESSING OFFICER. HOWEVER, T HERE ALSO REMAINS THE FACT THAT THE ASSESSING OFFICER HAS NOT QUESTIONED THE REVENUE OF THE ASSESSEE DURING THE YEAR UNDER APPEA L AND ALSO ANALYSIS ON THE BASIS OF GP RATE IS NOT APPLICABLE TO THE TYPE OF BUSINESS OF THE ASSESSEE. FURTHER TO RUN ANY BUSINE SS CERTAIN EXPENSES ARE REQUIRED TO BE MADE AND IN THE CASE OF ASSESSEE TOTAL SALES FOR THE YEAR ARE AT RS.32,78,400/- AND THE NE T PROFIT OF RS.8,57,982/- HAS BEEN SHOWN BY THE ASSESSEE WHICH MAKES CALCULATION OF NP @ 26% OF THE GROSS REVENUE WHEREA S AS PER THE PROVISIONS OF SECTION 44AD WHICH RELATES TO SPECIAL PROVISIONS FOR COMPUTING PROFITS AND GAINS OF BUSINESS ON PRESUMPT IVE BASIS, AN ASSESSEE IS REQUIRED TO DISCLOSE MINIMUM 8% PROFITS OF GROSS RECEIPTS AS INCOME IF ENGAGED IN THE BUSINESS OF CIVIL CONST RUCTION OR SUPPLY OF LABOUR FOR CIVIL CONSTRUCTION, IF THE TURNOVER FOR THE YEAR IS LESS THAN RS.40 LACS. HOWEVER, ASSESSEE HAS SHOWN THE NP OF 2 6% OF TOTAL SALES AT RS.32,78,400/. IN SUCH CIRCUMSTANCES WHERE THE ASSESSEE HAS SHOWN NP AT 26% WHICH IS MUCH HIGHER THAN THE N P OF 8% OF GP AS PER THE PROVISIONS OF SECTION 44AD OF THE ACT, W E DO NOT FIND ANY REASON TO SUSTAIN THE DISALLOWANCE OF EXPENSES, IN THE CIRCUMSTANCES WHEN THERE IS NO CONTRARY VIEW ON RECORD TO DISPROV E THE REVENUE EARNED BY THE ASSESSEE. WE DIRECT TO DELETE THE IMP UGNED DISALLOWANCE. THIS GROUND OF ASSESSEE IS ALLOWED. ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 13 16. REGARDING GROUND NO.3, WHICH RELATES TO ADDITIO N OF RS.8,27,250/-, THE FACTS ARE THAT DURING THE ASSESS MENT PROCEEDINGS ON VERIFICATION OF THE BALANCE SHEET THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.10,97,250/- AS ADVANCE FROM JOITARAM PRAJAPATI AND HIS FAMILY MEMBERS. NOT ICE UNDER SECTION 133(6) OF THE ACT WAS ISSUED TO JOITARAM PRAJAPATI, IN RESPONSE TO WHICH JOITARAM PRAJAPATI REPLIED THAT ONLY AN AMOUN T OF RS.2,70,000/- WAS GIVEN BY HIM TO THE ASSESSEE MR. MUKESHBHAI H. PATEL AND HE FURTHER STATED THAT HE IS NOT AWARE OF ANY OTHER AM OUNT STANDING AS CREDIT SHOWN IN THE LEDGER ACCOUNT IN THE BOOKS OF ACCOUNT OF ASSESSEE. ASSESSEE WAS GIVEN NUMBER OF OPPORTUNITIE S TO FURNISH EVIDENCE IN SUPPORT OF THE CREDITS REFLECTED IN THE BALANCE SHEET BUT AS THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST U PON HIM THE DIFFERENT AMOUNT OF ADVANCE SHOWN FROM JOITARAM PRA JAPATI AT RS.10,97,250/- AND THE AMOUNT ACCEPTED TO HAVE BEEN GIVEN BY JOITARAM PRAJAPATI TO THE ASSESSEE AT RS.2,70,000/- , THE BALANCE AMOUNT I.E. RS.8,27,250/- (RS.10,97,250/- - RS.2,70 ,000/-) WAS TREATED BY ASSESSING OFFICER AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. 17. BEING AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A) WHICH DID NOT BRING ANY RELIEF TO THE ASSESSEE AS THE LD. CIT(A) UPHELD THE ADDITION MADE BY ASSESSING OFFICER BY OBSERVING AS UNDER :- 17. GROUND NO.5 ADDITION U/S 68 RS.8,27,250 OF TH E IT ACT, 1961. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT RS.8,27, 250/- WAS ADDED U/S 68 BECAUSE ON ENQUIRIES MADE U/S 133(6) SHRI JO ITARAM PRAJAPATI DENIED HAVING GIVEN MORE THAN RS.2,70,000 TO THE AP PELLANT WHEREAS IN THE BALANCE SHEET RS.10,97,250 HAD BEEN SHOWN AS ADVANCE FROM ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 14 SHRI JOITARAM PRAJAPATI. SEVERAL OPPORTUNITIES WERE GIVEN BY THE AO TO THE APPELLANT BUT NO PROFS COULD BE FURNISHED. DURING THE COURSE OF APPELLANT PROCEEDINGS IT HAS B EEN STATED THAT IT WAS AMOUNT RECEIVED FROM NOT JUST SHRI JOITARAM PRA JAPATI BUT ALSO FROM HIS RELATIVES AGAINST PLOT BOOKINGS, IT WAS ST ATED THAT STATEMENTS OF RELATIVES WERE NOT RECORDED BY THE AO AND THAT N O CROSS EXAMINATION OF JOITARAM PRAJAPATI WAS GIVEN BY THE AO. AFTER GOING THROUGH THE RIVAL SUBMISSIONS THE ADDIT ION IS DIRECTED TO BE UPHELD BECAUSE IN THE BALANCE SHEET ONLY NAME OF JO ITARAM PRAJAPAI APPEARS AGAINST RS.10,97,250/- AND HE DENIED HAVING GIVEN ANYTHING OTHER THAN RS.2,70,000/-. THE AO WAS UNDER NO OBLIG ATION TO ALLOW CROSS EXAMINATION OF THE PERSON, THE RELEVANT REPLY OF THE PERSON WAS MADE AVAILABLE TO THE APPELLANT AND HE COULD NOT JU STIFY THE CREDIT STANDING AGAINST THIS NAME. AGGRIEVED, THE ASSESSEE IS NOW IN FURTHER APPEAL BE FORE THE TRIBUNAL. 18. THE LD. AR SUBMITTED THAT ALL AMOUNT RECEIVED F ROM SHRI JOITARAM PRAJAPATI AND HIS FAMILY MEMBERS IS TAKEN BY CASH/CHEQUES IN EARLIER YEARS AGAINST BOOKING OF PLOTS WHICH IS REFLECTED IN BANK STATEMENT OF THE ASSESSEE AND FURTHER WE PRODUCED F OLLOWING TABLE, SHOWING AMOUNT RECEIVED AGAINST BOOKING OF PLOTS, Y EAR OF RECEIPT, YEAR OF REFUND DUE TO CANCELLATION ETC. SL.NO. NAME OF PERSON DATE OF RECEIPT AMOUNT RECEIVED DATE OF PAYMENT AMOUNT OF PAYMENT CLOSING BALANCE AS ON 31.03.10 1. JAYANTILAL PRAJAPATI 2005-06 50,000 - - 50,000 2. GITABEN G. PRAJAPATI 21.12.2006 90,000 - - 90,000 3 JAMNABEN G PRAJAPATI 11.01.2007 90,000 - - 90,000 4. JOITARAM 2005-06 4,50,000 21.3.2007 90,000 2,70,000 ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 15 PRAJAPATI 21.3.2007 90,000 5. KAMLABEN G. PRAJAPATI 12.12.2006 90,000 - - 90,000 6 NITABEN G. PRAJAPATI 3.1.2007 90,000 - - 90,000 7 RAMESHBHAI N. PRAJAPATI 2005-06 3,25,000 - - 3,25,000 8 RAMESHBHAI S. PRAJAPATI 1.4.2006 6.4.2006 26.11.2006 47,250 45,000 90,000 21.3.2007 90,000 92,250 19. LD. AR FURTHER SUBMITTED THAT THE FACT OF RECEI VING AND PAYING AMOUNT, AND THAT PAYERS ARE RELATIVES OF SHRI JOITA RAM PRAJAPATI CANNOT BE DENIED BY STATEMENT RECORDED BY LEARNED I TO OF SHRI JOITARAM PRAJAPATI, BECAUSE THE FACTS STATES OTHERW ISE FOR AMOUNT RECEIVED PAID VIS--VIS BEING RELATIVES OF SHRI JOI TARAM PRAJAPATI. THE APPELLANT WAS NOT PROVIDED WITH ANY OPPORTUNITY FOR CROSS-VERIFICATION OF SHRI JOITARAM PRAJAPATI. HOWEVER, NOTE THAT DUE TO DIFFERENCE OF OPINION ABOUT THE SPECIFICATION OF THE SCHEME AND N ON-PAYMENT OF FURTHER INSTALMENTS HAS RESULTED INTO CANCELLATION OF THE PLOT BY THE ASSESSEE AND SUBSEQUENTLY, THE AMOUNT WAS REFUNDED IN NEXT YEARS. COPY OF ACCOUNT OF ALL THE PERSONS WHO HAVE BOOKED THE PLOTS IN THE SCHEME ARE ENCLOSED FROM THE FY 2005-06 TO 2009-10 AS ANNEXURE- V. PLEASE NOTE THAT ALL THE REFUND OF BOOKING AMOUN T ARE PAID BY ACCOUNT PAYEE CHEQUES WHICH CLEARLY INDICATES AND C ONFIRMS THE FACT ABOUT CORRECTNESS AND GENUINENESS OF SUCH PLOT BOOK INGS. 20. LD. AR FURTHER SUBMITTED THAT THE COPY OF ACCOU NT SHOWS THAT THE AMOUNT PERTAINING TO SHRI RAMESH N. PRAJAPATI F OR PLOT BOOKING AMOUNTING TO RS.3,75,000 (PERTAINING TO RAMESHBHAI PRAJAPATI RS.325000 AND JAYANTILAL PRAJAPATI RS.50000) WERE R ECEIVED DURING ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 16 FY 2005-06 I.E. CORRESPONDING TO AY 2006-07 AND THE REFORE THIS ADDITION OF RS.3,75,000 IS WRONGLY MADE IN THE YEAR UNDER REVIEW AS THIS IS NOT AN INCOME U/S 68 DURING AY 2007-08. 21. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF LOWER AUTHORITIES. 22. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IS THAT ASSESSEE HAS SHOWN ADV ANCE RECEIVED FROM JOITARAM PRAJAPATI AND HIS FAMILY MEMBERS UNDE R ONE HEAD UNDER THE LEDGER ACCOUNT IN THE NAME OF JOITARAM PR AJAPATI AT RS.10,97,250/-. DURING ASSESSMENT PROCEEDINGS WHEN DETAILS WERE CALLED FOR BY THE ASSESSING OFFICER, ASSESSEE FAILE D TO PROVIDE PROPER REPLY TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE ADVANCE OF RS.10,97,250/- AND SIMILAR SITUATION HAPPENED BE FORE LD. CIT(A) DUE TO WHICH EXCEPT FOR RS.2,70,000/- WHICH WAS ACC EPTED BY JOITARAM PRAJAPATI TO HAVE BEEN GIVEN TO THE ASSESS EE, THE REMAINING AMOUNT OF RS.8,27,250/- WAS ADDED U/S 68 OF THE ACT AND UPHELD BY LD. CIT(A). 23. HOWEVER, ON PERUSAL OF THE PAPER BOOK, WE HAVE COME ACROSS VARIOUS LEDGE ACCOUNTS SUPPORTING THE SUBMISSIONS M ADE BY LD. AR ABOVE BY WAY OF THE TABLE SHOWING AMOUNT RECEIVED A GAINST BOOKING OF PLOTS, YEAR OF RECEIPT, YEAR OF REFUND DUE TO CA NCELLATION ETC. WHICH HAD BEEN TAKEN BY CASH AND CHEQUES IN EARLIER EARS AGAINST BOOKING OF PLOTS AND SOME OF THE AMOUNTS HAVE BEEN REPAID B Y CHEQUES DUE TO CANCELLATION OF PLOTS WHICH ARE REFLECTED IN THE STATEMENT OF THE ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 17 ASSESSEE. LD. AR HAS ALSO REFERRED TO AN AMOUNT OF RS.3,75,000/- WHICH WAS FORMING PART OF THE ADVANCE OF RS.10,97,2 50/- SHOWN TO HAVE BEEN RECEIVED FROM JOITARAM PRAJAPATI AND FAMI LY MEMBERS AND THIS AMOUNT OF RS.3,75,000/- WAS RECEIVED DURING TH E YEAR 2006-07 I.E. YEAR BEFORE THE YEAR UNDER APPEAL AND AS ARGUE D THAT THIS ADDITION OF RS.3,75,000/- IS WRONGLY MADE IN THE YE AR UNDER APPEAL. 24. IN VIEW OF THE ABOVE DISCUSSION, WE COME TO A C ONCLUSION THAT THE ASSESSEE SEEMS TO BE IN POSSESSION OF VARIOUS D ETAILS, SUPPORTING EVIDENCES AND PROOFS TO SUPPORT HIS CLAI M THAT RS.8,27,250/- IS FULLY EXPLAINED BUT THE SAME WAS N OT EXAMINED BY THE ASSESSING OFFICER FOR THE FAILURE ON THE PART O F ASSESSEE TO SHOW THE SAME DURING THE ASSESSMENT PROCEEDINGS AND, THE REFORE, APPLYING THE PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT PROPER TO REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO GIVE ONE MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE SO THAT ALL THE NECESSARY EVIDENCES AND DETAILS CAN BE SHOWN BY THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF RS.8,27,250/- A ND FURTHER IF THE AMOUNT OF RS.3,75,000/- AS DISCUSSED ABOVE AND CLAI MED BY THE ASSESSEE TO HAVE BEEN RECEIVED IN EARLIER YEAR AND IF THE ASSESSING OFFICER IS SATISFIED TO THIS FACT THEN THE ADDITION OF RS.8,27,250/- SHOULD BE REDUCED TO RS.4,25,250/-. IN THE RESULT, THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 25. NOW WE TAKE UP THE APPEAL OF REVENUE IN ITA NO.364/AHD/2011 ASST. YEAR 2007-08 :- ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 18 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THI S APPEAL :- 1. THE LD. CIT(A)XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.7,73,486/- MADE BY THE ASSESSING OFFICER U/S 69C ON ACCOUNT OF COST OF PURCHASE OF L AND. 2. THE LD. CIT(A) XV, AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.10,52,891/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CLOSING STOCK. 3. THE LD. CIT(A) XV, AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN DELETING THE DISALLOWANCE OF EXPENDITURE AMOUNTING TO RS.13,68,221/- MADE BY THE ASSESSING OFFICER. 4. THE LD. CIT(A) XV, AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN ADMITTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) XV, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 26. AS REGARDS GROUND NO.1, WHICH IS IN RESPECT OF DELETING THE ADDITION OF RS.7,73,486/-, WE LIKE TO STATE THAT TH IS ISSUE HAS BEEN DECIDED BY US WHILE DEALING WITH GROUND NO.1 OF ASS ESSEES APPEAL VIDE PARA NOS. 9 & 10 ABOVE WHEREIN WE HAVE DISCUSS ED THE ISSUE IN DETAIL AND UPHELD THE ORDER OF CIT(A) TO THE EXTENT OF RESTRICTING THE ADDITION TO RS.46,35,298/- OUT OF TOTAL ADDITION MA DE BY ASSESSING OFFICER OF RS.54,08,784/- AND HAVE REMITTED BACK TH E ISSUE TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE GENUINENESS AND CORRECTNESS OF EXPENDITURE ON PURCHASE OF LAND AND MATERIAL OF RS. 32,14,898/- AND ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 19 OF LABOUR EXPENSES OF RS.14,20,400/-. SO, IN VIEW O F OUR ABOVE DISCUSSION, WE DISMISS THIS GROUND OF REVENUE. 27. THE NEXT ISSUE IS REGARDING DELETING THE ADDITI ON OF RS.10,52,891/-. DURING ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER OBSERVED THAT IN THE BALANCE SHEET OF THE A SSESSEE AN AMOUNT OF RS.10,52,891/- WAS SHOWN UNDER THE HEAD CURRENT ASSETS IN THE NAME OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY (IN S HORT AUDA). AS THIS AMOUNT OF RS.10,52,891/- WAS NOT ROUTED THR OUGH THE TRADING AND P & L ACCOUNTS, ADDITION OF RS.10,52,891/- WAS MADE BY THE ASSESSING OFFICER. 28. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE T HE CIT(A) WHO AFTER EXAMINING THE ISSUE, WAS OF THE VIEW THAT THI S AMOUNT OF RS.10,52,891/- WAS AUDA FEES WHICH WAS PAID FOR A L AND WHICH DID NOT CAME IN THE OWNERSHIP OF THE APPELLANT UPTO 31. 3.2007 AND, THEREFORE, THIS WAS IN THE NATURE OF AN ADVANCE BUT INADVERTENTLY STATED AS AUDA FEES CLOSING STOCK AND ACCORDINGLY D IRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION. 29. AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER WHEREAS THE LD. AR RELIED ON THE ORDER OF CIT(A) AND SUBMITTED THAT AUDA FEES OF RS.10,52,891/- WAS ACTUALLY AN ADVANCE FOR PURCHASE OF LAND WHICH WAS NOT IN THE OWNERSHIP OF THE ASSESSEE UPTO 31.3. 2007 AND, THEREFORE, IT WAS CORRECTLY SHOWN UNDER THE HEAD CU RRENT ASSETS IN THE BALANCE SHEET. HOWEVER, THE NOMENCLATURE SHOULD HAV E BEEN USED ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 20 AS AUDA FEES ADVANCE, BUT WAS WRONGLY SHOWN AS AUDA FEES CLOSING STOCK BUT THIS AMOUNT OF RS.10,52,891/- WAS NOT AT ALL RELATING TO P & L ACCOUNT AND ITS NATURE WAS PURELY OF AN AD VANCE. 30. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AUDA FEES OF RS.10,52,891/- WHICH WAS PA ID BY THE ASSESSEE FOR THE LAND WHICH WAS NOT PURCHASED BY TH E ASSESSEE UPTO 31.3.2007 WAS AN ADVANCE IN NATURE. SUCH TYPE OF AD VANCE DO NOT FORM PART OF TRADING AND P & L ACCOUNT FOR THE TYPE OF BUSINESS OF THE ASSESSEE UPTO THE TIME WHEN ASSESSEE OWNED THE LAND . IN OTHER WORDS WHEN THE ASSESSEE WILL FINALLY PURCHASE THE L AND AND GET OWNERSHIP IN ITS NAME THEN HE WILL ADD THE AUDA FEE S TO THE COST OF THE LAND AND WILL HAVE TO SHOW THEREAFTER IN THE TR ADING ACCOUNT. THE ASSESSING OFFICER HAS NOT CONTROVERTED THE GENUINEN ESS OF AUDA FEES AND, THEREFORE, WE ARE OF THE VIEW THAT THIS A UDA FEES OF RS.10,52,891/- IS AN ADVANCE AND WAS, THEREFORE, RI GHTLY SHOWN UNDER THE HEAD CURRENT ASSETS AND WAS NOT REQUIRED TO BE PASSED THROUGH TRADING ACCOUNT A/C AND, THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUN D OF REVENUE IS DISMISSED. 31. GROUND NO.3 IS REGARDING DELETION OF DISALLOWAN CE OF EXPENDITURE AMOUNTING TO RS.13,68,221/-. WE HAVE DE CIDED THIS ISSUE VIDE PARA NO. 15 ABOVE IN ASSESSEES APPEAL AND DE LETED THIS ADDITION ON ACCOUNT OF DISALLOWING OF EXPENSES. ACC ORDINGLY THIS GROUND OF REVENUE IS DISMISSED. ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 21 32. GROUND NO.4 IS REGARDING ADMISSION OF ADDITIONA L EVIDENCE. THIS GROUND HAS NOT BEEN PRESSED BEFORE US. HOWEVER , WE HAVE REMITTED BACK SOME OF THE MAJOR ISSUES OF THE APPEA LTO THE FILE OF ASSESSING OFFICER. HENCE THIS GROUND IS DISMISSED. 33. GROUND NOS.5 & 6 ARE OF GENERAL NATURE. THEY NE ED NO ADJUDICATION. 34. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES AND THE APPEAL FILED BY THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DEC.2015 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 1/12/15 MAHATA/- 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 ITA NOS.358 & 364/AHD/2011 ASST. YEAR 2007-08 22 1. DATE OF DICTATION: 27/11/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 30/11/2015 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: 1/12/15 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: