Shri Arvindbhai Dhanjibhai Chokshi, Ahmedabad V. The Income tax Officer,Ward-3(2), Ahmedabad

ITA 3972/AHD/2008

• Counselvise Citation: 397220514 RSA 2008
• Duration Of Justice: 3 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-10-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 08-12-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: S N DIVATIA
• Keywords: Gift; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO. 3972/AHD/2008 A. Y.: 2003-04 ARVINDBHAI DHANJIBHAI CHOKSHI, PROP. CHOKSHI ARVINDKUMAR & CO., ARVINDBHAI HOUSE, 3 RD FLOOR, C. G. ROAD, AHMEDABAD 380 009 P. A. NO. AEIPC 5464 Q VS THE INCOME TAX OFFICER, WARD 3 (2), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S.N. DIVATIA, AR RESPONDENT BY SHRI D. K. SINGH, SR. DR DATE OF HEARING: 30-10-2012 DATE OF PRONOUNCEMENT: 27-11-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT( A)-6, AHMEDABAD DATED 26-09-2008 IN APPEAL NO. CIT(A)-6/W D.1 (3)/35/07-08, FOR THE ASSESSMENT YEAR 2003-04 PASSE D U/S 250 READ WITH SECTION 143(3) OF THE ACT. 2. THE ASSESSEE HAS TAKEN 9 ELABORATE GROUNDS OF AP PEAL AND FURTHER VIDE LETTER DATED 03-01-2012 HAD MODIFIED T HE GROUNDS AND ON ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 2 PERUSAL OF THE SAME WE OBSERVED THAT THE MODIFIED G ROUNDS OF APPEAL ARE REPETITIVE. GROUND NO.1 OF THE MODIFIED GROUNDS OF APPEAL IS GENERAL IN NATURE AND, THEREFORE, DO NOT SURVIVE FO R ADJUDICATION AND THE MODIFIED GROUND NO.7 OF THE APPEAL WITH RESPECT TO CHARGING OF INTEREST U/S. 234-A/B/C OF THE ACT IS HELD AS CONSE QUENTIAL. FOR THE SAKE OF CONVENIENCE, WE HAVE CONCISE THE RELEVANT G ROUNDS/MODIFIED GROUNDS OF THE APPEAL OF THE ASSESSEE FOR OUR CONSI DERATION HEREIN BELOW:- 1. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN UPHOLDING THE DISALLOWANCE OF DEPRECIATION OF RS.13,13,700/- IN RESPECT OF SHOP AT C. G. ROAD, AHMEDABAD ON THE GROUND THAT THE ASSET IS NOT PUT T O USE DURING THE YEAR. 2. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O N FACTS IN UPHOLDING THE ADDITION OF RS.56,70,000/- IN RESPECT OF GIFT AS NON GENUINE AND CONSIDERING THE SAME AS INCOME F ROM UNDISCLOSED SOURCES AS HELD BY THE LEARNED AO. 3. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.2,31,000/- OUT OF SALARY EXPENSES. 4. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.20,000 OUT OF C AR EXPENSES AND RS.65,000 OUT OF CAR DEPRECIATION. 5. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.25,000 OUT OF TELEPHONE EXPENSES. 3. THE ASSESSEE, AN INDIVIDUAL ENGAGED IN THE BUSIN ESS AS JEWELERS AND BULLION TRADERS FILED ITS RETURN OF IN COME ON 30-11-2003 DECLARING TOTAL INCOME AT NIL. THEREAFTER THE RETU RN WAS PROCESSED U/S ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 3 143 (1) OF THE ACT AND SUBSEQUENTLY SELECTED FOR SC RUTINY. THE ASSESSMENT WAS FINALIZED U/S 143(3) OF THE ACT ON 2 4-03-2006, WHEREIN THE LEARNED AO HAD DISALLOWED CERTAIN CLAIM S OF THE ASSESSEE AND ASSESSED THE TOTAL INCOME OF THE ASSES SEE AT RS.68,00,081/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARN ED CIT(A). HOWEVER, THE LEARNED CIT(A) CONSIDERING THE FACTS O F THE CASE, SUBMISSIONS OF THE ASSESSEE AND THE OBSERVATIONS MA DE BY THE LEARNED AO, CONFIRMED ORDER OF THE LEARNED AO ON A LL THE ISSUES. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST TH E ORDER OF THE LEARNED CIT(A). 5. GROUND NO.1:- DISALLOWANCE OF RS.13,13,700/- ON ACCOUNT OF DEPRECIATION CLAIMED ON THE BUSINESS PREMISES:- DURING THE YEAR UNDER APPEAL, THE ASSESSEE HAD CLAIMED 50% OF THE E LIGIBLE DEPRECIATION AT RS.13,13,700/- OF HIS SHOP AT C. G . ROAD. TO VERIFY THE CLAIM OF DEPRECIATION, THE LEARNED AO DEPUTED H IS INSPECTOR TO ASCERTAIN WHETHER THE ASSESSEES BUSINESS ACTIVITY WAS CONDUCTED IN THE ABOVE SAID PREMISED. THE INSPECTOR AFTER VERIFY ING THE PREMISES GAVE THE FOLLOWING REPORT:- IN THIS BUILDING THE REPAIRING AND RENOVATION WORK WAS GOING ON. I CANT ENTER IN THE BUILDING AS THE RAW MATERI AL AND OTHER MISC MATERIALS ARE THERE WHICH ARE USED IN THE RENO VATION WORK. I CALLED FOR ONE PERSON WHO IS AN EMPLOYEE OF THE FIRM NAMED SHRI ANILBHAI [RAJASTHANI] SAYS THAT THIS WOR K WAS STARTED BEFORE 3 YEARS BACK AND LIKELY TO BE COMPLE TED WITHIN 6 MONTH. HE DOES NOT KNOW THE PERSON WHO DONE THIS WO RK. THEN I GO AT SUMMIT HOTEL SITUATED AT LEFT SIDE OF THE P REMISES WHERE ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 4 ONE WATCHMAN IS THERE IS ALSO TOLD THAT THIS RENOVA TION WORK WAS STARTED BEFORE 2 OR 3 YEARS BACK. THEN AFTER, I APP ROACH ONE SHOP OF PAN PARLOR AT THE RIGHT SIDE OF THE PREMISE S NAMED SURESH MINI. DEPARTMENT STORES AND HE INFORMED THAT ONE OLD WOMAN RESIDING IN THIS PREMISES BEFORE THREE YEARS AGO, SHE VACANT THIS BUILDING 3 YEARS BACK AND THE RENOVATIO N AND REPAIRING WORK WAS STARTED. 6. SINCE, THE REPORT OF THE INSPECTOR WAS CONTRARY TO THE CLAIM OF THE APPELLANT, THE LEARNED AOS PREDECESSOR PERSONA LLY VISITED THE PREMISES TO VERIFY THE CLAIM OF THE APPELLANT AND M ADE THE FOLLOWING OBSERVATION:- THE UNDERSIGNED HAS ALSO PERSONALLY SEEN THE PREMI SES FROM THE OUTSIDE AND SEEN THAT NO SHOWROOM HAS BEEN EREC TED AND NO BUSINESS ACTIVITIES WERE GOING ON. 7. FROM THE FINDINGS OF THE INSPECTOR AND OBSERVATI ON OF THE LEARNED PREDECESSOR AO, THE LEARNED AO NOTICED THAT THE ASSESSEE HAD MANIPULATED HIS RECORDS FOR THE PURPOSE OF CLAI MING DEPRECIATION. THE LEARNED AO ASKED THE ASSESSEE VIDE LETTER DATED 24-02-206 TO ATTEND HIS OFFICE ON 28-02-2006 ALONG WITH THE DOCU MENTS IN SUPPORT OF HIS CLAIM OF DEPRECIATION. SINCE THERE WAS NO RE SPONSE ON THE PART OF THE ASSESSEE, THE LEARNED AO SUBSEQUENTLY SHOW-C AUSED THE ASSESSEE CONTEMPLATING AN ADDITION OF RS.73,41,000/ - INCLUDING DISALLOWANCE OF CLAIM OF DEPRECIATION. IN RESPONSE THERETO, THE ASSESSEE VIDE HIS REPLY DATED 13-03-2006 FURNISHED CERTAIN CONFIRMATION LETTERS OF CUSTOMERS AND SOUGHT FOR CR OSS-EXAMINATION OF THE INSPECTOR. THE LEARNED AO FIXED THE CROSS-EXAM INATION ON 20-03- 2006 WITH A REQUEST TO THE ASSESSEE TO PRODUCE ALL THE CUSTOMERS, BUT THE ASSESSEE FAILED TO ATTEND THE SAME AND SOUGHT F OR ADJOURNMENT. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 5 THE LEARNED AO FIXED THE CROSS-EXAMINATION AGAIN ON 22-03-2006 AND 23-03-2006 WITH A REQUEST TO THE ASSESSEE TO PR ODUCE ALL THE 16 CUSTOMERS. ON 22-03-2006, THE ASSESSEE DID NOT ATT END THE OFFICE OF THE LEARNED AO FOR CROSS-EXAMINATION OF THE INSPECT OR. HOWEVER, A LETTER WAS RECEIVED FROM THE ASSESSEES AUTHORIZED REPRESENTATIVE WHICH READS AS UNDER:- PLEASE REFER TO YOUR LETTER DTD. 17 TH MARCH, 2006 RECEIVED BY US IN LATE EVENING ON THAT DAY REQUIRING ME TO PRODUCE SIXTEEN CUSTOMERS AT 10.30 ON 20/03/2006. IT IS NOT POSSIBL E TO CONVEY THE MESSAGE IN SHORT TIME. YOU ARE THEREFORE, REQUE STED TO GIVE AN ADJOURNMENT ON 24/03/2006 AND IT IS NOT POSSIBLE TO PRODUCE ALL THE SIXTEEN CUSTOMERS AT THE TIME BECAUSE IT ME ANS WHILING AWAY OF TIME FOR ALL OF THEM. I WILL BE PRODUCED IN THE GROUP OF FOUR TWO BEFORE LUNCH AND TWO AFTER LUNCH. KINDLY C ONFIRMED. SO, FAR EXAMINING INSPECTOR AT 5.00 PM ON 20/3/2006 IS CONCERNED, KINDLY GIVE THE TIME ON ANY DAY BETWEEN 12.30 TO 2. 00 PM FOR EXAMINATION. 8. ON 23-03-206 THE ASSESSEE PRODUCED 5 OF HIS CLIE NTS AND THEIR STATEMENTS WERE RECORDED. THE LEARNED AO REJECTED T HE STATEMENTS OF THE AFORESAID CUSTOMERS ON THE FOLLOWING REASONS :- (I) MRS. KANTABEN FILED A LETTER STATING THAT SHE H AS MADE PURCHASE OF AN EAR RING OF RS.1600/-. MRS. KANTABEN STAYS AT SHAHPUR WHICH IS VERY NEAR TO MANEK CHAWK WHERE THE ASSESSEE OWNS A SHOP. SHAHPUR IS AN AREA WHICH IS WITHIN THE CITY WHERE GOODS ARE AVAILABLE AT COMPET ITIVE AND CHEAP RATES. HENCE, IT IS ILLOGICAL THAT A RESI DENT OF SHAHPUR WILL COME TO CG ROAD FOR PURCHASE OF AN EAR RING OF RS.1600/- IN A SHOP WHICH IS, AS PER ASSESS EE, JUST BEGUN SELLING. THE STATEMENT WAS GIVEN BY HER DAUGH TER AND NOT BY KANTABEN. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 6 (II) MS. PINKI CHIRAGBHAI LIVES AT VEJALPUR AND HAS STATED TO HAVE PURCHASED AN EAR RING OF RS.1575/-. HER HUSBAN D EARNS RS.4000 5000 IN A PRIVATE COMPANY. THEY HAV E LIMITED INCOME. IT IS WELL KNOWN THAT ANY BODY WITH A LIMITED INCOME DOES NOT SHOP FROM CG ROAD BUT MANEK CHOWK WHERE THE CHARGES ARE SLIGHTLY LOWER. HENCE, THIS STATEMENT GIVEN BY THE CUSTOMER IS SELF DEFEATING A ND UNRELIABLE. (III) MRS. SWATI R. SHAH HAS MADE PURCHASES OF RS.1 2,500/-. IT IS SEEN THAT HER HUSBAND WORKS WITH THE ASSESSEE AND IT IS CLEAR THAT HER LETTER AS WELL AS HER STATEMENT I S INFLUENCED BY THE ASSESSEE. (IV) MR. DEVENDRA ARVIND BHAI STAYING AT VASNA, HAS PURCHASED SILVER ARTICLES OF RS.250/-. HE HAS STATE D THAT BECAUSE HE IS A FRIEND OF THE ASSESSEE, HE MAKES PURCHASED WITH HIM. IT IS CLEAR THAT THE PARTY IS R ELATED TO THE ASSESSEE AND EVEN IF THE PURCHASE WAS MADE FROM MANEK CHOWK, HE WOULD BE WILING TO OBLIGE A FRIEND. HIS LETTER AS WELL AS STATEMENT IS UNRELIABLE. (V) MRS. PARUL LALJIBHAI THAKKAR STAYS IN VASNA AND HAS PURCHASED A RING OF RS.840/-. SHE HAS STATE THAT SH E MAKES PURCHASES WITH ASSESSEE BECAUSE SHE KNOWS THE ASSESSEE SINCE LONG. SHE ALSO STATED THAT SHE HAD BENEFITED IN RESPECT OF MAKING CHARGES. IT IS CLEAR THAT SHE WAS MAKING PURCHASES FROM THE MANEK CHOWK SHOP WHERE THE SHOP WAS WELL ESTABLISHED. IT IS CLEAR TH AT SHE WOULD BE INFLUENCED BY THE ASSESSEE AND CAN NOT BE RELIED UPON AS AN INDEPENDENT WITNESS. HENCE, HER STATEMENT IS REJECTED AS EVIDENCE. 9. IN VIEW OF THE UNRELIABLE STATEMENT OF THE CUSTO MERS, REPORT OF THE INSPECTOR THAT THE ASSESSEES CG ROAD SHOP WAS NOT IN OPERATION EVEN IN JUNE, 2004 WHICH WAS FURTHER CORROBORATED B Y THE LEARNED PREDECESSOR AO, THE LEARNED AO WAS CONVINCED THAT T HE ASSESSEE WAS NOT CONDUCTING ANY BUSINESS AT HIS CG ROAD SHOP DURING ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 7 JANUARY TO MARCH, 2003 SINCE THE BUILDING WAS UNDER CONSTRUCTION AND THEREFORE REJECTED THE ASSESSEES CLAIM FOR DEP RECIATION AMOUNTING TO RS.13,13,700/- ON THE THE SHOP AT CG R OAD AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 10. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEAR NED CIT(A). THE LEARNED CIT(A) CONSIDERING THE FACTS OF THE CASE, S UBMISSION OF THE ASSESSEE, REPORT OF THE INSPECTOR AND THE OBSERVATI ON OF THE LEARNED PREDECESSOR AO, CONFIRMED THE ORDER OF THE LEARNED AO AND OBSERVED UNDER: ON APPELLANTS REQUEST, THE ASSESSING OFFICER OFFE RED THE CROSS-EXAMINATION OF THE INCOME-TAX INSPECTOR ON 20 .3.2006 AT 5.00 P.M. AND ALSO REQUESTED TO PRODUCE ALL THE CLIENTS/CUSTOMERS, WHOSE AFFIDAVITS/CONFIRMATION LE TTERS HAVING BEEN FURNISHED BY HIM (I.E. THE APPELLANT) IN SUPPO RT OF THE CONTENTION THAT C. G. ROAD SHOP (I.E. SHOP IN QUEST ION) IS BEING USED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND IS PUT TO USE DURING THE RELEVANT ACCOUNTING YEAR. HOWEVER, THE APPELLANT FAILED TO AVAIL OF THE OPPORTUNITY. THE A PPELLANT PRODUCED ONLY FIVE CLIENTS/CUSTOMERS ON 23.3.2006; THE STATEMENTS OF THEM WERE DULY RECORDED BY THE ASSESS ING OFFICER. PERUSAL OF THE STATEMENTS CLEARLY REVEALS CONTRADICTIONS IN TERMS. AND LAST BUT NOT LEAST, THE APPELLANT HAS ALREADY B EEN CONDUCTING THE SAME BUSINESS FROM MANEK CHOWK PREMI SES. NO BILLS SPECIFYING C. G. ROAD SHOP HAS BEEN PRINTE D. THE BILLS PRODUCED BY THE APPELLANT FOR VERIFICATION BY THE A SSESSING OFFICER BEAR THE ADDRESS OF MANEK CHOWK AND HAVE BE EN RENUMBERED FOR THE PURPOSE OF C. G. ROAD SHOP. FROM THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CRYST AL CLEAR THAT THE SHOP OF TH4E APPELLANT AT C. G. ROAD IS NO T USED FOR THE PURPOSE OF BUSINESS OR PROFESSION EVEN UP TO THE MO NTH OF JUNE, 2004; WHAT TO TALK OF RELEVANT ACCOUNTING YEA R. HENCE, THE ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 8 ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE APPELLANT FOR DEPRECIATION OF RS.13,13,700/- ON THE C. G. ROAD SHOP AND ADDED BACK TO THE TOTAL INCOME OF T HE APP ELLANT. THE ACTION OF THE ASSESSING OFFICER IS, HEREBY, CONFIRM ED ON THIS GROUND. WITH THE RESULT, THE APPEAL IS DISMISSED ON THIS GROUND. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 11. THE LEARNED AR REITERATED HIS SUBMISSIONS MADE BEFORE THE AUTHORITIES AND PRAYED THAT THE CLAIM OF DEPRECIATI ON OF RS.13,13,700/- MAY BE GRANTED. 12. THE LEARNED DR RELIED ON THE ORDERS OF THE AUT HORITIES BELOW AND PRAYED FOR CONFORMING THE ORDER OF THE LEARNED AO AND THE LEARNED CIT(A). 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY PERUSED ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIA LS ON RECORD INCLUDING THE PAPER BOOK CONTAINING 30 PAGES SUBMIT TED BY THE ASSESSEE. FROM THE ABOVE FACTS, IT IS APPARENT THAT TWO REVENUE AUTHORITIES ONE IN THE RANK OF INSPECTOR AND THE OT HER IN THE RANK OF INCOME TAX OFFICER HAD VISITED THE PREMISES MUCH LA TER AFTER THE CONCLUSION OF THE RELEVANT PREVIOUS YEAR AND PERSON ALLY OBSERVED THAT THE PREMISES ON WHICH THE ASSESSEE CLAIMED DEPRECIA TION WAS UNDER CONSTRUCTION AND NOT READY FOR OCCUPATION. THUS, TH OUGH THE ASSESSEE HAS PAID CONSIDERATION FOR PURCHASE OF THE ASSET, THE ASSET PER SAY HAD NOT COME INTO EXISTENCE. IN THESE CIRCU MSTANCES, THE RELIANCE PLACED BY THE ASSESSEE IN THE CASE KHIMJI VASHARAM & SONS, 209 ITR 993 AND ASHIMA SYNTEX, 251 ITR 133 (G UJ.) WOULD ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 9 NOT COME TO THE RESCUE OF THE ASSESSEE SINCE THE AS SETS WERE IN EXISTENCE THAT CASE UNLIKE IN THE CASE OF THE ASSES SEE WHERE THE SHOP WAS UNDER CONSTRUCTION AND, THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO CONFIRM THE ORDERS OF THE REVENUE AUT HORITIES. ACCORDINGLY, WE HEREBY CONFIRM THE ORDER OF THE LEA RNED CIT(A). CONCISE GROUND NO.1 OF THE ASSESSEE EXTRACTED HEREI N ABOVE IS HELD AGAINST THE ASSESSEE AND THEREBY DISMISSED. 14. GROUND NO.2: DISALLOWANCE OF GIFT OF RS.56,700,000/-. DURING THE ASSESSMENT PROCEEDINGS THE LEARNED AO NOTICED T HAT THE ASSESSEE HAD RECEIVED GIFT OF RS.56,70,000/- FROM S HRI SANDIP RATILAL PATNI. THE ASSESSEE WAS ASKED TO BE PRESENT ON A GI VEN DATE AND PRODUCE DETAILS OF THE DONOR AND HIS ANNUAL EARNING S ABROAD IN ORDER TO ASCERTAIN THE GENUINENESS OF THE TRANSACTION. HO WEVER, THE ASSESSEE FAILED TO BE PRESENT ON THE DATE OF HEARIN G, THEREFORE, THE LEARNED AO QUARRIED, AS TO WHY THE AMOUNT OF GIFT O F RS.56,70,000/- SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE VIDE HIS REPLY DATED 10-03-2006 EXPLAINED THAT SHRI SANDIP RATILAL PATNI IS HAVING HIS CONSTRUCTION BUSINESS AT DUBAI AND UK AND ALSO JEWELRY BUSINESS IN UK ALONG WITH DOCUMENTARY EVIDE NCES SUCH AS COPY OF PASSPORT, DECLARATION OF GIFT, PROOF FOR PA YMENT OF CUSTOM FOR GOLD BAR, INVOICE FOR PURCHASE OF GOLD BAR AT DUBAI , SUBSEQUENT SALE BILL OF GOLD BAR AT BOMBAY AND RECEIPT OF PAYMENT E TC. IT WAS SUBMITTED BY THE ASSESSEE THAT SHRI SANDIP RATILAL PATNI CAME TO INDIA ALONG WITH THE GOLD PURCHASED BY HIM IN DUBAI FOR WHICH CUSTOM DUTY WAS PAID AND SUBSEQUENTLY SOLD THE SAME AND TH E SALE PROCEEDS WAS DEPOSITED IN THE BANK WHICH WAS GIVEN AS GIFT T O THE ASSESSEE. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 10 HOWEVER, THE LEARNED AO WITH THE FOLLOWING OBSERVAT IONS TREATED THE GIFT AMOUNT OF RS.56,70,700/- AS UNEXPLAINED CASH C REDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. (I) THE ASSESSEE HAD NEITHER FURNISHED ANY DOCUMENT ARY EVIDENCE IN SUPPORT OF SOURCE OF INCOME OF THE DONO R FROM CONSTRUCTION ACTIVITIES IN DUBAI AND UK NOR HAD PRO VIDED ANY DOCUMENTARY EVIDENCE REGARDING INCOME OF SHRI PATNI. (II) THE DONOR STAYED IN UK AND HAD BUSINESS INTERE ST IN DUBAI. THE DONOR PURCHASED 9 KGS OF GOLD FROM DUBAI ON 25-12-2002 AND SOLD THE SAME TO RIDDHISIDDHI BULLIO NS LTD. AT MUMBAI ON THE SAME DAY. THE TELEPHONE NO. STATED IN BILL NO. 10 OF THE PARTY WAS FOUND NOT EX ISTING. THE DONOR IS ASSESSEES SON IN LAW WHO CAME TO AHMEDABAD AND OPENED A BANK ACCOUNT IN INDIAN OVERSEAS BANK, ASHRAM ROAD BRANCH ON 28-12-2002 AND SALE PROCEEDS OF GOLD WERE DEPOSITED IN THE SAME WH ICH HAD BEEN GIFTED TO THE ASSESSEE. HAD THE DONOR CAPA CITY TO DONATE SUCH A HUGE AMOUNT, HE COULD HAVE DONE TH E SAME THROUGH OVERDRAFT INSTEAD OF OPENING A BANK ACCOUNT AT AHMEDABAD FOR THE PURPOSE OF DONATION TO THE ASSESSEE. (III) THE DONOR HAD USED THE LOWER CUSTOM DUTY SCHE ME OF THE GOVERNMENT OF INDIA TO BRING GOLD INTO THE COUNTRY FOR HIS OWN BENEFIT. (IV) AS PER INDIAN TRADITION NO FATHER IN LAW TAKES GIFT FROM HIS OWN SON IN LAW. (V) THE ASSESSEE ADMITTED IN HIS SUBMISSION THAT TH ERE IS NO PROHIBITION IN TAKING GIFTS FROM SON IN LAW. THUS, THIS CONSTITUTES CORROBORATIVE EVIDENCE IN SUPPORT OF MECHANISM ADOPTED BY THE DONOR WHICH ESTABLISHES TH AT THE GIFT TAKEN WAS A FAKE ONE. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 11 15. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LEARNED CIT(A). THE LEARNED CIT(A) CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND THE OBSERVATIONS MADE BY HIS PREDECESS OR CONFIRMED THE ORDER OF THE LEARNED AO. DURING THE APPELLATE PROCEEDINGS, MY PREDECESSOR ACCEPTED THE COPY OF CERTIFICATE DATED 22.12.2002 I SSUED BY SOME SAMRAH GOLD FACTORY, L. L. C. DEIRA, DUBAI (UA E) AS AN EVIDENCE IN RESPECT OF THE CAPACITY OF MR. PATNI TO MAKE GIFT, THE EVIDENCE IN QUESTION WAS NOT PRODUCED BEFORE TH E ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . THE ASSESSING OFFICER WAS DULY DIRECTED TO EXAMINE THIS DOCUMENT AND SUBMIT HIS REMAND REPORT. AFTER GOING THROUGH T HE REMAND REPORT OF THE ASSESSING OFFICER; THE FACT EMERGES T HAT SHRI SANDIP RATILAL PATNI SIMPLY RELIES ON A CERTIFICATE DATED 22.12.2002 ISSUED BY SOME SAMRAH GOLD FACTORY, DUBA I. FURTHER, SHRI PATNI DOES NOT HAVE ANY BANK ACCOUNT AND TRANSACTIONS ARE MADE IN CASH THOUGH HE HAS STATED BEFORE THE ASSESSING OFFICER HAT HE EARNS (APPROX) RS.20 LACS DHIRAMS PER YEAR, BUT NO DOCUMENTARY EVIDENCE, WHATSOEVER, HAS BEEN FURNISHED TO SUBSTANTIATE HIS CLAIM. HE HAS NOT FUR NISHED ALSO TIN NUMBER. IN THE GIVEN FACTS AND CIRCUMSTANCES, T HE CAPACITY OF SHRI SANDIP RATILAL PATNI TO MAKE SUCH HUGE GIFT REMAINS UNPROVED. ABOVE ALL, INFORMATION WAS ALSO CALLED FO R FROM PURCHASER I.E. RIDDHI SIDDHI BULLION LTD., MUMBAI B Y THE ASSESSING OFFICER, BUT NO COMPLIANCE HAS BEEN MADE BY THE SAID PARTY. KEEPING IN VIEW THE ABOVE MENTIONED FACTS AND CIRCUMSTANCES, CREDITWORTHINESS, CAPACITY AND GENUI NENESS OF THE TRANSACTIONS IN RESPECT OF CASH CREDIT IN QUEST ION HAS NOT BEEN PROVED BY THE APPELLANT. IN THE GIVEN FACTS AN D CIRCUMSTANCES, THE ASSESSING OFFICER HAS RIGHTLY HE LD THE AMOUNT OF RS.56,70,000/- AS THE CASH CREDIT OF THE APPELLANT FROM UNDISCLOSED SOURCES AND THE SAME IS RIGHTLY AD DED IN THE TOTAL INCOME OF THE APPELLANT AS INCOME FROM UNDISC LOSED SOURCE U/S. 68 OF THE INCOME TAX ACT, 1961. WITH TH E RESULT THE ACTION OF THE ASSESSING OFFICER ON THIS GROUND IS, HEREBY CONFIRMED. HENCE THE APPEAL IS DISMISSED ON THIS GR OUND. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 12 AGGRIEVED BY THE AFORESAID FINDINGS OF THE LEARNED CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 16. THE LEARNED AR REITERATED HIS SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND ON THE OTHER HAND, THE LEAR NED DR RELIED UPON THE ORDERS OF THE AUTHORITIES AND PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SUSTAINED. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE MATERIALS ON RECORD BEFORE US ALONG WITH THE PA PER BOOK SUBMITTED BY THE ASSESSEE. FROM THE SUBMISSION OF T HE ASSESSEE, THE FOLLOWING FACTS EMERGE:- (I) THAT THE APPELLANT IS THE FATHER-IN-LAW OF THE DONOR AND THE SAME IS NOT DISPUTED. THE COMMENT OF THE REVENUE TH AT AS PER INDIAN TRADITION NO FATHER-IN-LAW TAKES GIF T FROM HIS SON-IN-LAW CANNOT BE CONSIDERED AS A RELEVANT FACT OR TO DISBELIEVE THE GIFT BESTOWED UPON BY THE DONOR TO T HE DONEE. FURTHER, IT IS PROVED THAT THERE IS A BINDIN G RELATIONSHIP BETWEEN THE DONOR AND THE DONEE. (II) SUFFICIENT DOCUMENTARY EVIDENCES ARE ADDUCED B Y THE DONOR FOR PURCHASE OF GOLD IN DUBAI AND IMPORT OF T HE SAME BY PAYMENT OF IMPORT DUTY (PAGE NO.24 TO 34 OF THE PAPER BOOK). (III) THERE IS ALSO ENOUGH DOCUMENTARY EVIDENCE TO ESTABLISH THAT THE DONOR HAD SOLD THE GOLD IN INDIA AND THE S AME IS NOT DISPUTED. (IV) THE DONOR HAD GIFTED RS.56,70,700/- BY WAY OF CHEQUE DRAWN ON INDIAN BANK (PAGE NO.37 OF THE PAPER BOOK) AND HAVE CONFIRMED THE SAME. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 13 (V) DOCUMENTARY EVIDENCES SUCH AS PASSPORT OF THE D ONOR ESTABLISHING HIS PRESENCE IN INDIA ETC. ARE ALSO PR OVED. 18. FROM THE ABOVE DETAILS, IT IS EVIDENT THAT THE APPELLANT HAD RECEIVED GENUINE GIFT FROM HIS SON-IN-LAW. WHEN THE ASSESSEE HAD GIVEN EXTENSIVE DOCUMENTARY EVIDENCES WITH RESPECT TO THE POSSESSION OF GOLD BY HIS SON-IN-LAW, IT WILL BE FA R-FETCHED TO MAKE A PRESUMPTION THAT THE SON-IN-LAW DID NOT HAVE SOURCE OF INCOME TO THE EXTENT OF RS.56,70,700/- IN ABSENCE OF HIS FURNISHI NG OF FINANCIAL STATEMENTS FOR EARNING INCOME IN DUBAI AND UK. ON P ERUSAL OF THE ASSESSMENT ORDER IT APPEARS THAT THE LEARNED AO HAS MADE A REFERENCE OF NON-PRODUCTION OF SUCH FINANCIAL STATE MENTS BY THE DONEE BUT THE FACT REMAINS THAT THE LEARNED AO HAD MADE A REQUISITION FOR PRODUCING THE SAME WITHIN A PERIOD OF THREE DAYS BY THE ASSESSEE WHICH IS HIGHLY IMPROBABLE TO EXECUTE. THE ASSESSEE HAD REPLIED TO THE LEARNED AO THAT HIS SON-IN-LAW WAS N OT IN INDIA DURING THAT PERIOD AND, THEREFORE, SOUGHT TIME FOR PRODUCI NG THE DETAILS CALLED FORWARDED BY THE LEARNED AO WHICH WAS TURNED DOWN A ND THE ASSESSMENT WAS COMPLETED. IT IS PERTINENT TO NOTE T HAT THE ASSESSEE HAD FURNISHED THE FOLLOWING DOCUMENTS/PARTICULARS B EFORE THE LEARNED AO:- (I) GIFT CHEQUE OF RS.56,70,700/- WHICH WAS RECEIVE D FROM THE ASSESSEES SON-IN-LAW SHRI SANDIP R. PATNI BY C HEQUE NO.95984 DATED 31-12-2002 DRAWN ON INDIAN OVERSEAS BANK, ASHRAM ROAD, AHMEDABAD, XEROX COPY OF THE SAME FORMS PAGE 37 OF THE PAPER BOOK AND IS NOT DISPUTED BY THE REVENUE. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 14 (II) XEROX COPY OF PASSPORT OF SHRI SANDIP R. PATNI WHICH ESTABLISHES THAT HE IS A BRITISH CITIZEN HOLDING MULTIPLE ENTRIES VISA TO INDIA WHICH FORMS PART OF PAGE NO.24 TO 29 OF THE PAPER BOOK. (III) DECLARATION OF GIFT BY SHRI SANDIP R. PATNI D ATED 01-01- 2003 WHICH IS DULY NOTARIZED BY THE NOTARY PUBLIC, THE XEROX COPY OF WHICH FORMS PART OF PAGE 30 AND 31 OF THE PAPER BOOK. (IV) PURCHASE INVOICE OF 9914.40 GRAMS OF GOLD FROM SIROYA JEWELERS L. L. C., DUBAI FOR AN AMOUNT OF US $ 1102 90.44 FORMS PART OF PAGE 34 OF THE PAPER BOOK. (V) XEROX COPY OF DOCUMENTS PERTAINING TO CUSTOMS D UTY PAID FOR IMPORT OF 9914.40 GRAMS OF GOLD (85 PIECES) FOR MS PART OF PAGE 32 AND 33 OF THE PAPER BOOK. (VI) XEROX COPY OF PURCHASE MEMO ISSUED BY RIDDHISI DDHI BULLIONS LTD. DATED 25-12-2002 AMOUNTING TO RS.55,84,500/- PERTAINING TO THE SALE OF 85 PIECES OF GOLD IMPORTED BY SHRI SANDIP R. PATNI AND DETAILS OF PAY MENT THEREON BY CHEQUE NO. 2003 DATED 25-12-2002 DRAWN O N HSBC BANK AND THE REMITTANCE SLIP OF THE ABOVE SAID CHEQUE IN INDIAN OVERSEAS BANK ON 28-12-2002 AND LEDGER ACCOUNT OF RIDDHISIDDHI BULLIONS LTD. FORMS PART OF PAGE 35, 36 AND 39 OF THE PAPER BOOK RESPECTIVELY. (VII) XEROX COPY OF THE GIFT CHEQUE OF RS.56,70,700 /- PAID BY SHRI SANDIP R. PATNI TO HIS FATHER-IN-LAW I.E. THE ASSESSEE FORMS PART OF PAGE 37 OF THE PAPER BOOK. (VIII) XEROX COPY OF THE CERTIFICATE ISSUED BY SAMR AH GOLD FACTORY, L. L. C., DUBAI, UAE DATED 22-12-2002 STAT ING THAT MR. SANDIP PATNI WAS PAID COMMISSION FOR SALES AND MARKETING ON THEIR BEHALF FOR AN AMOUNT OF US $ 115 432 FORMS PART OF PAGE 38 OF THE PAPER BOOK. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 15 19. THE LEARNED AO HAS SIMPLY BRUSHED ASIDE THESE V ALUABLE DOCUMENTS PRODUCED BY THE ASSESSEE WITHOUT EXAMININ G THE SANCTITY OF THE DOCUMENTS AND SIMPLY PRESUMED THAT THE GIFT RECEIVED BY THE ASSESSEE IS DUBIOUS. LOOKING AT THE FACTS AND CIRCU MSTANCES OF THE CASE AND THE DOCUMENTS PRODUCED BY THE ASSESSEE WHI CH WERE NOT DISPROVED BY THE LEARNED AO, WE ARE CONVINCED THAT THE ASSESSEE HAD RECEIVED GENUINE GIFT OF RS.56,70,700/- FROM HI S SON-IN-LAW AND, THEREFORE, DELETE THE ADDITION MADE BY THE REVENUE ON THIS ISSUE. ACCORDINGLY, GROUND NO.2 MENTIONED HEREIN ABOVE IS DECIDED IN FAVOUR OF THE ASSESSEE AND IS ALLOWED. 20. GROUND NO.3: DISALLOWANCE OF RS.2,31,000/- OUT OF SALARY EXPENSES:- DURING THE COURSE OF ASSESSMENT PROCEEDING THE LEARNED AO NOTICED THAT THE ASSESSEE HAD DEBITED SA LARY EXPENSES OF RS.4,20,000/-. THE LEARNED AO REQUIRED THE ASSESSEE TO FURNISH OBJECTION FOR DISALLOWANCE OF THE SAME. THE LEARNED AO REJECTED THE EXPLANATION OFFERED BY THE ASSESSEE AND FOLLOWING T HE DECISION OF THE LEARNED CIT(A)-VII AHMEDABAD FOR AY 2002-03 DISALLO WED THE SALARY EXPENSES AMOUNTING TO RS.2,31,000/- IN RESPECT OF T HE FOLLOWING PERSONS AND ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE. 1. VIDULABEN J SONI RS.33,000/- 2. HEENABEN V. CHOKSY RS.66,000/- 3. HONEYBEN P. SONI RS.66,000/- 4. JONYBEN A SONI RS.66,000/- 21. ON APPEAL BEFORE THE LEARNED CIT(A), HE CONFIRM ED THE ORDER OF THE LEARNED AO FOLLOWING THE ORDER OF HIS PREDECESS OR IN AY 2002-03 ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 16 ON IDENTICAL ISSUE AND DISMISSED THE GROUND OF APPE AL OF THE ASSESSEE. 22. THE LEARNED AR SUBMITTED BEFORE US THAT THE LEA RNED AO DISALLOWED THE SALARY EXPENSES OF RS.2,31,000/- FOL LOWING THE DECISION OF LEARNED CIT(A) IN THE CASE OF THE ASSES SEE FOR AY 2002- 03 WITHOUT ANY FURTHER FINDING ON THIS REGARD AND T HE LEARNED CIT(A) HAS ALSO CONFIRMED THE ACTION OF THE LEARNED AO BY FOLLOWING THE DECISION OF HIS PREDECESSOR WITHOUT GIVING ANY SPEC IFIC VALID REASONS. IT WAS THEREFORE, PRAYED THAT THE ORDER OF THE REVE NUE AUTHORITIES MAY BE SET ASIDE AND THE PAYMENT MADE ON ACCOUNT OF SAL ARY FOR RS.2,31,000/- MAY BE ALLOWED AS DEDUCTION. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE MATERIAL ON RECORD. IT APPEARS THAT THE REVENUE HAD DISALLOWED THE PAYMENT MADE ON ACCOUNT OF SALARY FOR RS.2,31,000/- SINCE THE ASSESSEE COULD NOT ESTABLISH THAT THESE PAYMENTS WE RE GENUINE. THE ASSESSEE COULD NOT ESTABLISH THAT ANY WORK WAS PERF ORMED BY THE RELEVANT FOUR EMPLOYEES FOR WHOM AN AGGREGATE AMOUN T OF RS.2,31,000/- WAS PAID. THE LEARNED AO AS WELL AS T HE LEARNED CIT(A) FOR TWO CONSECUTIVE YEARS HAVE ARRIVED AT TH E SAME DECISION BY DISALLOWING THE PAYMENT MADE TO THESE EMPLOYEES. BEFORE US, THE ASSESSEE HAS NOT PRODUCED ANY MATERIALS TO SUBSTANT IATE HIS CLAIM THAT THE PAYMENTS MADE TO THE EMPLOYEES ARE GENUINE . IN PAGE 14 AND 15 OF THE PAPER BOOK, THE ASSESSEE HAS ONLY MAD E ONLY A SUBMISSION THAT THE PAYMENTS TO THESE EMPLOYEES WER E BONAFIDE; HOWEVER THE SAME IS NOT SUPPORTED WITH ANY OTHER CO GENT EVIDENCE IN ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 17 ORDER TO ESTABLISH THE CLAIM OF THE ASSESSEE. IN TH ESE CIRCUMSTANCES, WE DO NOT HAVE ANY OTHER OPTION BUT TO CONFIRM THE ORDERS OF THE REVENUE. ACCORDINGLY, GROUND NO. 3 MENTIONED HEREIN ABOVE IS HELD AGAINST THE ASSESSEE AND THIS GROUND IS DISMIS SED. 24. GROUND NO.4: DISALLOWANCE OF RS.20,000/- ON ACCOUNT OF CAR EXPENSES AND RS.65,000/- TOWARDS CAR DEPRECIATION:- THE LEARNED AO NOTICED THAT THE ASSESSEE DEBITED CAR EXPENSES O F RS.1,34,281/- IN HIS BOOKS OF ACCOUNTS. SINCE THE ASSESSEE DID NO T MAINTAIN ANY LOG BOOK FOR PERSONAL USE OF THE CAR THE LEARNED AO DIS ALLOWED RS.25,000/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON THE SAME BASIS, THE LEARNED AO HAD ALSO DISALLOWED A SUM OF RS.65,000/- OUT OF THE TOTAL CLAIM OF RS.3,28,812/ - AGAINST DEPRECIATION OF CAR. THE LEARNED CIT(A) CONSIDERING THE SUBMISSION OF THE ASSESSEE AND KEEPING IN VIEW THE STATUS, SIZE A ND VOLUME OF THE BUSINESS OF THE ASSESSEE CONFIRMED THE ADDITION MAD E BY THE ASSESSEE ON THESE COUNTS. 25. BEFORE US THE LEARNED AR REITERATED THE SUBMISS IONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER RELYING ON THE DECISION OF THE JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE REPOR TED IN 197 ITR 538 (GUJ) THAT DISALLOWANCE OF CAR EXPENSES IS ILLEGAL AS PER THE PROVISIONS OF SECTION 31 OF THE IT ACT AND AS PER SECTION 37 ( 1) OF THE ACT PLEADED THAT THE EXPENDITURE CLAIMED BY THE ASSESSE E CANNOT BE DISALLOWED AND PRAYED THAT THE SAME MAY BE DELETED. WITH REGARD TO THE CLAIM OF THE ASSESSEE IN RESPECT OF DEPRECIATIO N ON CAR AMOUNTING ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 18 TO RS.3,28,212/-, THE LEARNED AR SUBMITTED THAT THE DISALLOWANCE OF RS.65,000/- IS TOO HIGH AND THE SAME MAY BE RESTRIC TED TO 10%. 26. THE LEARNED DR RELIED ON THE ORDERS OF THE AUTH ORITIES BELOW AND PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE UPHELD. 27. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDE RED THE MATERIALS ON RECORD. BEFORE US THE LEARNED AR OR TH E ASSESSEE DID NOT COME OUT WITH ANY COGENT MATERIALS OR ARGUMENTS TO DEFEND THEIR CASE ON THIS ISSUE OTHER THAN CITING THE DECISION OF THE CASE REPORTED IN 197 ITR 538 (GUJ) CIT V/S. AHMEDABAD MFG. AND C ALICO PRINTING CO. LTD. ON A CLOSE READING OF THE CASE REFERRED BY THE LEARNED AR SUPRA WE FIND THAT THE FACTS OF THE CASE ARE NOT RE LEVANT TO THE FACTS OF THE PRESENT CASE BEFORE US. THEREFORE WE HEREBY CON FIRM THE ORDERS OF THE REVENUE ON THIS COUNT. THUS GROUND NO.4 MENTIONED HEREIN ABOVE IS DECIDED AGAINST THE ASSESSEE AND THEREFORE DISMISSED. 28. GROUND NO.5:- DISALLOWANCE OF RS.25,000/- IN RESPECT OF TELEPHONE EXPENSES:- THE LEARNED AO NOTICED THAT THE ASSESSEE HAS DEBITED TELEPHONE EXPENSES OF RS.1,26,313/- IN HIS BOOKS OF ACCOUNTS. SINCE, THE ASSESSEE DID NOT MAINTAIN ANY LOG BOOK SEPARATELY FOR RECORDING PERSONAL USE OF THE TELEPH ONE, THE LEARNED AO DISALLOWED AN AMOUNT OF RS.25,000/- OUT OF THE A FORESAID TOTAL EXPENSES SHOWN BY THE ASSESSEE AND ADDED THE SAME T O THE INCOME OF THE ASSESSEE. THE LEARNED CIT(A) CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ADMISSION ON THE PART OF THE ASSESSEE THAT THE DISALLOWANCE MAY BE RESTRICTED TO 10% TOWARDS PERSONAL USE, CONFIRMED THE ORDER OF THE LEARNED A O. ITA NO.3972/AHD/2008 (AY: 2003-04) ARVINDBHAI DHANJIBHAI CHOKSHI VS ITO, W-3 (2), AHME DABAD 19 29. HAVING HEARD THE RIVAL SUBMISSION AND CONSIDERI NG THE FACT THAT ASSESSEE HIMSELF ADMITTED FOR HAVING USED THE TELEP HONE FOR PERSONAL PURPOSE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) SINCE THE AMOUNT OF RS. 25,000/- APP EARS TO BE REASONABLE. THEREFORE WE HEREBY CONFIRM HIS ORDER AND DISMISS GROUND NO.5 MENTIONED HEREINABOVE. 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27-11-2012. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA DEKA DEKA DEKA / // / 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 ASST. REGISTRAR, ITAT, AHME DABAD 1. DATE OF DICTATION: 31-10 -12/05-11-12 DIRECT O N COMPUTER 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 15-05-2012/08-11-12 OTHER MEMBE R: 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: 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: