The DCIT, Central Circle-2(2), Ahmedabad V. Shri Aspi Noshir Gandhi, Ahmedabad

ITA 3973/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2235 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: UMAID SINGH BHATTI
• Keywords: Unexplained investment; Set aside
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.3973/AHD/2008 ASSESSMENT YEAR:2005-06 DATE OF HEARING:12.1.11 DRAFTED:17.1.11 DCIT, CENTRAL CIRCLE- 2(2), AHMEDABAD V/S . SHRI ASPI NOSHIR GANDHI, 16, GOLDEN TULIP BUNGALOW, AMBAWADI VISTAR, AHMEDABAD PAN NO.ACVPG3852B (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI ROBIN RAWAL, DR RESPONDENT BY:- SHRI UMAID SINGH BHATTI, AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-III, AHMEDABAD IN APPEAL NO .CIT(A)-III/97/DCIT-CC- 2(2)/07-08 DATED 29-09-2008. THE ASSESSMENT WAS FRA MED BY DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD U/S153A R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 31-12-2007 FOR ASSESSMENT YEAR 2005-06. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT FOUND DURING THE COURSE OF SEARCH. FOR T HIS, EFFECTIVE GROUND RAISED BY REVENUE, WHICH READS AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.10,00,000/- MADE ON ACCOUNT OF UNEX PLAINED INVESTMENT IN SHOPS. ITA NO.3973/AHD/2008 A.Y 2005-06 DCIT,CC-2(2), ABD V. SH ASPIS N GANDHI PAGE 2 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED F ROM THE SEIZED PAPERS PAGES 12 AND 33 OF ANNEXURE-A/1 FOUND FROM THE RESIDENCE OF ASSESS EE DURING SEARCH ON 22-09-2005 U/S 132 OF THE ACT THAT THE ASSESSEE MADE INVESTMENT OF RS.27.50 LAKH IN ACQUISITION OF THREE SHOPS. ACCORDING TO ASSESSING OFFICER, ASSESSEE HAD MADE PAYMENT OF RS. 17.50 LAKH IN THE ACQUISITION OF THREE SHOPS BY ACCOUNT PAYEE CHEQUES AND RECORDED IN THE BOOKS OF ACCOUNT BUT PAID A SUM OF RS.10 LAKH BY CA SH OUT OF BOOKS OF ACCOUNT AND OUT OF UNDISCLOSED SOURCE OF INCOME. AC CORDING TO THE ASSESSING OFFICER, ASSESSEE ADMITTED THIS FACT WHILE DEPOSING U/S 132(4) AND IN HIS STATEMENT ADMITTED TO HAVE MADE PAYMENT OF RS.10 LA KH IN CASH TO M/S. KOTHI SONS FOR RENOVATION AND EXTENSION BUT SUBSEQUENTLY BY FILING AN AFFIDAVIT ON 26-12-2007 STATED THAT THIS PAYMENT OF RS.10 LAKH W AS MADE TO SOME OTHER PERSON. IN THIS AFFIDAVIT ASSESSEE ALSO EXPLAINED T HE SOURCE OF CASH INVESTMENT AND ACQUISITION OF THESE SHOPS AS CASH-I N-HAND GENERATED FROM THE BANK WITHDRAWALS DURING THE RELEVANT PREVIOUS YEAR. THE ASSESSEE CLAIMED THAT THE DEPOSIT IN THE BANK ACCOUNT HAS ALREADY BE EN OFFERED FOR TAXATION IN ASSESSMENT YEAR 2004-05 AT RS.24 LAKH AND IN ASSESS MENT YEAR 2005-06 AT RS.79 LAKH, AS PEAK, WHICH EXPLAINS CASH OF RS.10 L AKH, WHICH WERE INVESTED FOR THE PURCHASE OF THESE SHOPS. THE ASSESSING OFFI CER, IN VIEW OF THE STATEMENT RECORDED U/S.132(4), WHEREBY THE ASSESSEE ADMITTED TO HAVE INVESTED OF RS 10 LAKH FOR ACQUISITION OF SHOPS OUT OF UNDISCLOSED SOURCE, MADE ADDITION. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) DELETED THE ADDITION BY GIVING FOLLOWING FIN DINGS IN PARA-7 OF HIS APPELLATE ORDER:- 7. THE CONTENTIONS WERE CAREFULLY CONSIDERED. IT I S SEEN FROM THE DETAILS OF CASH FLOW, THAT THE APPELLANT HAD DEPOSITED CASH AMOUNTS IN FIVE DIFFERENT BANK ACCOUNTS BETWEEN THE PERIOD 2/2/2004 TO 30/9/2004. THE PEAK OF THE CASH DEPOSIT WORKED OUT TO RS.23,98,000 /- AS ON18/3/2004. THE AMOUNT OF RS.24 LAKHS WAS ACCORDINGLY OFFERED F OR TAXATION IN THE ASSESSMENT YEAR 2004-05. SIMILARLY, RS.79,000/- WAS OFFERED ON THE BASIS OF PEAK DEPOSITS IN THE ASSESSMENT YEAR 2005- 06. FROM THE ITA NO.3973/AHD/2008 A.Y 2005-06 DCIT,CC-2(2), ABD V. SH ASPIS N GANDHI PAGE 3 DETAILS OF THE DEPOSITS/WITHDRAWALS OF THESE BANK A CCOUNTS, FILED IN FORM OF A CHART (ALSO FILED BEFORE THE A.O), IT IS SEEN THAT SUBSEQUENTLY THERE ONLY WITHDRAWALS FROM THESE BANK ACCOUNTS W.E.F. 15 /9/2004. AS PER THESE DETAILS, AMOUNT OVER RS.11 LAKHS HAD BEEN WIT HDRAWN BETWEEN THE PERIOD 15/9/2004 TO 24/9/2004 OUT OF WHICH THE CASH PAYMENT OF RS.10 LAKHS HAD BEEN MADE, AS STATED. CONSIDERING T HESE DETAILS IT IS APPARENT THAT THE SOURCE OF THE PAYMENT OF RS.10 LA KHS WAS FROM OUT OF EXPLAINED/DECLARED SOURCE. HENCE THE ADDITION MADE BY THE A.O WAS NOT WARRANTED. IT IS THEREFORE DELETED. HENCE THE G ROUNDS OF APPEAL ARE ALLOWED. AGGRIEVED, NOW REVENUE CAME IN APPEAL BEFORE TRIBUN AL. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US LD. COUNSEL FO R THE ASSESSEE, SHRI UMAID SINGH BHATTI REFERRED TO CASH FLOW STATEMENT OF UNDISCLOSED MONEY DECLARED BY ASSESSEE, WHEREBY HE NARRATED THE DEPOS ITS AND WITHDRAWALS IN FIVE BANK ACCOUNTS AND TRIED TO EXPLAIN THAT THE AS SESSEE HAS DISCLOSED A SUM OF RS.24 LAKH IN ASSESSMENT YEAR 2004-05 AND RS.79 THOUSAND IN ASSESSMENT YEAR 2005-06, WHICH ESTABLISHED THAT IT HAD INVESTE D THE SAME IN ACQUISITION OF SHOPS RS.10 LAKHS CASH. THE ASSESSEE PARTICULARLY D RAWN OUT ATTENTION TO WITHDRAWALS MADE IN ASSESSMENT YEAR 2005-06 OF RS.1 1.50 LAKH AND OUT OF WHICH RS.10 LAKH CASH WAS INVESTED. THE ASSESSEE HA S GIVEN DATES OF WITHDRAWAL FROM 15-09-2004 TO 24-09-2004 BUT IT IS NOT CLEAR WHEN THE ASSESSEE HAS MADE THIS INVESTMENT OF RS.10 LAKH IN CASH IN ACQUISITION OF THESE SHOPS OUT OF TOTAL PAYMENTS OF RS.27.50 LAKH. THE ASSESSEES CLAIM BEFORE US IS THAT HE HAD FILED THESE CASH STATEMENT BEFORE THE ASSESSING OFFICER BUT THE AO HAS NOT GIVEN ANY FINDING ON THE SAME. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE, SHRI ROBIN RAWAL PO INTED OUT THAT LET THIS PEAK ADDITION, WHETHER THE SAME IS WITHDRAWN IN CAS H FROM THE BANK ACCOUNTS, CAN BE VERIFIED AT THE LEVEL OF ASSESSING OFFICER A ND FOR THIS PURPOSE, THE ISSUE CAN BE REMITTED BACK TO THE FILE OF ASSESSING OFFIC ER. WE ARE IN FULL AGREEMENT WITH THE PLEA OF LD. DR AND LET THE AO VERIFY WHETH ER THIS PEAK DECLARATION OF RS.24 LAKH AND RS.79 THOUSAND IN THESE TWO ASSESSME NT YEARS IS AVAILABLE IN ITA NO.3973/AHD/2008 A.Y 2005-06 DCIT,CC-2(2), ABD V. SH ASPIS N GANDHI PAGE 4 THE SHAPE OF CASH OR NOT, AND PARTICULARLY AS POINT ED OUT BY LD. COUNSEL FOR THE ASSESSEE THAT IT IS AVAILABLE W.E.F. 15-09-2004 TO 24-09-2004 OF RS.11.65 LAKH. LET THE ASSESSING OFFICER VERIFY THIS FACT FROM BAN K ACCOUNTS AND FIND OUT WHETHER THE ASSESSEE HAD INVESTED THIS CASH ELSEWHE RE AND IN THAT EVENTUALITY HE WILL NOT ALLOW BENEFIT OF AVAILABILI TY OF CASH. IN CASE, IT IS PROVED THAT CASH IS NOT INVESTED ELSEWHERE, THE ASSESSING OFFICER WILL ALLOW THE BENEFIT OF PEAK TO BE INVESTED IN ACQUISITION OF TH ESE SHOPS OF RS.10 LAKH. ACCORDINGLY, THIS ISSUE OF REVENUES APPEAL IS SET ASIDE TO THE FILE OF ASSESSING OFFICER AND ALLOWED FOR STATISTICAL PURPO SES AS INDICATED ABOVE. 5. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 21/01/2011 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 21/01/2011 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-III, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD