The DCIT, Circle-9, Surat V. Shri Jitendra S.Navadia, Surat

ITA 412/AHD/2012

• Counselvise Citation: 41220514 RSA 2012
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: R N VEPARI
• Keywords: Rejection of books of accounts; Unexplained investment; Valuation report
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI KUL BHARA T, JUDICIAL MEMBER THE DEPUTY COMMISSIONER OF INCOME TAX (APPELLANT) VS. SRI JITENDRA S NAVADIYA (RESPONDENT) PAN NO. ABBPN9227G REVENUE BY : SHRI D.K. SINGH, SR. D.R. ASSESSEE BY : SHRI R.N. VEPARI, A.R. DATE OF HEARING : 02-08-2012 DATE OF PRONOUNCEMENT : 16-10-2012 / ORDER PER : KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-V SURAT, DATED 17-10-2010. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE REGARDING REJECTING THE BOOKS OF ACCOUNT BY THE A.O . U/S 145(3) OF THE I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 88,04,160/- MADE BY THE A.O. ON A/C. OF UNACCOUNTED INVESTMENT U/S. 69B OF THE ACT. I.T.A. NO 412/AHD/2012 A.Y.:-2008-09 ITA NO. 412/AHD/2012 A.Y. 2012 PAGE NO. THE DY COMMISSIONER OF INCOME VS. JITENDRA S NAVADI YA 2 3. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A), OUGHT TO HAVE UP HELD THE ORDER OF THE A.O. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) BE SET- ASIDE AND THAT OF THE A.O. BE RESTORED. 2. THE BRIEFLY, STATED FACTS ARE THAT THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME T AX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) WAS FINALI ZED WHEREBY THE ASSESSING OFFICER REJECTED BOOKS OF ACCOUNT OF THE ASSESSEE A ND MADE ADDITION U/S 69B OF RS. 88,04,160/- AND LOW HOUSEHOLD EXPENSES OF R S. 1,30,000/-. AGAINST THIS, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE L D. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL. 3. THE FIRST GROUND IS AGAINST NOT CONFIRMING THE A CTION OF THE A.O. IN RESPECT OF REJECTION OF BOOKS OF ACCOUNTS. LD. SR. D.R. SUBMITTED THAT THE AO HAD NOTICED IRREGULARITIES IN RESPECT OF NOT MAK ING PROPER ENTRY INTO THE DAILY PATIENT REGISTER. HE CONTENDED THAT THE AO H AS CHARGED USING KACHCHA CHITTHI (SLIPS) AND SAME ACTIONS AS THE ENTRY REGIS TER RECORDING. MOREOVER, THE REGISTER WAS NOT MAINTAINED IN THE PRESCRIBED F ORMAT. ON THE CONTRARY, LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE DISCRE PANCIES AS NOTICED BY THE AO RELATED TO OTHER YEAR AND NOT MAINTAINING OF REG ISTER IN FORM 3C CANNOT BE THE GROUND FOR REJECTION OF BOOKS OF ACCOUNT. H E STRONGLY RELIED ON THE ORDER OF LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. CIT(A) HAS DECIDED THIS ISSUE AS UNDER: - I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL A S THE SUBMISSION OF THE APPELLANT. THE APPELLANT'S CLINIC WAS COVERED BY SURVEY U/S. 133A ON 21.08,2009, IT WAS FOUND THAT L IST OF PATIENT ITA NO. 412/AHD/2012 A.Y. 2012 PAGE NO. THE DY COMMISSIONER OF INCOME VS. JITENDRA S NAVADI YA 3 WAS MAINTAINED ON PLAIN PAPER TERMED LL KACHHA CHITTI'. IT WAS ALSO FOUND THAT ONLY ONE PATIENT'S NAME WAS ENTERED IN T HE BOOKS OF ACCOUNT MAINTAINED ON COMPUTER INSTEAD OF SIX PATIE NTS AS FOUND IN 'KACHHA CHITTI' DTD. 15.09.2007. IN THE STATEMEN T RECORDED OF THE APPELLANT, IT WAS CLARIFIED THAT ON THAT DAY I WAS NOT WELL, HENCE, IT REMAINED TO BE ENTERED. WHEN ASKED ABOUT THE RECORD OF 'KACHHA CHITTI', IT WAS STATED THAT AFTER ENTERING INTO THE COMPUTER THE CHITTI ARE DESTROYED. ON THE BASIS OF THESE TWO INFORMATIO N I.E. FOR ONE INSTANCE OF NOT ENTERING THE FIVE PATIENTS NAME AND DESTROYING THE KACHHA CHITTI, THE A.O. CONCLUDED THAT BOOKS OF ACCOUNT ARE NOT RELIABLE AND HE REJECTED THE BOOKS OF ACCOUNT FOR THE A.Y, IN QUESTION TOO, ALTHOUGH THESE DISCREPANCIES ARE RELA TED TO A.Y. 2010-11. I AN INCLINED TO AGREE WITH THE APPELLANT'S SUBMISS ION THAT THE BOOKS OF ACCOUNT CANNOT BE REJECTED DUE TO FOLLOWING REAS ONS: I. THE DISCREPANCIES ON THE BASIS OF WHICH THE A.O. WENT AHEAD IN REJECTING THE BOOKS OF ACCOUNT ARE NOT RELATED TO T HE A.Y, CONCERNED AT ALL. SUCH ACTION IS NOT PERMITTED UNDE R LAW. II. ONLY ON A SINGLE ALLEGED DISCREPANCY I.E. ONLY ONE PATIENT'S NAME WAS ENTERED IN THE BOOKS OF ACCOUNT MAINTAINED ON COMPUTER INSTEAD OF SIX PATIENTS AS FOUND IN KACHHA CHITTI DTD. 15.09.2007, FOUND DURING THE SURVEY, THE BOOKS OF A CCOUNT CANNOT BE REJECTED. SECONDLY, IF AT ALL SUCH PRIMARY EVIDE NCE WAS REGULARLY DESTROYED AS ALLEGED BY THE A.O. IS CORRE CT THEN THE PRESENCE OF RECORD OF 15.09.2007 GOES IN FAVOUR OF THE APPELLANT NOT AGAINST THE APPELLANT BECAUSE IF HE WAS DESTROY ING ON REGULAR BASIS, THIS EVIDENCE ALSO WOULD NOT HAVE BEEN FOUND . THIS SUPPORTS HIS STATEMENT IN WHICH HE STATED THAT HE C OULD NOT ENTER THE SAME AS HE WAS NOT WELL AT THAT DATE. 5. SINCE, THE LD. CIT(A) HAS GIVEN A FINDING OF FAC T THAT THE ASSESSING OFFICER REJECTED BOOKS OF ACCOUNTS ON THE BASIS OF THE DISCREPANCIES PERTAINING TO OTHER YEARS. THIS FINDINGS OF FACT, HAS NOT BEEN CONTROVERTED BY THE REVENUE. THEREFORE, WE DO NOT FIND ANY INFIRMI TY INTO THE ORDER OF LD. CIT(A), THIS GROUND OF REVENUES APPEAL IS REJECT ED. ITA NO. 412/AHD/2012 A.Y. 2012 PAGE NO. THE DY COMMISSIONER OF INCOME VS. JITENDRA S NAVADI YA 4 6. THE NEXT GROUND OF APPEAL IS AGAINST THE DELETIO N OF ADDITION OF 88,04,160/- MADE BY THE ASSESSING OFFICER IN RESPEC T OF UNACCOUNTED INVESTMENT U/S 69B OF THE ACT. LD. SR. D.R. VEHEME NTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED THAT THE AS SESSEE HAS NOT GIVEN A TRUE VALUE OF THE PROPERTY. THEREFORE, THE ASSESSING OF FICER ESTIMATED THE VALUE ON HIS OWN. ON THE CONTRARY, LD. COUNSEL FOR THE A SSESSEE HEAVILY RELIED ON THE ORDER OF LD. CIT(A). HE SUBMITTED THAT THE ISS UE IS DECIDED IN FAVOUR OF THE ASSESSEE ON THE BASIS OF VARIOUS JUDICIAL PRONO UNCEMENTS. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE ORDER OF THE HON BLE CO-ORDINATE BENCH RENDERED IN HARLEY STREET PHARMACEUTICALS LIMITED [ 38-SOT-486] AND ALSO IN THE CASE OF ROSHAN ALIAS RAKESH G. SHAH VS. CIT (1 995) 53 TTJ] 267. HE ALSO RELIED ON THE ORDER OF THE JODHPUR BENCH OF T HIS TRIBUNAL RENDERED IN THE CASE OF ITO VS. DINESH BAJAJ (2003) DTR 341. IN SU PPORT OF THE CONTENTION THAT ADDITION U/S 69B OF THE ACT COULD NOT BE MADE SIMPLY ON THE BASIS OF THE VALUATION ADOPTED BY THE SUB-REGISTRAR FOR STAMP DU TY PURPOSE WITHOUT ANY OTHER EVIDENCE. HE ALSO RELIED ON THE DECISION OF THE HONBLE PANJAB & HARYANA HIGH COURT IN THE CASE OF SATINEDER KUMAR V IDY RATTAN (2001) 250 ITR 484. IN SUPPORT OF THE CONTENTION THAT NO MATE RIAL EVIDENCE TO SHOW THAT THE ASSESSEE MADE INVESTMENT ABOVE THE RECORDED SAL E PRICE. IN THE ABSENCE OF SUCH EVIDENCE AND INVESTMENT NOT HAVING PROVED NO ADDITION TO BE MADE U/S 69B. HE ALSO RELIED ON VARIOUS OTHER DECISIONS IN SUPPORT OF THE CONTENTIONS THAT THE ADDITION CANNOT BE MADE MERELY ON THE BASIS OF VALUATION REPORT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. CIT(A) HAS OBSERVED THAT EITHER DURING THE SURVEY PROCEEDINGS OR ASSESSMENT PROCEEDINGS NOT A SINGLE EVIDENCE WAS BROUGHT ON RECORD ITA NO. 412/AHD/2012 A.Y. 2012 PAGE NO. THE DY COMMISSIONER OF INCOME VS. JITENDRA S NAVADI YA 5 WHICH INDICATE THAT THE APPELLANT HAS PAID ANY AMOU NT TO THE SELLER OVER AND ABOVE THE AGREEMENT PRICE. THE AO HAS MADE AN ADDI TION ON THE BASIS OF THE STATEMENT OF REGISTERED VALUAR AND THE JANTRI PRICE . THIS IS NOT CONTROVERED BY THE REVENUE. LEARNED COUNSEL FOR THE ASSESSEE H AS PLACED RELIANCE ON THE ORDER OF THE HONBLE CO-ORDINATE BENCH RENDERED IN THE CASE OF DY CIT VS. SURESHBHAI VALJI KUKADIA IN ITA NO. 368/AHD/2010 WH ERE THE HONBLE CO- ORDINATE BENCH OBSERVED THAT THE REVENUE FAILED TO POINT OUT ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS SPENT MORE AMOUNT THAN C LAIMED BY THE ASSESSEE. IN THE CASE IN HAND ALSO THERE IS NO EVIDENCE BROUG HT ON RECORD BY THE REVENUE THAT THE ASSESSEE HAD IN FACT PAID MORE THA N THE AMOUNT DECLARED IN THE SALE DEED. MOREOVER, THE ASSESSING OFFICER HAS NOT EVEN ADOPTED JANTRY VALUE OF THE PROPERTY AND PROCEEDED TO MAKE ESTIMAT ION ON HIS OWN. UNDER THESE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY I NFIRMITY INTO THE ORDER OF LD. CIT(A), HENCE THIS GROUND OF THE REVENUES APPE AL IS DISMISSED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A. MOHAN ALANKAMONY) (KUL BHARAT) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD : DATED 16 /10/2012 A.K. ITA NO. 412/AHD/2012 A.Y. 2012 PAGE NO. THE DY COMMISSIONER OF INCOME VS. JITENDRA S NAVADI YA 6 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A)-III, BARODA 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *