The ITO, Ward-9(2), Surat V. Jayesh Chandulal Shah,HUF, Surat

ITA 4362/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9755 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-08-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 10-12-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHUBNESH KULSHRESTHA
• Keywords: Opportunity of being heard
• Section: 133A; 148; 144

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M INCOME-TAX OFFICER, WARD 9(2), ROOM NO.421, AAYKAR BHAVAN, MAJURA GATE, SURAT. VS. JAYESH CHANDULAL SHAH HUF, 110, SANTOK APARTMENT, VARACHHA ROAD, SURAT. (APPELLANT) .. (RESPONDENT) REVENUE BY :- SHRI BHUBNESH KULSHRESTHA, DR ASSESSEE BY:- NONE. O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOL LOWING GROUND:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .9,00,000/- MADE BY THE AO UNDER THE HEAD ENHANCEMENT OF OPENI NG CAPITAL BALANCE WITHOUT APPRECIATING THE VARIOUS D EFICIENCIES DETECTED BY THE AO. 2. THE FACTS OF THE CASE ARE THAT A SURVEY UNDER SE CTION 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF SHRI PANKAJ DANAWALA, C.A. CERTAIN DOCUMENTS WERE FOUND IN A FILE MARKED AS FI LE NO.3033 WHICH INDICATED THAT IN ASST. YEAR 1999-00 THE ASSESSEE H AD SHOWN CLOSING CAPITAL AT RS.4,39,404/- WHEREAS IN ASST. YEAR 2000 -01 OPENING CAPITAL WAS SHOWN AT RS.13,39,404/-. THUS THERE WAS A JUMP OF RS.9 LAKHS. THE ASSESSEE HAD FILED RETURN OF INCOME FOR ASST. YEAR 2000-01 DECLARING INCOME OF RS.54,720/- WHEREIN OPENING CAPITAL WAS S HOWN AT ITA NO.4362/AHD/2007 ASST. YEAR :2001-01 2 RS.13,39,404/-. THE RETURN WAS EARLIER ACCEPTED UND ER SECTION 143(1) BUT AFTER SURVEY AT THE PREMISES OF SHRI DANAWALA NOTIC E UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE ON 22.12.2006. APPARENTL Y NONE APPEARED BEFORE THE AO. EVEN THOUGH AO HAD ISSUED SEVERAL NO TICES TO THE ASSESSEE TO EXPLAIN WHY THERE WAS ENHANCEMENT IN CA PITAL. THE RETURN WAS ALSO NOT FILED IN RESPONSE TO NOTICE UNDER SECTION 148 AND ACCORDINGLY ASSESSMENT WAS FINALIZED UNDER SECTION 144 BY TREAT ING SUM OF RS. 9 LAKHS AS UNDISCLOSED INCOME FOR AY2000-01. IT WAS DELETED BY LD. CIT(A) ON THE GROUND THAT ONLY FIGURES ARE CREATED IN A CLAND ESTINE MANNER AND AO HAS NOT EXAMINED THE BOOKS OF ACCOUNT. FURTHER THE C.A. IS HIMSELF STATING THAT HE HAS CREATED THE ACCOUNTS, THEREFORE , LOOSE SHEETS CANNOT BE TREATED AS ENTRIES IN ASSESSEES OWN BOOKS. FURTHER ACCORDING TO THE LD. CIT(A) THERE IS NO BENEFICIARY IN THIS CASE. 3. THE LD. DR SUBMITTED THAT ASSESSEE IS NON-CO-OPE RATIVE. HE NEITHER APPEARED BEFORE THE AO NOR BEFORE THE LD.CIT(A). BU T THE LD. CIT(A) HAS WITHOUT REASON DELETED THE ADDITION. THE ASSESSEE H AS FILED THE RETURN OF INCOME DECLARING CAPITAL AND IT WAS THE DUTY OF THE ASSESSEE TO EXPLAIN THE DIFFERENCE. SINCE ALL THE MATERIAL FACTS WERE NOT D ISCLOSED BEFORE THE AO IN THE ORIGINAL RETURN OF INCOME ORIGINALLY FILED, THE AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT AS WELL AS MAKING THE ADDI TION BECAUSE ASSESSEE HAS TAKEN THE BENEFIT OF ENHANCEMENT OF CAPITAL BY SHOWING VARIOUS ASSETS IN THE BALANCE SHEET. 4. NONE APPEARED BEFORE US ON BEHALF OF THE ASSESSE E IN SPITE OF SERVICE OF NOTICE. AFTER CONSIDERING THE ARGUMENTS OF LD. DR AND CAREFULLY EXAMINING THE MATERIAL ON RECORD, WE RESTORE THE MA TTER TO THE FILE OF AO TO EXAMINE WHETHER BALANCE SHEET SHOWING ENHANCEMEN T OF CAPITAL WAS FILED ALONG WITH THE RETURN ON 22.9.2000 WHICH WAS ACCEPTED U/S 143(1). 3 IF ASSESSEE HAS TAKEN BENEFIT OF SUCH ENHANCEMENT I N THIS YEAR OR IN THE SUBSEQUENT YEAR ON THE BASIS OF CAPITAL OF RS.13,3 9,404/- THEN ADDITION DESERVES TO BE CONFIRMED. IF THE FIGURES ARE ONLY E STIMATION IN THE WORKING SHEET OF SHRI DANAWALA AND ASSESSEE HAS NOT TAKEN ANY BENEFIT IN HIS OWN ACCOUNT OR IN THE RETURN OF INCOME FILED TH EN ADDITION SHOULD NOT BE MADE. FOR FURTHER VERIFICATION AND FOR GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WE RESTORE THE MATTER TO THE FILE OF AO. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 17/9/10. SD/- SD/- (BHAVNESH SAINI) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R AHMEDABAD, DATED : 17/9/10. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 4 1.DATE OF DICTATION 17/8/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .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 ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..