The DCIT, Central Circle-2(2), Ahmedabad V. Ornet Intermediates Pvt. Ltd., Ahmedabad

ITA 477/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0403 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-11-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 02-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: D P SONI
• Keywords: Income from undisclosed sources; Revised return
• Section: 271(1)(c); 143(3); 80HHC; 80IB; 80IA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI N.S. SAINI, A.M.) I.T.A. NOS. 477 & 478/AHD./2007 ASSESSMENT YEAR : 2001-2002 & 2003-2004 DEPUTY COMMISSIONER OF INCOME TAX, -VS.- ORN ET INTERMEDIATES PVT. LTD., AHMEDABAD CIRCLE-2(2), AHMEDABAD (P.A. NO. AAACO 2744 E) (APPELLANT) (R ESPONDENT) & C.O. NOS. 67 & 68/AHD./2007 (ARISING OUT OF I.T.A. NOS. 477 & 478/AHD./200 7) ASSESSMENT YEAR : 2001-2002 & 2003-2004 ORNET INTERMEDIATES PVT. LTD., AHMEDABAD VS.- DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(2), AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI D.P. SONI DEPARTMENT BY : SHRI SHELLEY JINDAL, CI T(D.R.) O R D E R PER BENCH :- BOTH THESE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE WERE HEARD ON THE SAME DATE, ARGUED BY COMMON LD. REPRES ENTATIVE. THEREFORE, THESE ARE DISPOSED OF TOGETHER BY THIS COMMON ORDER FOR THE SAKE OF CONVE NIENCE. 2. THE ONLY GRIEVANCE OF THE REVENUE IN ITA NO. 477 /AHD/2007 IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DELETI NG THE PENALTY OF RS.45,73,277/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2001-02. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF SO DYES AND INTERME DIATES, ETC. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED RETURN OF INCOME SHOWING TOTAL INC OME AT RS.2,18,37,780/- ON 31.03.2003. THE REVISED RETURN WAS FURNISHED WITH A VIEW TO RE-COMP UTE THE DEDUCTION UNDER SECTIONS 80IA AND 80HHC AS UNDER :- AS PER ORIGINAL RETURN AS PER REVISED RETURN DEDUCTION U/S. 80IA RS.1,45,40,698/- RS.1,01,13,610 /- DEDUCTION U/S. 80HHC RS.3,86,07,038/- RS.3,14,70,84 5/- 2 4. THE A.O. FRAMED THE ASSESSMENT UNDER SECTION 143 (3) ON 08.03.2006 COMPUTING THE TOTAL INCOME AT RS.2,18,37,780/-. IN THIS ASSESSMENT ORDE R, THE A.O. ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) FOR FURNISHING INACCURATE P ARTICULARS OF INCOME. SUBSEQUENTLY VIDE ORDER DATED 22.03.2006, THE A.O. LEVIED THE PENALTY OF RS .45,73,277/- @ 100% OF TAX SOUGHT TO BE EVADED IN FURNISHING INACCURATE PARTICULARS OF INCO ME TO THE TUNE OF RS.1,15,63,281/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 5. AGAINST THE ORDER OF A.O. IN LEVYING PENALTY UND ER SECTION 271(1)(C) OF THE I.T. ACT, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMIS SIONER OF INCOME TAX(APPEALS). BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE AS SESSEE FILED THE FOLLOWING SUBMISSIONS :- 2. THE APPELLANT SUBMITS THAT THE ASSESSMENT IN IT S CASE WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER U/S. 143(3) FRAMED ON 8 TH MARCH, 2006. THE ASSESSING OFFICER HAS COMPUTED INCOME VIDE THE SAID ORDER AT RS.2,18,37,780/-. 2.1. THE APPELLANT SUBMITS THAT ON 30 TH OCTOBER, 2001, IT HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1,02,74,500/ -. THE APPELLANT SUBMITS THAT ON 31 ST MARCH, 2003, IT HAD FURNISHED THE REVISED RETURN D ECLARING TOTAL INCOME AT RS.2,18,73,780/-. THE APPELLANT SUBMITS THAT THE RE VISED RETURN WAS FURNISHED WITH A VIEW TO RECOMPUTING DEDUCTION UNDER SECTION 80HHC A ND 80IA AND THE DETAILS ARE AS UNDER :- AS PER ORIGINAL RETURN AS PER REVISED RETURN DEDUCTION U/S. 80IA RS.1,45,40,698/- RS.1,01,13,610 /- DEDUCTION U/S. 80HHC RS.3,86,07,038/- RS.3,14,70,84 5/- 2.2. THE APPELLANT SUBMITS THAT THERE WAS SUBSTANTI AL CONTROVERSY IN THE MATTER OF COMPUTATION OF DEDUCTION U/S. 80HHC AND 80IA AND A VIEW WAS EXPRESSED THAT PROVISIONS OF SECTION 80IA(() WOULD NOT PREJUDICE O R CURTAIL RELIEF ADMISSIBLE TO AN ASSESSEE U/S. 80HHC. THE ASSESSEE WAS ADVISED THAT WHILE COMPUTING DEDUCTION U/S. 80HHC PROVISIONS OF SECTION 80IA(9) SHOULD NOT BE T AKEN INTO CONSIDERATION AS 80HHC PROVIDE INDEPENDENT CODE IN THE MATTER OF ALLOWING DEDUCTION U/S.80HHC. HOWEVER, DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS THE APPELLANT WAS IMPRESSED UPON THAT THE CLAIM WAS DEB ATABLE AND IT WOULD BE IN ITS INTEREST IF CLAIM IS REVISED BY FURNISHING THE REVI SED RETURN THE APPELLANT SUBMITS THAT RETURN OF INCOME WAS IN FACT REVISED ON BASJS OF DISCUSSIONS WITH THE THEN ASSESSING OFFICER AND THE THEN ADDITIONAL COMMISSIO NER OF INCOME-TAX AND THE APPELLANT WAS ADVISED THAT NO PENALTY SHALL BE LEVI ED IF RETURN IS REVISED AND TAX IS PAID. THE APPELLANT HAD THEREFORE REVISED THE RETUR N OF INCOME AND ACCORDINGLY RECOMPUTED INCOME. THE APPELLANT SUBMITS THAT, HOWE VER, VIDE NOTE THE CLAIM WAS KEPT ALIVE. THE APPELLANT SUBMITS THAT THE ASSESSIN G OFFICER HIMSELF HAS STATED THAT THERE WAS A MISTAKE BY THE ASSESSEE IN THE MATTER O F COMPUTATION OF DEDUCTION U/S.80HHC AND 80IA. THE APPELLANT SUBMITS THAT MERE LY ON ACCOUNT OF THE MISTAKE 3 NO PENALTY CAN BE LEVIED. THE APPELLANT FURTHER SUB MITS THAT THE INTERPRETATION OF PROVISIONS OF SECTIONS 80HHC AND 80IA HAD COME BEFO RE THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL AND A VIEW HAS BEEN TAKEN BY THE APPELLATE TRIBUNAL IN THE FOLLOWING CASES WHERE ASSESSEE IS ENTITLED TO DEDUC TION U/S. 80HHC. 2.3. THE APPELLANT SUBMITS THAT UNDER THE CIRCUMST ANCES ITS CONTENTION AS PER THE ORIGINAL RETURN HAVE BEEN ACCEPTED BY THE APPEL LATE TRIBUNAL. THE APPELLANT SUBMITS THAT UNDER THE CIRCUMSTANCES INCOME STANDS ASSESSED HIGHER AMOUNT AND THE CLAIM MADE BY THE APPELLANT AS PER THE ORIGINAL RETURN WERE CORRECT AS PER THE PROVISIONS OF LAW. THE APPELLANT FURTHER SUBMITS TH AT UNDER THE CIRCUMSTANCES THE QUESTION OF ANY CONCEALMENT OF INCOME, THE QUESTION OF FURNISHING INACCURATE PARTICULARS DOES NOT ARISE. THE APPELLANT ALSO SUBM ITS VEHEMENTLY THAT EACH AND EVERY PARTICULAR PLACED ON THE RECORDS OF THE ASSES SING OFFICER WAS ACCURATE AND EACH AND EVERY PARTICULAR WAS CORRECTLY FURNISHED T HE ASSESSING OFFICER HAS MERELY MADE OBSERVATION REGARDING DEFAULT ON THE PART OF T HE APPELLANT WITHOUT ANY INSTANCE AS TO HOW THERE WAS FURNISHING OF INACCURA TE PARTICULARS BY THE ASSESSEE. THE APPELLANT FURTHER SUBMITS THAT ON IDENTICAL FAC TS AND CIRCUMSTANCES THE ASSESSING OFFICER HAD IMPOSED THE PENALTY UPON THE APPELLANT FOR THE ASSESSMENT YEAR 2000-01. THE APPELLANT SUBMITS THAT PENALTY ST ANDS DELETED BY THE APPELLATE TRIBUNAL VIDE ITS ORDER DATED 11 TH AUGUST, 2006 IN APPEAL NO L715/AHD/2006. A PHOTOCOPY OF THE ORDER IS ENCLOSED HEREWITH. THE AP PELLANT SUBMITS THAT UNDER THE CIRCUMSTANCES THE ORDER OF PENALTY BE QUASHED. THE APPELLANT WITHOUT PREJUDICE TO ABOVE FURTHER SUBMITS THAT THE NOTICE OF PENALTY DA TED 8 TH MARCH, 2004 ISSUED BY THE ASSESSING OFFICER U/S.274 WAS BAD IN LAW. THE APPEL LANT SUBMITS THAT THE NOTICE IS VAGUE AND THEREFORE PROCEEDINGS BASED ON SUCH VAGUE NOTICE CANNOT BE SUSTAINABLE IN THE EYES OF LAW. 6. AFTER CONSIDERING THE AFORESAID SUBMISSIONS, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELLED THE P ENALTY ON THE GROUND THAT IN THE REVISED RETURN, THE ASSESSEE MERELY RECTIFIED THE MISTAKE A ND PAID THE TAXES. THE SAID MISTAKE WAS ON ACCOUNT OF DEDUCTION CLAIMED UNDER SECTION 80HHC. H E ACCORDINGLY CANCELLED THE PENALTY OF RS.45,73,277/-. AGGRIEVED BY THE ORDER OF LEARNED C OMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING, ON BEHALF OF REVENUE SHR I SHELLEY JINDAL APPEARED AND CONTENDED THAT BEFORE THE A.O. THE ASSESSEE DID NOT FURNISH A NY REPLY, THEREFORE, THE CONDUCT OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AMOUNTED TO ADM ISSION OF ADDITIONAL/ NEW EVIDENCES. THE LD. D.R. ALSO SUBMITTED THAT IN THE IMPUGNED OR DER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CLEARLY ERRED IN TREATING THE RETURN F ILED ON 31.03.2003 AS REVISED RETURN, (WHEREAS 4 THE SAME CANNOT BE TREATED AS GENUINE BECAUSE ORIGI NAL RETURN WAS FILED ON 30.10.2001 AND THE SAME WAS FILED AFTER THE MISTAKES WERE DETECTED BY A.O.) AND THUS DELETED THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE LD. D.R. ACCORDINGLY SUBMITTED THAT PENALTY OF RS.45,73,277/- WAS CORRECTLY LEVIED BY THE A.O., THEREFORE, THE SAME BE RESTORED. 8. ON THE OTHER HAND, SHRI D.P. SONI, LD. COUNSEL O F THE ASSESSEE DREW OUR ATTENTION TO THE ASSESSMENT ORDER, WHEREIN THE A.O. HAS HIMSELF MENT IONED THAT RETURN OF INCOME WAS FILED ON 30.10.2001 SHOWING TOTAL INCOME AT RS.1,02,74,500/- . THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT SUBSTANTIAL CONTROVERSY WAS IN THE M ATTER OF COMPUTATION OF DEDUCTION UNDER SECTIONS 80HHC AND 80IA AND A VIEW WAS EXPRESSED TH AT PROVISION OF SECTION 80IA(9) WOULD NOT PREJUDICE OR CURTAIL RELIEF ADMISSIBLE TO AN ASSESS EE UNDER SECTION 80HHC. THE INTERPRETATION OF THESE TWO PROVISIONS, I.E. UNDER SECTIONS 80HHC AND 80I, HAD COME BEFORE THE ITAT AND A VIEW HAS BEEN TAKEN BY THE APPELLATE TRIBUNAL IN THE FOL LOWING CASES WHEN AN ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80HHC :- (I) VIJAY INDUSTRIES VS.- ITO [112 TTJ 353 (JP) (II) CIT VS.- RAJU ENG. LTD. [284 ITR 119(RAJKOT I TAT)] (III) SHREE RAM FOOD INDUSTRIES VS.- CIT (AHD. ITA NO.705/RJT/2005) (IV) SCH CREATIONS VS.- ASST. CIT [304 ITR 319] IT WAS ALSO SUBMITTED BY THE LD. COUNSEL OF THE ASS ESSEE THAT ON 06.05.2008, THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SCM CREATIONS REPORTED IN 304 ITR 310 HAS TAKEN A VIEW THAT RELIEF UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 SHOU LD NOT BE DEDUCTED FROM PROFITS AND GAINS OF THE BUSINESS ON WHICH RELIEF UNDER SECTION 80HHC OF THE ACT IS TO BE COMPUTED. IN VIEW OF THIS, IT CANNOT BE SAID THAT WHEN THE ASSESSEE FILE D THE ORIGINAL RETURN OF INCOME ON 30.10.2001, THE ISSUE WHETHER OR NOT RELIEF UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 SHOULD BE DEDUCTED FROM THE PROFITS AND GAINS OF BUSINESS BEF ORE COMPUTING RELIEF UNDER SECTION 80HHC OF THE INCOME TAX ACT, 1961, WAS HIGHLY DEBATABLE. THE REFORE, ON THIS GROUND ALONE, THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELL ING THE PENALTY OF RS.45,73,277/- BE UPHELD. 8.1. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMIT TED THAT THE FACTS ALONGWITH RELEVANT CASE LAWS WERE AVAILABLE BEFORE THE A.O. WHILE FINALIZIN G THE PENALTY PROCEEDINGS AND THE A.O., AFTER 5 CONSIDERING THE FACT THAT THE CLAIM OF DEDUCTION UN DER SECTION 80HHC MADE IN THE ORIGINAL RETURN OF INCOME WAS BONAFIDE FOR WHICH NO PENALTY UNDER S ECTION 271(1)(C) IS LEVIABLE. 9. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY C ONSIDERED THE ORDERS OF AUTHORITIES BELOW AND THE RELEVANT MATERIAL PLACED ON RECORD. IT IS P ERTINENT TO NOTE THAT ORIGINAL RETURN WAS FILED IN TIME, WHICH IS EVIDENT FROM THE ASSESSMENT ORDER. F ROM THE PERUSAL OF THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SCM CREATIONS REPO RTED IN 304 ITR 319 (MAD.), IT IS CLEAR THAT EVEN IN THE YEAR 2008, THE HON'BLE MADRAS HIGH COUR T HELD THAT RELIEF UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 SHOULD NOT BE DEDUCTED FROM PR OFITS AND GAINS OF BUSINESS BEFORE COMPUTING RELIEF UNDER SECTION 80HHC. WE ARE ALSO A WARE THAT AFTER THIS DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SCM CREATIONS (SUP RA), ITAT, SPECIAL BENCH, DELHI IN THE CASE OF ACIT VS.- HINDUSTAN MINT & AGRO PRODUCTS P VT. LTD. (2009) 119 ITD 107 HELD THAT DEDUCTION TO BE ALLOWED UNDER PROVISIONS OF CHAPTER VI-A WITH HEADING C (SECTIONS 80HH, 80HHC, ETC.) IS TO BE REDUCED BY AN AMOUNT OF DEDUC TION ALLOWED UNDER SECTION 80IA/ 80IB OF THE INCOME TAX ACT, 1961. IN VIEW OF THIS, WE ARE C ONVINCED THAT WHEN THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME, THE ISSUE WHETHER RELIEF UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961, SHOULD BE DEDUCTED FROM THE PROFITS AND GAINS OF BUSINESS BEFORE COMPUTING RELIEF UNDER SECTION 80HHC OF THE INCOME TAX ACT, 1961, WAS HIGH LY DEBATABLE. IN VIEW OF THIS, IN OUR OPINION, THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) WAS LEGALLY AND FACTUALLY CORRECT IN CANCELLING THE PENALTY OF RS.45,73,277/- LEVIED BY THE A.O. WE, THEREFORE, DECLINE TO INTERFERE. 10. NOW WE COME TO THE CROSS OBJECTION BEING NO. 67 /AHD/2007 ARISING OUT OF THE ITA NO. 477/AHD/2007 FILED BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2001-02. THE VARIOUS GROUNDS OF C.O. ARE IN SUPPORT OF THE ORDER OF LEARNED COMMISS IONER OF INCOME TAX(APPEALS) CANCELLING THE PENALTY OF RS.45,73,277/- LEVIED BY THE A.O. UN DER SECTION 271(1)(C) OF THE I.T. ACT, 1961. 11. IN VIEW OF OUR DECISION ABOVE IN REVENUES APPE AL, I.E. ITA NO. 477/AHD/2007 (SUPRA), THE CROSS OBJECTION FILED BY THE ASSESSEE IS RENDER ED INFRUCTUOUS, THEREFORE, THE SAME IS DISMISSED. 12. NOW WE COME TO THE ITA NO. 478/AHD/2007 FOR THE ASSESSMENT YEAR 2003-04. THE ONLY GROUND OF APPEAL RAISED BY THE REVENUE IS THAT THE LEARNED COMMISSIONER OF INCOME 6 TAX(APPEALS) ERRED IN DELETING THE ADDITION OF RS.3 5,50,506/-, BEING THE DIFFERENCE IN VALUE OF STOCK AS PER BOOK AND THAT DECLARED TO BANK, WHICH WAS MADE AS THE ASSESSEE FAILED TO PRODUCE EVIDENCES LIKE SALES BILLS AND OTHER DOCUMENTS TO P ROVE THAT THE VALUE OF STOCK GIVEN IN BANK STATEMENT WAS ARRIVED AT BY ADOPTING MARKET VALUE A S ON 31.03.2003. 13. AT THE TIME OF HEARING, THE LD. D.R. FOR THE RE VENUE FAIRLY ADMITTED THAT THERE IS NO DIFFERENCE IN QUANTITY. THE DIFFERENT IS ONLY ON AC COUNT OF VALUE. HOWEVER, HE SUBMITTED THAT FOR DIFFERENCE IN VALUE, THE ADDITION OF RS.35,50,506/- WAS RIGHTLY MADE. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF LEA RNED COMMISSIONER OF INCOME TAX(APPEALS). 14. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. FOR D ELETING THE PENALTY OF RS.35,50,506/- LEVIED BY THE A.O, THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) RELIED ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS.- JAYA SIMHA BABU AND MRS. A. SUBBU LAKSHMI REPORTED IN 241 ITR 363. THE GIST OF THE DE CISION RE-PRODUCED BY HIM IN THE IMPUGNED ORDER IS AS UNDER :- 'THE ASSESSEE'S INCOME IS TO BE ASSESSED BY THE INC OME-TAX OFFICER ON THE BASIS OF THE MATERIAL WHICH IS REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF ASSESSMENT AND ORDINARILY NOT ON THE BASIS OF THE STATEMENT WHICH THE ASSESSEE MAY HAVE GIVEN TO A THIRD PARTY UNLESS THERE IS MATERIAL TO CORROBORATE THAT STATEMENT OF THE ASSESSEE GIVEN TO A THIRD PARTY, EVEN IF IT BE A BANK. THE MERE FACT THAT THE ASSESSEE HAD MADE SUCH A STATEMENT BY ITSELF CANNOT BE TREATED AS HAVING RESULTED IN AN I RREBUTTABLE PRESUMPTION AGAINST THE ASSESSEE. THE BURDEN OF SHOWING THAT THE ASSESSEE H AD UNDISCLOSED INCOME IS ON THE REVENUE. THAT BURDEN CANNOT BE SAID TO BE DISCHARGE D BY MERELY REFERRING TO THE STATEMENT GIVEN BY THE ASSESSEE TO A THIRD PARTY IN CONNECTIO N WITH A TRANSACTION WHICH WAS NOT DIRECTLY RELATED TO THE ASSESSMENT AND MAKING THAT THE SOLE FOUNDATION FOR A FINDING THAT THE ASSESSEE HAD DELIBERATELY SUPPRESSED HIS INCOME . THE BURDEN IS ON THE REVENUE TO PROVE THAT THE INCOME SOUGHT TO BE TAXED IS WITHIN THE TAXING PROVISIONS AND THERE WAS IN FACT INCOME. THE ASSESSEE HAD SHOWN THE VALUE OF THE STOCK IN IT S BOOKS OF ACCOUNT. THE INCOME-TAX OFFICER THOUGH THAT THE FIGURES RELATING TO THE VALUE OF THE STOCKS IN THE BOOK COULD NOT BE REGARDED AS THE CORRECT VALUE OF THE S TOCKS AS THE ASSESSEE HAD GIVEN A DECLARATION TO THE BANK FROM WHICH IT HAD OBTAINED OVERDRAFT FACILITIES AND IN ITS DECLARATION VALUED THE STOCK AT A FIGURE HIGHER THA N THAT IN THE BOOS OF THE ASSESSEE. THE INCOME-TAX OFFICER COMPUTED THE DIFFERENCE BETWEEN THE VALUE AS RECORDED IN THE BOOKS AND THAT FOUND IN THE DECLARATION TO THE BANK AND T REATED THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE HAD CONTENDED THA T THE VALUE OF THE STOCKS AS STATED BY HIM IN THE DECLARATION GIVEN TO THE BANK WAS INFLAT ED, THAT HE HAD NOT SUPPRESSED THE VALUE OF STOCK, AND THAT THERE WAS NO INCOME FROM UNDISCL OSED SOURCES THE APPELLATE ASSISTANT 7 COMMISSIONER TO WHOM THE ASSESSES APPEALED, REDUCED THE AMOUNT OF THE ADDITION FROM RS.34,070/- TO RS.26,000/-. ON APPEAL TO THE TRIBUN AL, THE TRIBUNAL DELETED THE ADDITION. ON A REFERENCE :- HELD, THAT THE TRIBUNAL HAD ACCEPTED THE EXPLANATIO N OF THE ASSESSEE. THE TRIBUNAL HAD EXERCISED ITS JURISDICTION AND THE QUE STION DECIDED BY IT WAS A QUESTION OF FACT. THEREFORE, THERE WAS NO SCOPE FOR INTERFERENCE WITH THE ORDER OF THE TRIBUNAL. THE DECISION OF THE HON'BLE MADRAS HIGH COURT, WHIC H IS RELIED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), IS SQUARELY APPLICABLE TO THE FACTS OF ASSESSEES CASE. THEREFORE, WE INCLINED TO UPHOLD THE ORDER OF LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) AND REJECT THIS GROUND OF APPEAL OF REVENUE. 15. NOW WE COME TO THE CROSS OBJECTION BEING NO. 68 /AHD/2007 ARISING OUT OF THE ITA NO. 478/AHD/2007 FILED BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2003-04. THE ONLY GROUND OF C.O. IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) CORRECTLY DELETED THE ADDITION OF RS.35,16,506/-. THIS GROUND OF C.O. CLEARLY INDICAT ES THAT THE A.O. FILED BY THE ASSESSEE IS MERELY IN SUPPORT OF THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). 16. IN VIEW OF OUR DECISION ABOVE IN REVENUES APPE AL, I.E. ITA NO. 478/AHD/2007 (SUPRA), THE CROSS OBJECTION FILED BY THE ASSESSEE IS RENDER ED INFRUCTUOUS, THEREFORE, THE SAME IS DISMISSED. 17. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 27.11.2009 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27 / 11 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT 3) CIT(A) CONCERNED; (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.