The ACIT, (OSD)-Ward-10(2), Ahmedabad V. Shri Iqbal Shafimohmed Chippa, Ahmedabad

ITA 673/AHD/2006

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9178 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-07-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 16-03-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VARIS ISANI
• Keywords: Unexplained investment; Peak credit; Additional evidence
• Section: 147; 148; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.673-677/AHD/2006 ASSESSMENT YEARS:1997-98 TO 2001-02 DATE OF HEARING:30.7.09 DRAFTED:3.8.09 ASSTT. COMMISSIONER OF INCOME TAX (OSD), WARD10(2), AHMEDABAD V/S. SHRI IQBAL SHAFIMOHMED CHIPPA, PROP. M/S. CAR LINK, GF-84 SHIRKIRHNA CENTRE, MITHAKALI, NAVRANGPURA, AHMEDABAD PAN NO.AAPPC6133P (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI VARIS ISANI, AR REVENUE BY:- SHRI SANJEEV KASHYAP, SR DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THESE FIVE APPEALS BY THE REVENUE ARE ARISING OUT OF THE ORDERS OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD IN APPEAL NO.CIT(A)- XVI/WD.10(2)/85-89/04-05 BY SAME DATE 26-12-2005. T HE ASSESSMENTS WERE FRAMED BY THE ITO, WARD-10(2) AHMEDABAD U/S.144 R.W.S. 147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS COM MON ORDER DATED 26-03-2004 FOR THE ASSESSMENT YEARS 1997-98 TO 2001-02. FIRST WE WILL DEAL WITH ITA NO.673/AHD/2006 OF REVE NUES APPEAL. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN RESTRICTING THE ADDITION BASED ON TRANSACTIONS RECO RDED IN THE UNACCOUNTED BANK ACCOUNT DETECTED DURING THE SURVEY ON THE BASIS OF PEAK CREDIT IN RESPECT OF ADDITION MADE BY THE ASSESSING OFFICER ON INDIVIDUAL TRANSAC TIONS MADE BY THE ASSESSING OFFICER DURING THE YEAR UNDER CONSIDERATION. FOR TH IS, THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUND NO.1 :- ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 2 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION ON ACCOUNT OF CASH CREDIT MADE BY THE ASSESSING OFFICE R ON THE BASIS OF UNACCOUNTED BANK A/C DETECTED DURING SURVEY TO THE PEAK CREDIT INSTEAD OF THE ADDITION MADE ON THE BASIS OF INDIVIDUAL TRANSA CTIONS DURING THE YEAR IN THE SAID BANK A/C, AND THEREFORE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER MADE BY THE ASSESSING OFFICER. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF CIT(A). T HE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF OLD CARS AND EARNING INCOME FROM BROKERAGE AND C OMMISSION FROM SALE OF THE CARS. DURING THE COURSE OF SURVEY CONDUCTED BY THE DEPARTMENT U/S.133A OF THE ACT ON 20-10-2000, A PAYING SLIP OF UNION BANK OF INDIA , JAMALPUR BRANCH, AHMEDABAD, BEARING SAVING A/C. NO.7040 IN THE NAME OF SHRI IQBAL S. CHHIPA WAS FOUND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS NOT RECORDED THE TRANSACTIONS OF THE SAVINGS ACCOUNT IN THE BOOKS OF ACCOUNT AND NOT DISCLOSED IN THE RETURN OF INCOME FILED. ACCORDING LY, THE PROCEEDINGS U/S 148 OF THE ACT WAS INITIATED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE AFORESAID TRANSACTIONS RECO RDED IN THE ABOVE BANK ACCOUNT. THE ASSESSEE STATED THAT TRANSACTIONS IN THE BANK A CCOUNT WERE IN RESPECT OF DALALI / BROKERAGE / COMMISSION CHARGED FROM SELLERS / PURCH ASERS OF SECOND HAND CARS. IT WAS FURTHER STATED BEFORE THE AO BY THE ASSESSEE TH AT SELLERS WERE MAKING PAYMENT BY CHEQUES AND THE BUYERS PAID BY CASH. IT WAS STA TED THAT ONLY FOR THIS PURPOSE, THE ASSESSEE HAS OPENED THE BANK ACCOUNT THAT THE CHEQU ES WERE DEPOSITED AND WITHDRAWN CASH. THE AO PROPOSES TO ADD THE ENTIRE C REDITS ENTRIES IN THE BANK ACCOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE COULD NOT PRODUCE FULL INFORMATION IN RESPECT OF TRANSACTIONS RECORDE D IN THE BANK ACCOUNT, BY STATING THE REASON THAT THE DOCUMENTS HAD BEEN DESTROYED DURING GODHRA RIOTS ON 28-02-2002. IT WAS ARGUED BEFORE THE AO THAT THERE WAS DEPOSITE D IN THE BANK ACCOUNT AND WITHDRAWN ALSO AND NOT MERELY THE ENTRIES CREDITED IN THE BANK ACCOUNT. ACCORDINGLY, IT WAS FURTHER ARGUED THAT IN ENTIRETY ONLY DALALI / BROKERAGE / COMMISSION IS TO BE ASSESSED AS INCOME OF THE ASSESSEE. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF RS.1,62,500/- TO THE TOTAL INCOME OF THE ASSESSEE BY INVOKING U/S.69A OF THE ACT, TREATING T HE TRANSACTIONS RECORDED IN THE BANK ACCOUNT AS UNEXPLAINED INVESTMENT. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 3 BEFORE CIT(A). BEFORE CIT(A), THE ASSESSEE ARGUED THAT THE AFORESAID BANK ACCOUNT REFLECTS THE DALALI INCOME OF THE ASSESSEE AND IT W AS IN RESPECT OF THE TRANSACTIONS PERTAINING TO BUYING AND SELLING OF SECOND HAND CAR S. THIS IS ALSO QUITE EVIDENT FROM THE CASH AND CHEQUES DEPOSITED AND ISSUED FROM THE SAID BANK ACCOUNT NO.7040 IN THE UBI, JAMALPUR BRANCH THAT THERE IS HARDLY ANY T IME GAP BETWEEN THE RECEIPT AND ISSUANCE OF THE CHEQUES. THE ASSESSING OFFICER HAS ONLY VERIFIED THE CREDIT SIDE OF THE BANK ACCOUNT AND HE HAS NOT TAKEN INTO ACCOUNT THE EXPENSES BORNE BY THE ASSESSEE. IN THE AFORESAID BANK ACCOUNT, THE TRANSA CTIONS ARE NOT OUT OF CASH CREDITS BUT THEY ARE ONE PERTAINING TO THE SALES AND PURCHA SES OF THE CARS OF CUSTOMERS ROUTED AT THE SAID BANK ACCOUNT OF THE ASSESSEE, WH O IS A BROKER OF SECOND HAND CARS. THEREFORE, IDENTITY OF PERSONS AND GENUINENES S OF TRANSACTIONS DOES NOT REQUIRE TO BE PROVED. DURING THE COURSE OF APPELLA TE PROCEEDINGS BEFORE THE CIT(A) THE LD COUNSEL HAS SUBMITTED ADDITIONAL EVIDENCE UN DER RULE 46A OF THE RULES, 1962 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AD DITIONAL EVIDENCE WAS IN THE NATURE OF AFFIDAVITS FILED BY:- 1) SHAIKHI USMANGANI GULAMNABI 2) BAGARAN ANWARHUSSAIN JANMEHMED 3) ALIKHAN ABDULHAMID 4) SIDDIQI VASIF SHABBIR & 5) SHAIKH MOHMEDRAFIQ CHANDMIYA THE AFORESAID ADDITIONAL EVIDENCE WAS SENT TO THE I TO BY THE CIT(A) VIDE OFFICE LETTER DATED 27-09-2005 ASKING FOR THE AO'S COMMENTS AND I N RESPONSE TO THIS, THE AO VIDE HIS LETTER DATED 20-09-2005 AND 17-11-2005 HAD GIVE N HIS REPORT. AT THE OUTSET, THE AO HAD OBJECTED TO THE FINDING OF THE ADDITIONAL EV IDENCE BY THE ASSESSEE BEFORE THE AO AND ALSO ON MERITS AFTER RECORDING THE STATEMENT U/S.131 OF THE ACT AND THE AFORESAID PARTIES DID NOT CLAIM THAT THEY HAD DEPOS ITED ANY CASH OR HAD WITHDRAWN ANY MONEY ON BEHALF OF ANY CUSTOMERS AS THEY WERE S UB-BROKERS PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND HE WAS NO T SATISFIED BY THE CREDITWORTHINESS OF THE AFORESAID PARTIES PRODUCED BEFORE HIM BY THE ASSESSEE. THE CIT(A) AFTER GOING THROUGH THE REMAND REPORT OF THE ASSESSING OFFICER, ASSESSED THE CREDIT ENTRIES / TRANSACTIONS RECORDED IN THE BANK ACCOUNT ON THEORY OF PEAK CREDIT AND SUSTAINED THE ADDITION AT RS.47,009/- AS AGAINS T THE ADDITION MADE BY THE AO AT RS.1,62,500/- BY GIVING FOLLOWING FINDING IN PARA-3.4 AND 3.5 OF HIS APPELLATE ORDER:- 3.4 AFTER GOING THROUGH THE ASSESSING OFFICERS RE MAND REPORT, IT IS QUITE EVIDENT THAT THE APPELLANT HAS NOT BEEN ABLE TO DIS CHARGE THE ONUS OF PROVING ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 4 THE CREDITWORTHINESS OF THE AFORESAID FIVE SUB-BROK ERS, WHOSE AFFIDAVITS WERE PRODUCED BEFORE ME DURING THE COURSE OF HEARING. IT IS A WELL SETTLED LEGAL POSITION THAT FOR THE PURPOSE OF PROVING THE CASH C REDITS ONUS LIES ON THE APPELLANT AND NOT ON THE ASSESSING OFFICER. IT IS, IN THIS CONTEXT THAT THE LD. AUTHORIZED REPRESENTATIVE HAD FILED COPY OF PEAK CR EDITS OF THE AFORESAID BANK ACCOUNT FOR THE PURPOSE OF MAKING ADDITION FOR THE SAME U/S.68 OF THE I.T. ACT, 1961. THE PEAK CREDIT IN THE SAID BANK AC COUNT IS AT RS.1,15,49/- HE HAD ALSO ARGUED, AS SEEN ABOVE, THAT THE ASSESSING OFFICER HAD ERRED IN ADDING THE ENTIRE CREDIT ENTRIES OF THE APPELLANTS BANK ACCOUNT WITHOUT GIVING ANY BENEFIT TO THE EXPENSES INCURRED BY THE APPELLA NT IN THIS REGARD. I ALSO FIND MERIT IN THE STATEMENT OF THE LD. AUTHORIZED R EPRESENTATIVE THAT THE THEORY OF PEAK CREDIT WOULD BE PROPER FOR THE PURPOSE OF I NCLUSION OF INCOME OF THE APPELLANT. IT WOULD BE PROPER TO APPLY THE THEORY O F PEAK CASH IN THE HANDS OF THE APPELLANT FOR THE PURPOSE OF DETERMINING THE PE AK ADDITION U/S.68 OF THE I.T. ACT 1961 RATHER THAN ADOPTING THE ESTIMATION O F INCOME BY ADDING THE ENTIRE BANK ACCOUNT TRANSACTIONS WHICH HAS NOT BEEN CAREFULLY DONE BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. THE THEO RY OF PEAK CREDIT IS A JUDICIALLY ACCEPTED ALTERNATIVE TO ESTIMATION OF IN COME WHICH HAS BEEN APPROVED IN THE FOLLOWING JUDICIAL PRONOUNCEMENTS. 1. CIT VS. V.S/ NELLIAPPAN, 66 ITR 722 (SC) 2. ANANTARAM VEERASINGHALAH & CO. VS. CIT, 123 ITR 457 (SC) 3. SWAROOPCHAND KOJWAN VS. CIT, 235 ITR 732 (RAJ) 4. 147 ITR 127 (MAD) 3.5 FOR THE REASONS AFORESAID, THE PEAK ADDITION IN THE HANDS OF THE APPELLANT WORKS OUT TO R.1,15,491 AND AS A RESULT OF THIS, HE WILL BE ENTITLED TO RELIEF OF RS.47,009 (162500 115491). AGGRIEVED, THE REVENUE CAME IN APPEAL BEFORE US. 4. THE ONLY GRIEVANCE RAISED BY THE LD. DEPARTMENTA L REPRESENTATIVE BEFORE US WAS THAT EACH AND EVERY TRANSACTION SHOULD HAVE ADD ED AND THE CIT(A) HAS WRONGLY SUSTAINED THE ADDITION ONLY ON PEAK BASIS PARTLY. HE VEHEMENTLY ARGUED THAT THE THEORY OF PEAK CREDIT IS NOT CORRECT BASIS FOR ASSE SSING ONES INCOME. WE FIND THAT THE REVENUE BEFORE US COULD NOT ADDUCE ANYTHING THA T THE PEAK CREDIT ASSESSED BY THE CIT(A) IS WRONG. WE FURTHER FIND THAT THE ASSE SSEE HAS FILED PEAK CREDIT COMPUTATION ON THE BASIS OF TRANSACTION RECORDED IN THE BANK ACCOUNT AND THE REVENUE COULD NOT POINT OUT ANY DEFECT IN THE SAME. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) H AS SIMPLY ACCEPTED THE PEAK CREDIT AFTER SENDING THE SAME TO THE AO FOR REMAND REPORT. WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN SUSTAINING THE PART ADDITION ON THE BASIS OF THE THEORY OF PEAK CREDIT. ACCORDINGLY, WE CONFIRM THE ORDER OF THE C IT(A) AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 5 COMING TO REVENUES APPEAL NO.674-677/AHD/2006. 5. THE FACTS BEING EXACTLY IDENTICAL, WE FIND THAT THERE IS NO DIFFERENCE AND EVEN BOTH THE SIDES AGREED THAT THE FACTS ARE EXACTLY ID ENTICAL AND ON THE CREDIT ENTRIES AS REFLECTING IN THE BANK ACCOUNT, THE CIT(A) HAS REST RICTED THE ADDITION OF RS.1,45,845/- AS AGAINST THE ADDITION OF RS.4.04 LAKHS, RS.3,10,6 02/- AS AGAINST THE ADDITION OF RS.9.85 LAKHS, OF RS.85,002/- AS AGAINST THE ADDITI ON OF RS.1,59,500/- AND OF RS.2,37,282/- AS AGAINST THE ADDITION OF RS.5,97,45 1/- FOR THE ASSESSMENT YEARS 1998-99 TO 2001-02 RESPECTIVELY. WE FIND NO INFIRMI TY IN THE ORDERS OF CIT(A) AND TAKING A CONSISTENT VIEW AS IN ITA NO.673/AHD/2006 , WE DISMISS ALL THE APPEALS OF THE REVENUE ON THIS ISSUE. 6. THE SECOND ISSUE IN THIS APPEAL OF REVENUE IN ITA NO.673/AHD/2006 IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITIO N MADE FOR DALALI / BROKERAGE / COMMISSION RECEIVED BY THE ASSESSEE MADE BY THE ASS ESSING OFFICER ON THE BASIS OF DETAILS NOTED IN THE BOOKS OF ACCOUNT AND LEDGER FO UND DURING THE COURSE OF SURVEY MENTIONING THE DETAILS REGARDING EACH CAR AND THE Q UANTUM OF DALALI / COMMISSION / BROKERAGE RECEIVED AND ADDITION MADE BY THE ASSESSI NG OFFICER. FOR THIS, THE REVENUE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE FOR DALAI RECEIVED ON THE BASIS OF THE DETAILS NOTE D IN THE VARIOUS BOOKS OF ACCOUNT AND REGISTERS FOUND DURING SURVEY MENTIONIN G MINUTES DETAILS REGARDING EACH CAR AND THE QUANTUM OF DALALI THEREO F AND THEREFORE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER MADE BY THE A SSESSING OFFICER. 7. AFTER HEARING THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THA T DURING THE COURSE OF SURVEY ON 20-10-2000, THE SURVEY PARTY FOUND THE BOOKS OF ACC OUNT AND DOCUMENTS AND REGISTERS AND THE SAME WERE SEIZED AS ANNEXURE-A/14 . THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS REJECTED THE B OOKS OF ACCOUNT AND ESTIMATED THE DALALI / COMMISSION / BROKERAGE INCOME UNDER TH E HEAD DALALI NOT CHARGED FROM THE SELLERS AT RS.3,29,175/- ALSO DALALI INCOME REC EIVED FROM FIVE CARS AS PER ANNEXURE-A/14 OF RS.20,000/- AND AGAIN DALALI INCOM E OF 145 CARS AS PER ANNEXURE- A/14 AT RS.5.80 LAKHS. THE ASSESSING OFFICER ACCOR DINGLY ISSUED SHOW CAUSE NOTICE IN VIEW OF THE DETAILS OF CARS AVAILABLE IN THE REG ISTERS AND ACCORDINGLY ESTIMATED THE DALALI INCOME AT RS.3,20,125/- NOT CHARGED FROM SEL LERS AS DALALI INCOME OF FIVE CARS AS PER ANNEXURE-A/14 OF RS.20 LAKHS AND DALALI INCO ME OF 45 CARS AS PER ANNEXURE- ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 6 A/14 AT RS.5.80 LAKHS. AGGRIEVED, THE ASSESSEE PREF ERRED APPEAL BEFORE CIT(A). THE CIT(A) NOTED THAT ANNEXURE-A/14 IS INVENTORY IN RES PECT OF STOCK OF CARS RECORDED IN THE REGISTERS AND THE AO HAS ESTIMATED THE DALALI I NCOME BY APPLYING A PARTICULAR TYPE OF RATE PER CAR. THE CIT(A) NOTED THAT THE AO IN THE ASSESSMENT ORDER NOWHERE MENTIONED THAT THESE CARS ARE NOT REFLECTED IN THE BOOKS OF ACCOUNT AND PARTICULARLY SPECIFIC DEFECTS HAVE NOT BEEN POINTED OUT OR ANY I RREGULARITIES / DEFECTS FOUND BY THE AO IN RESPECT OF THE ANNEXURE-A/14 WHILE ESTIMATING THE DALALI / COMMISSION / BROKERAGE INCOME OF THE ASSESSEE. BEFORE THE CIT(A ), THE ASSESSEE STATED THAT THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD, FOR NOT ACCEPTING THE BOOK RESULTS OF THE ASSESSEE AND MAKING THE ABOVE ASSESSMENT U/S.144 OF THE ACT. THERE WAS NO EVIDENCE WHICH SHOWS THAT IN RESPECT OF THE CAR NUM BERS ENLISTED AND MENTIONED BY THE AO IN THE ASSESSMENT ORDER THAT THE ASSESSEE HA S EARNED OR RECEIVED ANY DALALI INCOME. THE ASSESSEE HAS ALSO MAINTAINED DALALI RE GISTER FOR SALE AND PURCHASE OF CARS OF CUSTOMERS AS HE IS ENGAGED IN THE CAR BROKE RAGE BUSINESS. THE AO HAS MADE THE ESTIMATION OF DALALI INCOME PURELY ON SURM ISES OR CONJECTURES. IN VIEW OF THE ARGUMENTS, THE CIT(A) DELETED THE ADDITION BY G IVING FOLLOWING FINDING IN PARA-3.8 TO 3.11 OF HIS APPELLATE ORDER:- 3.8 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND T HE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE AND I FIND MERIT IN THEM THAT THE ASSESSING OFFICER HAS NOT ABLE TO GATHER ANY EVIDENCE NOT DID HE MAKE ANY ENQUIRIES IN RESPECT OF DALALI INCOME AS ESTIMATED BY HIM. THE ESTIMATIO N OF DALALI INCOME HAS BEEN MADE PURELY ON SURMISES AND CONJECTURES WITHOU T POINTING OUT ANY SPECIFIC DEFECTS / IRREGULARITIES IN THE BOOKS OF T HE APPELLANT AND ALSO IN RESPECT OF ANNEXURE A-14, THE STOCK REGISTER, WHICH HAS BEE N MADE THE BASE FOR MAKING THE ESTIMATION OF THE DALALI INCOME BY THE A SSESSING OFFICER. CONSIDERING FROM ANOTHER POINT OF VIEW, THE ASSESSI NG OFFICER SHOULD HAVE MADE PARALLEL ENQUIRIES IN RESPECT OF COMPUTING OF DALALI INCOME FROM ANOTHER BROKER WHO WAS IN THE SIMILAR LINE OF BUSINESS AS T HE APPELLANT. IN OTHER WORDS, THERE IS ABSENCE OF ANY CORROBORATIVE EVIDENCE BY T HE ASSESSING OFFICER TO SUPPORT HIS VERSION OF DALALI INCOME OF THE APPELLA NT. THE ASSESSING OFFICER HAS FOLLOWED THE ESTIMATION ROUTE PER SE. 3.9 IT IS SEEN IN THE FOREGOING SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE THAT NO TANGIBLE ASSETS HAVE BEEN FO UND AT THE TIME OF SURVEY U/S.133A OF THE I.T. ACT, 1961 AT THE BUSINESS PREM ISES OF THE APPELLANT. BY APPLYING THE THEORY OF BALANCING OF ASSETS, EVEN DE EMED INCOME AND ITS POSSIBILITY OF EARNING MUST BE REPRESENTED BY ASSET S MOVABLE / IMMOVABLE IN THE FORM OF DISPROPORTIONATE ASSETS. THIS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ROSHAN D HATTI VS. CIT (1977) 107 ITR 938 (SC). IN THE PRESENT CASE UNDER CONSIDERATION, NO S UCH TANGIBLE ASSETS HAVE BEEN FOUND AT THE TIME OF SURVEY AT THE BUSINESS PR EMISES OF THE APPELLANT. ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 7 3.10 LASTLY, I AM TEMPTED TO QUOTE ABUNDANT CAUTION LAID DOWN BY THE HONNBLE SUPREME COURT IN THE CASE OF SIMON CARVES LTD. (1976), 105 ITR 212 (SC) (PER KHANNAJAT PENALTY PROCEEDINGS 218 ): THE TAXING AUTHORITIES EXERCISE QUASI-JUDICIAL P OWERS AND IN DOING SO THEY MUST ACT IN A FAIR AND NOT A PARTISAN MANNER. ALTHOUGH IT IS PART OF THEIR DUTY TO ENSURE THAT NO TAX WHICH IS LEGITIMAT ELY DUE FROM AN ASSESSEE SHOULD REMAIN UNRECOVERED, THEY MUST ALSO AT THE SAME TIME NOT ACT IN A MANNER AS MIGHT INDICATE THAT SCALES A RE WEIGHED AGAINST THE ASSESSEE. WE ARE WHOLLY UNABLE TO SUBSCRIBE TO THE VIEW THAT UNLESS THOSE AUTHORITIES EXERCISE THE POWER IN A MA NNER MOST BENEFICIAL TO THE REVENUE AND CONSEQUENTLY MOST ADV ERSE TO THE ASSESSEE, THEY SHOULD BE DEEMED NOT TO HAVE EXERCIS ED IT IN A PROPER AND JUDICIOUS MANNER. 3.11 FOR THE REASONS GIVEN ABOVE, ESTIMATION OF DAL ALI INCOME IN RESPECT OF DALALI INCOME OF FIVE CARS AS PER ANNEXURE A-14 OF RS.20,000 AND ESTIMATION OF DALALI INCOME IN RESPECT OF AGAIN DALALI INCOME OF FIVE CARS AS PER ANNEXURE A-14 OF RS.5,80,000 IS HEREBY DELETED. THE APPELLAN T ENTITLED TO GET A RELIEF OF RS.9,29,175. AGGRIEVED, THE REVENUE CAME IN APPEAL BEFORE US. 8. WE FIND THAT THE CIT(A) HAS DELETED THE ADDITION BY APPLYING THEORY OF BALANCING OF ASSETS AS WELL AS THAT THE AO HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND COU LD NOT CO-RELATE ANY DALALI INCOME EARNED OUT OF THE SALE OF THE CARS MENTIONED IN ANNEXURE-A/14 IMPOUNDED BY THE REVENUE DURING THE COURSE OF SURVEY. BEFORE US, LD. DR FAIRLY ARGUED THAT THE AO HAS REASONABLY MADE ESTIMATION AFTER APPLYING RA TE OF COMMISSION PER CAR I.E. FROM SELLER AS WELL AS PURCHASER AT RS.2,000/- TO R S.5,000/- AS ADMITTED BY THE ASSESSEE HIMSELF, DURING THE COURSE OF SURVEY. IN VIEW OF THESE, LD. DR HAS STATED THAT THE AO HAS RIGHTLY ESTIMATED THE INCOME. 9. AFTER GOING THROUGH THE CASE RECORDS PARTICULARL Y THE ASSESSMENT ORDER, WE FIND THAT THE AO HAS NOT CO-RELATED ANY OF THE SALE AND PURCHASE OF CARS MENTIONED IN THE REGISTER IMPOUNDED DURING THE COURSE OF SURV EY THAT THE ASSESSEE HAS RECEIVED DALALI / COMMISSION / BROKERAGE TO THE EXT ENT OF RS.2,000/- TO RS.5,000/- AS ESTIMATED BY THE AO. WE ALSO FIND THAT, NO DEFECT WHATSOEVER, IS RECORDED IN THE ASSESSMENT ORDER THAT THE BOOKS OF ACCOUNT MAINTAIN ED BY THE ASSESSEE ARE DEFECTIVE AND IMPOUNDED DURING THE COURSE OF SURVEY . WE ALSO FIND THAT THE ASSESSEE BEING A DEALER IN SECOND HAND CAR HAS SHOW N THE STOCK OF CARS AVAILABLE WITH HIM, THIS STOCK IS ON ACCOUNT OF CAR LEFT BY P ROSPECTIVE SELLERS WHO ARE LOOKING FOR ITA NO.673-677/AHD/2006 A.Y.S 1997-98 TO 2001-02 ACIT (OSD) WD-10(2) ABD V. SH. IQBAL S. CHIPPA PAGE 8 THE PROSPECTIVE BUYERS WITH THE COMMISSION AGENT. T HE ASSESSEE BEING COMMISSION AGENT DEFINITELY RECEIVED THE COMMISSION / DALALI / BROKERAGE BUT SOMETIMES HE RECEIVES COMMISSION FROM ONE PARTY OR THE OTHER. T HERE IS NO FIXED RATE FOR COMMISSION IN SECOND HAND CAR SALE. THE ONLY ENTRY RECORDED IS THAT OF STOCK OF CARS IN THE REGISTER IMPOUNDED AS ANNEXURE-A/14 AND THER E IS NO MENTION OF ANY COMMISSION RECEIVED BY THE ASSESSEE. EVEN THE AO CO ULD NOT POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT AND IN THE ABSENCE OF THE SAME WE ARE OF THE VIEW THAT THE AO HAS NO POWER TO MAKE ANY ESTIMATE. IN VIEW OF THES E, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND ACCORDI NGLY WE CONFIRM THE SAME AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. COMING TO REVENUES APPEAL NO.674-677/AHD/2006. 10. AS REGARDS TO THE SECOND ISSUE IN THESE APPEALS OF THE REVENUE IN ITA NO.674-677/AHD/2006 , THE FACTS BEING EXACTLY IDENTICAL IN REVENUES AP PEAL IN ITA NO.673/AHD/2006 AND TAKING A CONSISTENT VIEW AS ABOVE WE DISMISS TH E ISSUE OF THE REVENUES APPEALS AND CONFIRM THE ORDER OF CIT( A). 11. IN THE RESULT, REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04/09/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED :04/09/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- XVI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD