Prakash B. Shah, Pune V. Deputy ommissioner of Income-tax,

ITA 680/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9909 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-07-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Loose papers
• Section: 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS. 680 TO 685/PUN/2016 / ASSESSMENT YEARS : 2005-06 TO 2009-10 & 2011-12 PRAKASH B. SHAH POOJAN JEWELLERS, A/P. MANCHAR, DIST.- PUNE, PIN-410 503 PAN : AMUPS1087K . /APPELLANT VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 1(1), PUNE . / RESPONDENT ASSESSEE BY : SHRI SUHAS P. BORA REVENUE BY : SHRI SHIVRAJ MOREY / DATE OF HEARING : 26.09.2018 / DATE OF PRONOUNCEMENT: 26.09.2018 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE SIX APPEALS BY THE ASSESSEE UNDER CONSIDER ATION INVOLVING ASSESSMENT YEARS 2005-06 TO 2009-10 AND 2011 -12 RESPECTIVELY. THEY ARE FILED AGAINST THE CONSOLIDATED ORDE R OF CIT(A)-13, PUNE, DATED 29-01-2016. 2. ASSESSEE RAISED IDENTICAL GROUNDS IN ITA NOS. 680 TO 684/PUN/2016 FOR THE A.YRS. 2005-06 TO 2009-10. THE S OLITARY ISSUE RAISED BY THE ASSESSEE IN THESE APPEALS RELATE TO GRANT ING OF TELESCOPING BENEFIT IN RESPECT OF THE ADDITION MADE BY THE AO ON ACC OUNT OF FIXED DEPOSITS WITH BANK. ASSESSEE ARGUES THAT THE SOURCES FOR THE IMPUGNED FIXED DEPOSITS IS THE INTEREST INCOME ACCRUED IN THE PAS T ASSESSMENT ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 2 YEARS. AO REJECTED THE EXPLANATION GIVEN BY THE ASSES SEE AND CIT(A) CONFIRMED THE SAME. WE SHALL TAKE UP APPEAL OF THE ASSESSEE FOR A.Y. 2005-06 A S THE STANDARD ONE. ITA NO.680/PUN/2016 A.Y. 2005-06 3. BACKGROUND FACTS OF THE CASE INCLUDE THAT THE ASSESS EE IN AN INDIVIDUAL. ASSESSEE IS FATHER OF SHRI PRITAM SHAH AND SHRI DEVENDRA SHAH. BOTH ARE DIRECTORS OF THE COMPANY PARAG MILK AND MILK PRODUCTS PRIVATE LIMITED. THERE WAS SEARCH ACTION U/S.132 OF THE A CT IN THE PARAG GROUP OF CASES ON 04-02-2011. SOME OF THE GROUP CONC ERNS WERE COVERED U/S.133A OF THE ACT. SEARCH RESULTED IN SEIZURE OF INCRIMINA TING MATERIAL VIZ., LOOSE PAPERS, COMPUTER PRINT OUTS, HANDWRITTEN CHITS, C OMPUTER DATA (IN SOFT FORM) ETC. PERTAINING TO THE ASSESSEE. SEARCH ALSO RESULTED IN SEIZURE OF CASH/JEWELLERY. ASSESSMENT WAS MADE U/S.153C OF THE ACT. RELYING ON THE DETAILS OF THE SEIZED PAPERS DISCOVERED DU RING THE SAID SEARCH, AO NOTICED THAT ASSESSEE MADE CERTAIN FIXED DEPOSITS IN VARIOUS BANKS ON VARIOUS DATES. DETAILS OF THE SAME ARE GIVEN IN PAGES 5 TO 8 OF THE ASSESSMENT ORDER. AO ASKED THE ASSESSEE TO JUSTIFY THE SOURCES OF THE SAID FIXED DEPOSITS IN THE BANKS. AT THE END OF THE ASSESSMENT PROCEEDINGS, THE AO OPINED THAT AN AMOUNT O F RS.96,319/- IS NOT REFLECTED IN THE BOOKS OF ACCOUNT FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. THEREFORE, AO TREATED THE SAME AS UNDISCLO SED INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT MADE IN FIXED DEP OSITS. ASSESSEE ATTEMPTED TO EXPLAIN THE SOURCES AS THE INCOM E EARNED IN THE EARLIER ASSESSMENT YEARS. HOWEVER, THE AO REJECTED THE SAME. EVENTUALLY, THE AO INVOKED THE PROVISIONS OF SECTION 69 OF THE ACT AND MADE ADDITION OF RS.96,319/-. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 3 SIMILAR ADDITIONS ARE MADE IN A.YRS. 2006-07 TO 2009-10. TH E ADDITION IN THESE 5 ASSESSMENT YEARS ON THIS ACCOUNT WO RKS OUT TO RS.8,52,508/-. THE SAME WAS REVISED TO RS.7,32,907/-. DETAILS OF THE RETURNS, INCOME DECLARED U/S.153C, ADDITIONS M ADE U/S.153C OR U/S.143(3) AS THE CASE MAY BE ARE GIVEN BELOW : ASSESSMENT YEARS PARTICULARS 2005-06 2006-07 2007-08 2008-09 2009-10 2011-12 ORIGINAL RETURNED INCOME 2,18,628 2,76,296 1,87,600 2,45,743 1,68,796 -- INCOME DECLARED IN THE RETURNS U/S.153/153C 2,99,240 3,50,530 3,15,302 2,00,31,760 2,89,710 9,88,710 UNEXPLAINED INVESTMENT IN FIXED DEPOSITS 96,319 1,25,524 5,26,604 79,060 25,000 10,62,182 ASSESSED INCOME 3,95,559 4,76,054 8,41,906 2,01,10,820 3,14,710 20,50,895 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) CONFIRM ED THE ADDITIONS MADE BY THE AO FOR ALL THE ASSESSMENT YEARS U NDER CONSIDERATION. THE FINDING GIVEN BY THE CIT(A) READS AS UNDER : 2.2 . 6 I HAVE CONSIDERED THE FACTS AND ARGUMENTS OF THE APPELLANT . INITIALLY , THE APPELLANT HAD TRIED TO EXPLAIN THE SOURCE OF TH E INVESTMENT MADE IN THE FDS AS BELONGING TO HIS HUF . THE LEARNED AO REJECTED THE APPELLANT ' S CONTENT I ON AND OBSERVED THAT THE APPELLANT DID NOT ESTABLIS H THAT HIS HUF EXISTED BEFORE THE SEARCH . THE APPELLANT HAD NOT FILED THE HUF ' S RETURN OF INCOME NOR DID HE FURNISH ITS CAPITAL A CCOUNT OR BALANCE SHEET . SUBSEQUENTLY, DURING THE POST-REMAND REPORT PROCEED INGS , THE APPELLANT DID NOT CONTEND THAT THE FDS BELONGED TO HIS HUF BUT HAS REQUESTED THAT TELESCOPIC BENEF I T BE GIVEN FOR THE INVESTMENT MADE IN THE FDS . IT WAS SUBMITTED THAT THE INVESTMENT IN THE FDS WAS MADE OUT OF T HE F UNDS AVAILABLE F R OM THE FDS MATURED IN THE EARLIER YEAR . IN OTHER WORDS , THE APPELLANT STATED THAT HE R EI NVESTED THE SAME FUNDS IN THE NEW FDS OUT OF THE FUNDS AVAILABLE ON MATURITY OF THE O LD FDS . 2 . 2 . 7 IT IS CLEAR FROM THE APPELLANT'S REQUEST THAT THE APPELLANT H A S GI V E N UP ITS CONTENTION THAT THE FDS BELONGED TO H I S HUF THOUGH HE HAS NOT EXP R ESSLY S TATE D THIS. THIS IS BECAUSE ; TELESCOPING OF THE INCOM E AGA I NST INVESTMENT C A N B E GR AN T ED ONLY I F INCOME AND INVESTMENTS ; BOTH ARE OF THE SAME PERSON . TELESCOPING CA N NOT BE GIVEN FOR THE INVESTMENT MADE BY ONE PERSON OUT OF THE INCOME OF THE OTHER PERSON . IN THIS CASE, THE APPELLANT CONTENDS THAT THE SOURCE OF THE INVESTMEN T IN THE N E W FDS I S OUT OF THE AMOUNT AVAILABLE ON MATURITY OF THE OLD FDS . I DO NOT FIND ANY P R OBLEM AGAINST THIS ARGUMENT AT THE ACADEMIC LEVEL . HOWEVER, IT I S ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 4 FUNDAMENTAL TH A T THE BENEFIT OF TELESCOP I NG CANNOT BE GRANTED WITHOUT THE CASH-FLOW STATEMENT AND W I THO UT EXAMINING THE DATE OF THE MATURITY AND DATE OF REINVESTMENT IN FDS . AGAIN, THE DATE OF MATURITY OF THE FDS SHOULD BE SUFFICIENTLY CLOSE TO DATE OF THE REINVES TMENT IN FDS TO SUPPORT THE CONCLUSION THAT THE SAME AMOUNT WAS REINVESTED IN THE NEW FDS . TH I S HAS TO BE ESTABLISHED W IT H THE CASH-FLOW STATEMENT . 2.2.8 THE APPELLANT HAS NOT FURNISHED THE CASH-FLOW STATEMENT, DATES OF MATURITY OF THE FDS AND DATE OF REINVESTME NT IN THE FRESH FDS. I FIND THE APPELLANTS DEFENCE IS HALF HEARTED. IN T HE BEGINNING, THE APPELLANT CONTENDED THAT THE INVESTMENT BELONGS TO HIS HUF AND NOW, IT IS STATED THAT IT IS THE SAME FUNDS, WHICH WERE ROT ATED IN THE FDS WITHOUT SUPPORTING THIS CONTENTION WITH EVIDENCE. THEREFORE, I DO NOT CONSIDER HIS EXPLANATION ON THE SOURCE OF THE INVES TMENT MADE IN THE FDS TO BE SATISFACTORY IN TERMS OF THE PROVISIONS O F THE SECTION 69A WITHOUT THE CASH-FLOW STATEMENT. I CONFIRM THE ADD ITION MADE BY THE LEARNED AO IN ALL THE AYS ON THIS ACCOUNT. 4.1 HOWEVER, IN RESPECT OF ADDITION FOR A.Y. 2007-08, THE CIT (A) MADE ADDITION OF RS.4,07,004/- AS AGAINST RS.5,26,604/- WRONGLY MA DE BY THE AO AND THUS GAVE RELIEF OF RS.1,19,600/-. 5. AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE FILED TH E PRESENT APPEALS BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS : ON THE FACTS AND IN LAW, 1.THE LEARNED CIT(A) ERRED IN REJECTING THE CONTENT ION OF THE APPELLANT FOR GRANTING TELESCOPIC BENEFIT REGARDING THE ADDITION OF RS.96319/- MADE ON ACCOUNT OF FIXED DEPOSITS WITH BANK. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 6. DURING THE PROCEEDINGS BEFORE US, LD. COUNSEL FOR THE A SSESSEE RELIED HEAVILY ON THE SUBMISSIONS MADE BEFORE THE AO/CIT(A ). HOWEVER, HE COULD NOT REBUT THE CONCLUSIONS DRAWN BY THE CIT(A) IN THE SAID PARAS 2.2.6 TO 2.2.8 OF HIS ORDER. 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED ON T HE ORDERS OF THE AO AND THE CIT(A). DURING THE REBUTTAL TIME, LD. COUNSE L FOR THE ASSESSEE FAIRLY MENTIONED THAT THE AMOUNTS INVOLVED IN ALL THESE APPEALS IS MERELY AROUND RS.7,32,910/- AND THEREFORE, THE DECISION IS LEFT TO THE BENCH. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 5 8. ON HEARING BOTH THE SIDES AND NOTING THE CONCESSION GIVEN BY THE LD. AR FOR THE ASSESSEE QUA THE SMALLNESS OF THE ADDITIONS MADE BY THE AO, WE FIND THAT THE ADDITIONS INVOLVED ARE BASED ON THE S EIZED DOCUMENTS DURING THE SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT. IN SUCH MATTERS, THE ONUS IS ON THE ASSESSEE FOR DISCHARGIN G BEFORE THE AO. AS SUCH, THE TRANSACTIONS ARE ESSENTIALLY IN CASH FORM. I N THIS REGARD, WE PERUSED THE REASONING GIVEN BY THE CIT(A) VIDE PARA NOS. 2.2.6 TO 2.2.8 OF HIS ORDER AND FIND THAT THE FINDING GIVEN BY THE CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCO RDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR THE A.YRS. 2005-06 T O 2009-10, BEING COMMON, ARE DISMISSED. 9. IN THE RESULT, APPEALS OF THE ASSESSEE FOR THE A.YRS. 2 005-06 TO 2009-10 ARE DISMISSED. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 2011-12. ITA NO.685/PUN/2016 A.Y. 2011-12 10. GROUNDS RAISED BY THE ASSESSEE ARE EXTRACTED HERE AS UNDE R : ON FACTS AND IN LAW, 1. THE LD.CIT(A) ERRED IN CONFIRMING ADDITION OF R S.10,62,182 ON ACCOUNT OF UNEXPLAINED MONEY U/S.69A, DISREGARDING THE SUBMISSIONS GIVEN BY THE APPELLANT. 2. THE LD.CIT(A) ERRED IN NOT APPRECIATING THE CONT ENTION OF THE APPELLANT THAT THE TOTAL CASH FOUND IN THE GROUP AS PER BOOKS IS MORE THAN CASH FOUND AND THEREFORE THE CASH FOUND IS DULY EXP LAINED AS THE APPELLANT IS ONE OF THE MEMBER OF THE GROUP. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. FROM THE ABOVE, IT IS EVIDENT THAT THE SOLITARY ISSUE RAIS ED BY THE ASSESSEE IN THIS APPEAL RELATES TO CASH SEIZURE OF RS.10,62 ,182/- AND ADDITION OF THE SAME IN THE ASSESSMENT PROCEEDINGS. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 6 11. BEFORE US, ON THIS ISSUE, LD. COUNSEL FILED THE FOLLOWING W RITTEN SUBMISSIONS AND THE SAME ARE EXTRACTED HERE AS UNDER : 1. THE SAID ISSUE OF CASH FOUND DURING THE COURSE OF SEARCH HAS BEEN CONSIDERED IN THE APPLICATION BEFORE SETTLEMENT COM MISSION FILED BY THE PARAG MILK FOOD PRODUCTS PVT. LTD., 2. THE APPELLANT SUBMITS THAT DURING THE COURSE OF SEARCH ACTION, CASH OF RS.38,41,000/- WAS FOUND AT MUMBAI AND CASH OF R S.16,28,929/- WAS FOUND AT MANCHAR. OUT OF THE TOTAL CASH FOUND OF R S.54,69,929/- CASH OF RS.15,00,000 WAS SEIZED AT MANCHAR AND RS.36,00,000 WAS SEIZED AT MUMBAI, THUS AGGREGATE CASH SEIZED AMOUNTS TO RS.51 ,00,000/- (REFER PAGE NO.3 OF THE ASSESSMENT ORDER). 3. THE APPELLANT SUBMITS THAT AS ON THE DATE OF SEA RCH ACTION, CASH IN HANDS IN THE REGULAR BOOKS OF ACCOUNT OF THE APPLIC ANT GROUP MEMBERS IS AS UNDER : 04.02.2011 PARAG FOODS PVT. LTD., 31,33,669.81 04.02.2011 BHAGYALAXMI DAIRY FARMS PVT. LTD. 18,29,927.50 04.02.2011 DEVENDRA PRAKASH SHAH 31,66,274.59 04.02.2011 PREETI DEVENDRA SHAH 62,423.00 04.02.2011 PRITAM PRAKASH SHAH 26,03,795.28 04.02.2011 NETRA PRITAM SHAH 9,09,152.25 04.02.2011 PARAG FOODS PALAMNER 7,92,850.00 TOTAL 1,24,98,092.43 4. THE APPLICANT THUS SUBMITS THAT THE TOTAL CASH F OUND IN THE COURSE OF SEARCH ACTION IS PART OF THE REGULAR BOOKS OF ACCOU NT OF THE APPLICANT GROUP AND HENCE, THE SAME IS ACCOUNTED CASH AND NOT CONSI DERED IN THE FUND FLOW STATEMENT. 5. THE ISSUE OF CASH FOUND DURING THE COURSE OF SEA RCH IS CONSIDERED AT PARA NO.10.2 OF THE ORDER OF SETTLEMENT COMMISSION A ND THEY HAVE ACCEPTED CONTENTION OF THE ISSUES (REFER PAGE NO.12 OF THE PB). 6. IN SUPPORT OF OUR ABOVE CONTENTION, WE ALSO WISH TO DRAW KIND ATTENTION OF YOUR HONOUR TO PARA NO.18 ON PAGE 29 A ND 30 OF THE ORDER OF SETTLEMENT COMMISSION WHEREIN OUR REQUEST FOR CAPITA LIZATION AND IN PARTICULARLY NOTE NO.2 WHEREIN ISSUE OF CASH FOUND IS DISCUSSED AND THE HONBLE SETTLEMENT COMMISSION IN THE ORDER ON PAGE 3 0 (REFER PAGE NO.30 OF THE PB) HAS CATEGORICALLY STATED THAT CASH FOUND AND SEIZED IS FULLY EXPLAINED BY CASH AS PER BOOKS OF ACCOUNTS OF THE A PPLICANT AND GROUP MEMBERS AND THEREFORE ADDITION MADE IN THE INDIVIDU AL MEMBERS DEVENDRA SHAH 38.41 LAKHS, PRITAM SHAH 3.94 LAKHS A ND PRAKASH SHAH RS.10.621 LAKHS IS UNCALLED FOR. WE HAVE CONSIDERE D THE CLAIM OF THE APPELLANT FOR CAPITALIZATION AS MENTIONED ABOVE AND WE FIND IT IN ORDER AND WE ALLOW THE CAPITALIZATION. 7. IN THE CIRCUMSTANCES, SINCE THE ISSUE IS COVERED BY THE SETTLEMENT COMMISSION, THE ADDITION MADE BY THE AO ON THE SAME ISSUE, THEREFORE IT WILL AMOUNT TO DOUBLE ADDITION WHICH IS NOT PERMISS IBLE AND NOT JUSTIFIED IN LAW. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 7 8. IN VIEW OF ABOVE FACTS, IT IS SUBMITTED BEFORE Y OUR HONOUR THAT THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED MONEY MADE BY THE AO AND CONFIRMED BY THE CIT(A) BE DELETED. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ORDER OF THE SETTLEMENT COMMISSION AND THE CONTE NTS OF PARA NOS.10.2 AND PARA NO.18 OF THE SAID ORDER OF INCOME TAX SETTLEMENT COMMISSION DATED 23-06-2014. LD. COUNSEL SUBMITTED THAT THE ITSC RECOGNISED THE FACT OF EXISTENCE OF ADEQUATE CASH BALANCE IN THE BOOKS OF THE GROUP AND DISCOURAGED MAKING SEPARATE ADDITION ON T HIS ACCOUNT IN ALL THE CASES IN GENERAL AND IN THE CASE OF THE ASSESSEE IN PARTICULAR. 12. LD. DR FOR THE REVENUE RELIED ON THE ORDERS OF THE A O AND THE CIT(A). 13. WE HEARD BOTH THE PARTIES ON THIS ISSUE OF ADDITION O F RS.10,62,182/-. WE HAVE CONSIDERED THE SUBMISSIONS MADE B Y THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS THE ORDER OF THE SET TLEMENT COMMISSION DATED 23-06-2014 ON THIS VERY ISSUE. WE FIND I T RELEVANT TO EXTRACT THE FINDINGS GIVEN BY THE SETTLEMENT COMMISSION AT PARA NO.10.2 AS WELL AS PARA NO.18. THE SAID PARAS READ AS UNDER : 10.2 CASH FOUND : (EXTRACT FROM THE ORDER OF ITSC) SHRI KARIA STATED THAT IN RESPECT OF CASH FOUND AT THE TIME OF SEARCH TOTALLING TO RS.93.11 LACS, RS.51 LACS WERE SEIZED . SHRI KARIA ALSO STATED THAT ON THE DATE OF SEARCH AS PER THE REGULAR BOOKS OF ACCOUNTS, THE CASH AVAILABLE WAS TOTALLING TO RS.1,24,98,092/- AND THE REFORE THE CASH FOUND NEED NO FURTHER EXPLANATION AS IT IS OUT OF THE CAS H ALREADY AVAILABLE IN THE BOOKS OF ACCOUNTS. THE CIT IN HIS RULE 9 REPORT HA S CLAIMED THAT THE EXPLANATION OF THE APPLICANT CANNOT BE ACCEPTED BEC AUSE THE UNACCOUNTED CASH WAS NOTHING BUT GENERATED CASH SALES OF MILK P RODUCT AND IT HAD NO CO-RELATION WITH CASH AVAILABLE IN THE BOOKS. WE HAVE CONSIDERED THIS ISSUE CAREFULLY AND WE FIN D THAT THE CASH AS PER THE BOOKS OF ACCOUNT IS MORE THAN THE C ASH FOUND AT THE TIME OF SEARCH. IN THESE CIRCUMSTANCES THE PLE A OF THE DEPARTMENT BASED ONLY ON PRESUMPTIONS CANNOT BE ACC EPTED. WE AS SUCH, DO NOT FIND ANY JUSTIFICATION OF ANY ADDIT ION ON THIS ACCOUNT. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 8 18. CAPITALIZATION : (EXTRACT FROM THE ORDER OF ITSC) THE APPLICANT HAS MADE FORMAL PRAYER FOR CAPITALIZA TION IS THE SOF FILED. DURING THE ARGUMENTS FOR CAPITALIZATION THE APPLICA NT EMPHASIZED FOR CAPITULATION BASED ON ACTUAL UTILIZATION OF THE FUN DS AS UNDER : SR.NO. PARTICULARS AMOUNT A. EXCESS STOCK OF FAT 2,25,87,120 B. INVESTMENT IN BHAGYALAXMI 42,28,500 C. SHARE CAPITAL WILL BE REVERSED 3,00,83,600 D. INVESTMENT IN RANJANGAON LAND 12,22,56,000 TOTAL 17,91,55,220 NOTE 1. CREDIT FOR RS.14 CRORES ON ACCOUNT OF EXPEN SES THROUGH HANDS OF INDIVIDUAL MEMBERS DEVENDRA SHAH (RS.5.12 CR.) NETR A SHAH (RS.4.72 CRORES) AND PRITI SHAH (0.06 CR.) NOT CAPITALIZED BUT CREDIT SOUGHT TOTAL RS.9,90,00,000/-. NOTE 2 : CASH FOUND AND SEIZED IS FULLY EXPLAINED B Y CASH AS PER BOOKS OF ACCOUNTS OF THE APPLICANT AND THE GROUP MEMBERS AND THEREFORE ADDITION MADE IN THE INDIVIDUAL MEMBERS DEVENDRA SHAH RS.38. 41 LAKHS, PRITAM SHAH RS.3.94 LAKHS, AND PRAKASH SHAH RS.10.621 LAKHS IS UNCALLED FOR. WE HAVE CONSIDERED THE CLAIM OF THE APPLICANT FOR T HE CAPITALIZATION AS MENTIONED ABOVE AND WE FIND IT IN ORDER AND WE ALLO W THE CAPITALIZATION. 14. THE ABOVE EXTRACTS ARE SELF EXPLANATORY AND THEY A RE IN FAVOUR OF THE ASSESSEE DIRECTLY. THE SETTLEMENT COMMISSION HAS ALR EADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND CONSIDERED THE A VAILABILITY OF CASH IN THE GROUP CONCERNS OF THE ASSESSEE AND ALLOWED THE TELESCOPY BEN EFIT OF THE SAID CASH SEIZED AGAINST THE CASH AVAILABLE ON RECOR DS. THE REASONING GIVEN BY THE CIT(A) ON THIS ISSUE IS UNSUSTAINABLE IN VIEW OF THE CATEGORICAL FINDING IN THE CASE OF THE ASSESSEE PARTICULARL Y. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE ORDERS OF AO/CI T(A) ARE REQUIRED TO BE REVERSED. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NOS. 680 TO 685/PUN/2016 A.YS.2005-06 TO 2009-10 & 2011-12 9 16. TO SUM UP, APPEALS OF THE ASSESSEE FOR A.YRS. 2005-06 TO 2009-10 ARE DISMISSED AND APPEAL OF THE ASSESSEE FOR A.Y. 2011-12 IS ALLOWED. ORDER PRONOUNCED ON 26 TH SEPTEMBER, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 26 TH SEPTEMBER , 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(APPEALS - 13 , PUNE. 4. THE PR. CIT(CENTRAL), PUNE. 5. , , B BENCH PUNE; 6. / GUARD FILE.