Appeal Details
Counselvise Citation
[2009] 115 COUNSELVISE.COM (IT) 1928 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 10 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-12-2009
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
21-12-2009
Assessment Year
2003-2004
Appeal Filed On
13-02-2007
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND A.N. PAHUJA, AM SHRI NARESHKUMAR P. KAPADIA, PROP. OF M/S M. JIVENRAM, PLOT 49, S.NO.1542 ,OUTSIDE KAMLA DARWAJA, UMERWADA, SURAT. V/S . ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-2, SURAT. PAN :ADWPK 8344E (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI R.N. VEPARI, AR REVENUE BY:- SHRI M.MATHIVANAN,DR O R D E R A.N. PAHUJA: THIS APPEAL FILED BY THE ASSESSEE AGAINST AN ORDE R DATED 20/12/2006 OF THE LD. CIT(A)-II,SURAT ,RAISES THE FOLLOWING GROUNDS: :- I. REJECTION OF BOOK RESULT (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE HELD THAT THERE WAS NO BASIS FOR REJECTING BOO K RESULT IN POST SURVEY PERIOD WHEN NO DEFECTS WERE POINTED OUT. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE BOOK RESULT OUGHT TO HAVE BEEN ACCEPTED. II. ADDITION TO GROSS PROFIT RS.10,32,467/- (1) THE LD. CIT(A) ERRED IN ESTIMATING GROSS PROFIT AT 17.04% ON THE TURNOVER OF THE POST SURVEY PERIOD WHEN THERE WAS N O JUSTIFICATION FOR MAKING THE ABOVE ESTIMATE. (2) THE APPELLANT SUBMITS THAT SINCE ALL DETAILS IN RESPECT OF SALE, QUANTITY TALLY BOTH FOR CLOTHS AND YARN AND REASON FOR LOWER RATE OF GROSS PROFIT PROVIDED, THE ADDITION OUGHT NOT TO HAVE BEEN CONFI RMED. (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION IS REQUIRED TO BE DELETED. ITA NO.700/AHD/2007 ASST. YEAR: 2003-04 ITA NO.700/AHD/2007 2 III UNACCOUNTED SALES -RS.60,000 1. THE LD. CIT(A) OUGHT TO HAVE DELETED AMOUNT OF RS.60,000/- IN RESPECT OF UNACCOUNTED SALE OF DISCLOSURE WHEN THE AMOUNT MADE IN THE INVESTMENT AS PER DISCLOSURE AT THE TIME OF SURVEY IN EXCESS STOCK CAN BE CONSIDERED TO HAVE BEEN FINANCED FROM SUCH AMOUN T. 2. THE APPELLANT SUBMITS THAT ON THE FACTS AND CIR CUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION. IV MISCELLANEOUS 1. THE LD. CIT(A) ERRED IN CONFIRMING INTEREST U/S 234B OF THE ACT. 2. THE LD. CIT(A) ERRED IN CONFIRMING INTEREST U/S 234D OF THE ACT .THE APPELLANT CARNVES LEAVE TO ADD, ALTER O R VARY ANY OF THE GROUNDS OF APPEAL. 2. ADVERTING FIRST TO GROUND NOS. I & II OF THE APP EAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOM E OF RS.42,01,396/- FILED ON 28/11/2003 BY THE ASSESSEE, ENGAGED IN MANUFACTURIN G AND SALE OF ART SILK CLOTH AS WELL AS TRADING IN YARN, AFTER BEING PROC ESSED U/S 143(1) OF THE INCOME-TAX ACT,1961[HEREINAFTER REFERRED TO AS THE ACT], WAS TAKEN UP FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 27.4.2004. IN THIS CASE, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED I N THE PREMISES OF THE ASSESSEE ON 11/9/2002,WHEN THE ASSESSEE DECLARED AD DITIONAL INCOME OF RS. 27,64,339/- AS UNDER :- (I) EXCESS STOCK OF YARN RS.8,32,350/- EXCESS STOCK OF GREY CLOTH RS.15,67,806 /- RS.24,00,156 (II) UNACCOUNTED SALES RS.60,000/- (III) UNACCOUNTED INVESTMENT IN CONSTRUCTION RS.3,04,183/- RS.3,64,183 TOTA L DISCLOSURE : RS.27,04,339/- 2.1 DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE ASSESSEE REFL ECTED NET PROFIT OF RS. 38,73,997/-, INCLUDING ADDITIONAL INCOME OF RS.27,6 4,39/- AND THAT THE INCOME REFLECTED FOR THE ENTIRE YEAR WAS LESS THAN THE INC OME DECLARED IN THE MIDDLE OF THE YEAR. THE AO WAS OF THE OPINION THAT THE AS SESSSEE DID NOT REFLECT ANY PROFIT FOR THE POST SURVEY PERIOD AND HAD IN FACT, SHOWN SOME LOSS, RESULTING IN REDUCTION OF ADDITIONAL INCOME DECLARED DURING THE SURVEY. THE AO FURTHER ITA NO.700/AHD/2007 3 NOTICED FROM THE COMMENTS OF THE AUDITORS IN THE AU DIT REPORT THAT THE ASSESSEE HAD NOT MAINTAINED REGULAR STOCK RECORDS A ND THE QUANTITATIVE DETAILS WERE COMPILED FROM THE FINANCIAL BOOKS OF A CCOUNT. SINCE IT WAS NOTICED DURING THE COURSE OF SURVEY THAT THE ASSES SEE CARRIED ON SUBSTANTIAL BUSINESS OUTSIDE THE BOOKS OF ACCOUNT AND CONSEQUEN TLY,UNACCOUNTED STOCK WAS DETECTED AS ALSO IN THE ABSENCE OF STOCK REGIS TER, THE AO CONCLUDED THAT CLOSING STOCK SHOWN BY THE ASSESSEE WAS NOT AMENABL E TO VERIFICATION. MOREOVER, GP RATE DECLARED IN THE YEAR WAS MUCH BEL OW VIS--VIS PRECEDING YEARS IN THE CLOTH DIVISION AS REVEALED FROM THE FO LLOWING DETAILS: ASSESSMENT YEAR TURNOVER RATE OF PROFIT 2001-02 2,12,03,415 15.06% 2002-03 1,47,53,657 19.01% 2003-04 2,20.72,263 9.71% 2.2 FURTHER ANALYSIS OF THE BOOK RESULTS REVEA LED THAT THE GP RATE FOR THE PRE-SURVEY PERIOD WORKED OUT TO 10.00% ON THE TURNO VER OF RS.83,07,810/- AND 9.54% FOR THE POST-SURVEY PERIOD TURNOVER OF RS .1,37,64,453/-. THE AO NOTED THAT IN THE POST SURVEY PERIOD, THE ASSESSEE HAD DISCLOSED GROSS PROFIT RATE OF 9.54%. IF THE ADDITIONAL INCOME DECLARED DU RING THE SURVEY WAS INCLUDED, THE GP DURING THE PRE-SURVEY PERIOD WORKE D OUT TO 38.89%. SINCE THE ASSESSEE WAS FOUND TO BE CARRYING ON SUBSTANTIA L BUSINESS OUTSIDE THE BOOKS OF ACCOUNTS WHILE THE ASSESSEE DID NOT MAINTA IN ANY STOCK REGISTER OR QUANTITATIVE RECORDS NOR THE CLOSING STOCK WAS AME NABLE TO VERIFICATION AND HAD DECLARED ADDITIONAL INCOME OF RS. 27,64,339/- I N THE PRE-SURVEY PERIOD WHILE NO JUSTIFICATION WAS FORTHCOMING FOR THE LOW GP IN THE POST SURVEY PERIOD, THE AO REJECTED THE BOOK RESULTS, HAVING RECOURSE T O PROVISIONS OF SEC. 145(3) OF THE ACT. CONSEQUENTLY, THE AO ADDED AN AMOUNT OF RS. 10,32,467/-, ADOPTING GP RATE OF 17.04% ( AVERAGE GP RATE FOR T HE AYS. 2001-02 AND 2002-03 ) ON THE TURNOVER OF THE POST SURVEY PERIOD . INTER ALIA, THE AO RELIED UPON DECISION DATED 30.8.2005 S IN THE CASE OF WHIT ELINE CHEMICALS VS. ITO IN ITA NO.3509/AHD./2004,CIT VS. HARICHEMICALS,ITA NO.254/AHD./1996,OJAS TECHNOCHEM,ITA NO.1394/AHD./1999 & SUPER INDUSTRIES VS. ACIT,ITA NO.1911/AHD./1999. ITA NO.700/AHD/2007 4 3. ON APPEAL, THE ASSESSEE CONTENDED THAT THERE WAS SUBSTANTIAL INCREASE IN THE AVERAGE PURCHASE PRICE VIS--VIS SE LLING PRICE WHILE BUSINESS OF GREY CLOTH MANUFACTURING WAS HIGHLY COMPETITIVE . THE FLUCTUATIONS IN RAW MATERIAL PRICE AFFECTED THEIR MARGINS. THE STOCK DE CLARED IN THE COURSE OF SURVEY WAS VALUED AT MARKET VALUE AND THEREFORE, CO ULD NOT BE SOLD AT A HIGHER MARGIN. HOWEVER, THE LD. CIT(A), AFTER HAVIN G A REMAND REPORT FROM THE AO AND COMMENTS OF THE ASSESSEE THEREON, FOUND TH AT UNDISPUTEDLY FIVE CONCERNS OF THE FAMILY OPERATED FROM THE SAME PREMI SES. SINCE THE PRICE OF YARN FLUCTUATED ON DAILY BASIS, CONSIDERING THE AVE RAGE PURCHASE PRICE, INCREASE IN PURCHASE PRICE WAS ALMOST DOUBLE IN M/S PUNAMCHAND KAPADIA AS COMPARED TO THE OTHER THREE CONCERNS WHILE IN BP TEXTILES ,THERE WAS DECREASE. GP RATE IN BP TEXTILES FOR THE WHOLE YEAR WAS 17.97%.ADMITTEDLY PURCHASES AND STOCK OF RAW MATERIAL AND FINISHED GO ODS HAVING BEEN KEPT IN THE SAME PREMISES BY THE FIVE CONCERNS, STOCK WAS N OT IDENTIFIABLE AND THEREFORE, THE ASSESSEE ADOPTED FIGURES PURELY ON ESTIMATE, THE LD. CIT(A) OBSERVED. KEEPING IN VIEW THE OBSERVATIONS OF THE A UDITORS AND THE FACT THAT GOODS VALUED AT RS. 1,20,00,783/- WERE NOT ACCOUNTE D FOR IN THE BOOKS OF ACCOUNTS WHILE THEREBEING NO COGENT REASONS FOR FAL L IN GP BY ALMOST 10%, FOLLOWING THE DECISIONS RELIED UPON BY THE AO IN TH E CASE OF M/S WHITELINE CHEMICALS(SUPRA) AND THREE OTHER CASES REFERRED TO BY THE AO, THE LD. CIT(A) UPHELD THE REJECTION OF BOOKS AND ESTIMATION OF GP BY THE AO. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US. THE LD . AR ON BEHALF OF THE ASSESSEE, SHRI R.V. VEPARI WHILE REITERATING THEIR SUBMISSIONS BEFORE THE LOWER AUTHORITIES, RELIED UPON A DECISION DATED 8 TH SEPTEMBER, 2008 OF THE TRIBUNAL IN THE CASE OF BHARATKUMAR P KAPADIA IN IT A NO 699/AHD/2007 FOR THE AY 2003-04 AND ITA NO.1550/AHD/2008 FOR THE AY 2004-05. THE LD. AR ADDED THAT ON IDENTICAL FACTS AND CIRCUMSTANCES, T HE TRIBUNAL WAS FAIR ENOUGH TO REDUCE THE ADDITION MADE BY ASSESSING OFFICER AN D CONFIRMED BY CIT(A). HE CONTENDED THAT THE ADDITION BE SUITABLY REDUCED IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL. THE LD. AR ADDED THAT GP RATE OF 10% IN THE PRE- SURVEY PERIOD HAS BEEN ACCEPTED BY THE AO.ON THE OT HER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE LD. CIT(A) AND ADDED THAT GP RATE OF 10% IN THE PRE-SURVEY PERIOD WAS NEVER ACCEPTED BY ITA NO.700/AHD/2007 5 THE AO. IT WAS ONLY BECAUSE THAT THE ASSESSEE SURRE NDERED AN AMOUNT OF RS. 24,00,156/- ON ACCOUNT OF EXCESS STOCK THAT THE TR ADING RESULTS FOR THE PRE- SURVEY PERIOD WERE NOT DISTURBED. 5. WE HAVE HEARD BOTH THE PARTIES AND GON E THROUGH THE FACTS OF THE CASE. UNDISPUTEDLY, THE ASSESSEE WAS FOUND TO BE CA RRYING ON SUBSTANTIAL BUSINESS OUTSIDE THE BOOKS OF ACCOUNTS WHILE THE AS SESSEE DID NOT MAINTAIN ANY STOCK REGISTER OR QUANTITATIVE RECORDS. CONSEQU ENTLY, THE ASSESSEE DECLARED ADDITIONAL INCOME OF RS. 27,64,339/- IN TH E PRE-SURVEY PERIOD, WHICH INCLUDED EXCESS STOCK OF YARN AND GREY CLOTH WORTH RS.24,00,156/- . AS A RESULT, TRADING RESULTS FOR THE PRE-SURVEY PERIOD I MPROVED CONSIDERABLY AND WERE NOT DISTURBED. FOR THE POST SURVEY PERIOD, GP RATE WAS FOUND TO BE MUCH LOWER AT 9.54% AS COMPARED TO 19.01% IN THE PR ECEDING ASSESSMENT YEAR AND 15.06% IN THE AY 2001-02. THE AO AND THE LD. CIT(A) FOUND THAT CLOSING STOCK WAS NOT AMENABLE TO VERIFICATION IN THE ABSENCE OF STOCK RECORDS AND THE FACT THAT FIVE FAMILY CONCERNS, IN CLUDING THE ASSESSEE, OPERATED FROM THE SAME PREMISES AND STOCK OF EACH O F THESE CONCERNS BEING NOT IDENTIFIABLE. THEREFORE, GOODS VALUED AT RS. 1, 20,00,783/- WERE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS, ACCORDING T O THE LD. CIT(A). IN THE LIGHT OF THESE FACTS AND THERE BEING NO MATERIAL IN SUPPO RT OF THE EXPLANATION THAT INCREASE IN SELLING PRICE WAS NOT COMMENSURATE WITH INCREASE IN PURCHASE OF RAW MATERIAL, THE LD. CIT(A) UPHELD THE FINDINGS OF THE AO IN REJECTING BOOK RESULTS AND ESTIMATION OF GP FOR THE POST SURVEY PE RIOD. THE LD. AR ON BEHALF OF THE ASSESSEE APPEARING BEFORE US DID NOT DISPUTE THE AFORESAID FINDINGS OF FACTS RECORDED BY THE LOWER AUTHORITIES. IN THESE C IRCUMSTANCES, ONCE THE ASSESSEE FAILED TO FURNISH THE RELEVANT DETAILS AND SUBSTANTIATE THE TRADING RESULTS FOR THE RELEVANT PERIOD UNDER CONSIDERATIO N, IT WAS OPEN TO THE AO AND THE LD. CIT(A) TO REJECT THE BOOK RESULTS AND ESTIM ATE THE GROSS PROFIT. IT IS NOT A CASE WHERE BOOKS OF ACCOUNT ARE PROPERLY MAINTAIN ED AND THE ASSESSING OFFICER HAS SUBSTITUTED HIS OWN ESTIMATE IGNORING T HE BOOKS OF ACCOUNT, WITHOUT GIVING ANY REASONS. IT MAY BE OBSERVED UND ER THE CIRCUMSTANCES THAT IT IS DIFFICULT TO CATALOGUE VARIOUS TYPES OF DEFEC TS IN THE ACCOUNT BOOKS OF AN ASSESSEE WHICH MAY RENDER REJECTION OF ACCOUNTS ON THE GROUND THAT ACCOUNTS ARE NOT COMPLETE AND FROM WHICH THE CORRECT PROFIT CANNOT BE DEDUCED. ITA NO.700/AHD/2007 6 WHETHER PRESENCE OR ABSENCE OF STOCK REGISTER IS MA TERIAL OR NOT, WOULD DEPEND UPON THE TYPE OF BUSINESS. IN THE CASE UNDER CONSIDERATION, UNDISPUTEDLY, SUBSTANTIAL STOCK WAS FOUND TO BE UNA CCOUNTED WHILE NO STOCK REGISTER OR QUANTITATIVE RECORDS WERE FOUND TO BE M AINTAINED . CONSEQUENTLY, THE CLOSING STOCK WAS NOT AMENABLE TO VERIFICATION . IT IS TRUE THAT ABSENCE OF STOCK REGISTER OR CASH MEMOS IN A GIVEN SITUATION M AY NOT PER SE LEAD TO AN INFERENCE THAT ACCOUNTS ARE FALSE OR INCOMPLETE. HO WEVER, WHERE THE ABSENCE OF STOCK REGISTER, ETC. IS COUPLED WITH OTHER FACTO RS LIKE EXCESS STOCK HAVING BEEN FOUND DURING THE COURSE OF SURVEY AND SHARP DE CLINE IN PROFIT, GIVE RISE TO LEGITIMATE INFERENCE THAT ALL IS NOT WELL WITH T HE BOOKS . SUCH IS THE SITUATION IN THE INSTANT CASE AND HENCE WE HOLD THAT THE LD. CIT(A) IS QUITE JUSTIFIED IN UPHOLDING THE FINDINGS OF THE AO IN REJECTING THE B OOK RESULTS, HAVING RECOURSE TO PROVISIONS OF SEC.145(3) OF THE ACT THIS VIEW OF OURS IS ALSO FORTIFIED BY THE DECISION OF HONBLE ORISSA HIGH COURT IN THE CASE O F RATANLAL OMPRAKASH VS. CIT,132 ITR 640(ORISSA), AWADHESH PRATAPSINGH ABDUL RAHEMAN & BROS VS CIT (1994) 210 ITR(ALL) AND DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KY PILLIAH AND SONS, 63 ITR 411(SC) .EVEN IN THE DECISION DATED 8 TH SEPTEMBER, 2008 OF THE TRIBUNAL IN THE CASE OF BHA RATKUMAR P KAPADIA IN ITA NO.699/AHD/2007 FOR THE AY 2003-04 A ND ITA NO.1550/AHD/2008 FOR THE AY 2004-05, RELIED UPON O N BEHALF OF THE ASSESSEE AND THE LD. AR HAVING ADMITTED THAT THE FACTS AND CIRCUMSTANCES IN THE SAID DECISION ARE IDENTICAL WITH THE FACTS IN THE CASE U NDER CONSIDERATION, ITAT UPHELD THE REJJECTION OF BOOK RESULTS. IN VIEW OF T HE FOREGOING, GROUND NO. I IN THE APPEAL IS DISMISSED. 5.1 AS REGARDS GROUND NO. II RELATING TO ESTIMA TION OF PROFITS, NO DOUBT THE AO/CIT(A) SHOULD TRY TO MAKE AN HONEST AND FAIR EST IMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TO TALLY ARBITRARILY, BUT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED I N A BEST JUDGMENT ASSESSMENT, AND IT IS THE ASSESSEE HIMSELF WHO IS T O BLAME AS HE DID NOT SUBMIT PROPER ACCOUNTS AND DETAILS.[ KACHWALA GEMS VS JCIT, 288 ITR 10 (2007)(SC) ]. SINCE THE ASSESSEE DID NOT SUBSTANT IATE THE TRADING RESULTS WITH COGENT EVIDENCE BEFORE THE AO OR THE LD. CIT(A ) NOR EVEN ANY MATERIAL HAS BEEN PLACED BEFORE US SO AS TO TAKE A DIFFEREN T VIEW IN THE MATTER, WE DO ITA NO.700/AHD/2007 7 NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LEA RNED CIT(A) WHILE UPHOLDING REJECTION OF BOOK RESULTS AND SUSTAINING THE ADDITI ON , APPLYING THE AVERAGE GP RATE OF THE IMMEDIATE PRECEDING TWO ASSESSMENT YEAR S. IT IS TRUE THAT ASSESSING OFFICER OR THE CIT(A) ARE NOT FETTERED BY TECHNICAL RULES OF EVIDENCE AND ARE ENTITLED TO ACT ON MATERIALS WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN COURT OF LAW, NEVERTHELESS, THE ASSESSING OFFICER S HOULD ADOPT A METHOD WHICH MUST REFLECT THE PROFITS TRULY AND JUSTLY[ GE MINI PICURES LTD. VS CIT (1958) 33 ITR 547 (MAD).] FOR ESTIMATING THE GROSS PROFIT, THE LD. CIT(A) CAN ALWAYS HAVE A LOOK AT THE MARGIN RETURNED IN COMPAR ABLE CASES OR EVEN IN ASSESSEES OWN CASE. WE ARE OF THE OPINION THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THERE WA S ABNORMAL FALL IN GP RATE IN THE PERIOD UNDER CONSIDERATION VIS--VIS PRECEDI NG TWO ASSESSMENT YEARS AND NO COGENT EVIDENCE HAS BEEN PLACED BEFORE THE LD. CIT(A) OR EVEN BEFORE US IN SUPPORT OF BOOK RESULTS WHILE HUGE UNACCOUNTE D STOCK WAS DETECTED DURING THE SURVEY, THE LD. CIT(A) IS JUSTIFIED IN A PPLYING THE AVERAGE GP RATE[17.04%] OF THE IMMEDIATE PRECEDING TWO ASSESSM ENT YEARS WHILE UPHOLDING REJECTION OF BOOK RESULTS, HAVING RECOURS E TO PROVISIONS OF SECTION 145(3) OF THE ACT. WITH RESPECT , WE ARE NOT INCLIN ED TO FOLLOW THE VIEW AS REGARDS REDUCTION OF ADDITION BY ALMOST 50% IN THE CASE OF BHARATKUMAR P KAPADIA(SUPRA) BY THE ITAT ON THE GROUND THAT THERE WAS SLIGHT FALL IN GP RATE, SINCE IN THE CASE UNDER CONSIDERATION GP DECLINED B Y ALMOST 100%. IT WAS 19.01% IN THE PRECEDING ASSESSMENT YEAR AND 9.54% I N THE PERIOD UNDER CONSIDERATION. IN THIS VIEW OF THE MATTER AND CONS IDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). THEREFORE, GROUND N O II IN THE APPEAL IS ALSO DISMISSED. 6. GROUND NO. III RELATES TO AN AMOUNT OF RS. 60,00 0 OFFERED TO TAX BY THE ASSESSEE AT THE TIME OF SURVEY ON ACCOUNT OF UNACCO UNTED SALES. THERE IS NO DISCUSSION ON THIS ASPECT IN THE ASSESSMENT ORDER. ON APPEAL, THE ASSESSEE CONTENDED THAT THIS SUM WAS AVAILABLE WITH THE ASSE SSEE TO MEET THE INVESTMENT THAT WAS DISCLOSED. HOWEVER , THERE IS N OTHING TO SUGGEST THAT UNACCOUNTED SALES LED TO THE UNACCOUNTED INVESTMENT . IN HIS REMAND REPORT, THE AO CONTENDED THAT THERE WAS NO DIRECT CO-RELATI ON BETWEEN THE ITA NO.700/AHD/2007 8 UNACCOUNTED SALES AND UNACCOUNTED INVESTMENT. IN TH ESE CIRCUMSTANCES, WHILE REFERRING TO THE BREAK UP OF DISCLOSURE MADE BY THE ASSESSEE HIMSELF, THE LD. CIT(A) REJECTED THE PLEA OF THE ASSESSEE ON THE GROUND THAT THERE WAS NO EVIDENCE TO SHOW THAT ENTIRE INCOME FROM UNA CCOUNTED SALES WAS INVESTED EITHER IN PURCHASE OF YARN OR IN ANY OTHER INVESTMENT. 7. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID CONCLUSION OF THE LD. CIT(A). WE FIND FROM THE BREAK UP OF DIS CLOSURE MADE BY THE ASSESSEE AT THE TIME OF SURVEY THAT AN AMOUNT OF RS . 60,000 HAS BEEN OFFERED TO TAX BESIDES UNDISCLOSED INVESTMENT IN Y ARN AND GREY CLOTH AND IN CONSTRUCTION OF FACTORY. NOT AN IOTA OF EVIDENCE HA S BEEN PRODUCED EITHER BEFORE THE AO OR THE LD. CIT(A) IN SUPPORT OF THE CLAIM THAT UNACCOUNTED SALES HAVE BEEN UTILIZED IN UNACCOUNTED INVESTMENT. EVEN BEFORE US SITUATION IS NO BETTER. WE FIND THAT A SIMILAR GROUND IN THE CASE O F BHARATKUMAR P KAPADIA(SUPRA) WAS NOT PRESSED BEFORE THE ITAT. IN THESE CIRCUMSTANCES , WE ARE NOT INCLINED TO INTERFERE WITH THE CONCLUSION O F THE LD. CIT(A). THEREFORE, GROUND NO. III IN THE APPEAL IS ALSO DISMISSED. 8. GROUND NO. IV(1) & (2) RELATES TO CHARGING OF INTEREST U/S 234B & 234D OF THE ACT. THE LD. AR ON BEHALF OF THE ASSESS EE DID NOT MAKE ANY SUBMISSIONS BEFORE US ON THIS GROUND WHILE LEVY O F INTEREST U/S 234B & 234D OF THE ACT BEING MANDATORY [COMMISSIONER OF INCOME TAX.VS ANJUM M. H. GHASWALA AND OTHERS,252 ITR 1(SC)], THESE GROUNDS ARE DISMISSED.. 9. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TER MS OF RESIDUARY GROUND NO. IV(3), THIS GROUND IS ALSO DISMISSED. 10. IN THE RESULT, APPEAL IS DISMISSED. SD/- SD/ - (BHAVNESH SAINI) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 31/12/2009 ORDER PRONOUNCED IN OPEN COURT ON 31 /12 /2009 ITA NO.700/AHD/2007 9 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-2, SU RAT.. 3. THE CIT(APPEALS)-II,SURAT 4. THE CIT CONCERNED. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD
