Savita Prakashchand Modi, Dhule V. Assistant Commissioner of Income-tax,

ITA 751/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1696 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-06-2016
• Assessment Year: misc
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Gift; Business income; Document seized; Corroborative evidences; Documents seized
• Section: 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.750/PN/2014 BLOCK PERIOD : 1997-98 TO 2002-03 MAHENDRA PRAKASHCHAND MODI, OPP. AGRAWAL BHAVAN, USS GALLI, DHULE 424 001 PAN NO.AHUPM7465N . / APPELLANT V/S ACIT, CIRCLE - 3(1), DHULE . / RESPONDENT . / ITA NO.751/PN/2014 BLOCK PERIOD : 1997-98 TO 2002-03 SAVITA PRAKASHCHAND MODI, OPP. AGRAWAL BHAVAN, USS GALLI, DHULE 424 001 PAN NO.AHYPM7488H . / APPELLANT V/S ACIT, CIRCLE - 3(1), DHULE . / RESPONDENT . / ITA NO.752/PN/2014 BLOCK PERIOD : 1997-98 TO 2002-03 RATIMOHAN PRAKASHCHAND MODI, OPP. AGRAWAL BHAVAN, USS GALLI, DHULE 424 001 PAN NO.AHYPM7483N . / APPELLANT V/S ACIT, CIRCLE - 3(1), DHULE . / RESPONDENT . / ITA NO.753/PN/2014 BLOCK PERIOD : 1997-98 TO 2002-03 ARCHANA PRAKASHCHAND MODI, OPP. AGRAWAL BHAVAN, USS GALLI, DHULE 424 001 PAN NO.AKWPM7960R . / APPELLANT V/S ACIT, CIRCLE - 3(1), DHULE . / RESPONDENT 2 ITA NOS.750 TO 754/PN/2014 . / ITA NO.754/PN/2014 BLOCK PERIOD : 1997-98 TO 2002-03 LATE PRAKASHCHAND NANDLAL MODI, L/H SHRI MAHENDRA PRAKASHCHAND MODI OPP. AGRAWAL BHAVAN, USS GALLI, DHULE 424 001 PAN NO.AHYPM7849G . / APPELLANT V/S ACIT, CIRCLE - 3(1), DHULE . / RESPONDENT / ASSESSEE BY : SHRI SUNIL PATHAK / RESPONDENT BY : SHRI HITENDRA NINAWE / ORDER PER R.K.PANDA, AM : THE ABOVE BATCH OF APPEALS FILED BY THE RESPECTIVE ASSE SSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 14-12-2014 OF THE CIT(A)-I, NASHIK RELATING TO THE BLOCK PERIOD 1997-98 TO 2002-03 (UPTO 17-09-2002). SINCE IDENTICAL ISSUES HAVE BEEN RAISED BY TH ESE ASSESSEES IN THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.754/PN/2014 (LATE PRAKASHCHAND NANDLAL MODI) : 2. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNA L. FACTS OF THE CASE, IN BRIEF, ARE THAT ACTION U/S.132 OF THE I.T. A CT WAS TAKEN IN THE CASE OF CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT , DHULE ON 17-09-2002. FROM THE SEIZED DOCUMENTS, IT WAS NOTICED T HAT THE ASSESSEE HAD KEPT FIXED DEPOSITS WITH THE SAID PAT SANSTHA AS UN DER : 23 - 03 - 2002 CHINTAMANI NAGARI SAH. PAT PEDHI MARYADIT, DHULE RS.1,00,000/ - 29 - 08 - 2001 - DO - RS.25,000/ - 29 - 08 - 2001 - DO - RS.25,000/ - / DATE OF HEARING :07.06.2016 / DATE OF PRONOUNCEMENT:08.06.2016 3 ITA NOS.750 TO 754/PN/2014 3. THE SOURCE OF INVESTMENT WAS NOT SATISFACTORILY EXPLA INED BY THE ASSESSEE BEFORE THE ADIT (INVESTIGATION), NASHIK. NOTICE U/ S.158BD DATED 24-02-2003 WAS SERVED ON THE ASSESSEE ON 07-03-2003. THE ASSESSEE FILED RETURN OF INCOME FOR THE B LOCK PERIOD ON 28-01-2005 DISCLOSING TOTAL INCOME OF RS.3,17,700/-. THE A O COMPLETED THE ASSESSMENT U/S.158BC(C) R.W.S. 158BD OF THE ACT ON 24- 03-2005 DETERMINING THE UNDISCLOSED INCOME AT RS.3,72,267/- , THE DETAILS OF WHICH ARE AS UNDER : 4. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO HAD PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE APPROACHED THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 13-08-2010 WHILE PARTLY ALLOWING THE APPEAL OF THE ASSESSEE RESTORED THE ISSUE TO THE FILE OF THE AO WITH THE FOLLOWING OBSERVATION : 4.5 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT FACTS OF THE CASE. WE ARE OF THE OPINION THAT THE REVENUE HAS MERE LY RELIED UPON THE STATEMENT GIVEN DURING THE SEARCH OPERATIONS AND NO CR EDIT WAS GIVEN TO THE EXPLANATIONS OFFERED BY THE ASSESSEE. IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT THE FACTS OFFE RED BY THE ASSESSEE MUST BE EXAMINED IN DEPTH AND THE SAME MUST BE GIVEN WEIGH TAGE OVER THE STATEMENTS TAKEN ON OATH. OFTER ALL, THE FACTS ARE MO RE SACROSANCT. IN ALL FAIRNESS, WE ARE OF THE OPINION THAT THIS ISSUE MUST BE R EFERRED TO THE FILES OF THE AO FOR DETAILED INVESTIGATION TO THE ISSUES AS TO W HETHER ASSESSEE HAS FIXED DEPOSITS PRIOR TO THE BLOCK PERIOD AND THE SOURC ES THEREOF AND WHETHER THE INTEREST ACCRUALS ON THE, SAID DEPOSIT ACCO UNTS FOR THE INCOME GENERATED IN ALL THE A.YS. OF THE BLOCK PERIOD AND O THER RELATED ISSUES. THE AO IS DIRECTED TO COMPUTE THE UNDISCLOSED INCOME OF TH E ASSESSEE FOR THE BLOCK PERIOD AFTER CONSIDERING THE FACTUAL POSITION R ATHER THAN ON MERE STATEMENT. WHILE COMPUTING THE UNDISCLOSED INCOME, THE AO SHALL REDUCE THE INCOME WHICH IS OTHERWISE NOT SUBJECT TO TAX AS PER THE LAW AND ALSO IN VIEW OF THE RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF CHAIN SUKH RATHI (SUPRA). ACCORDINGLY, THIS PART OF THE GROUND IS SET ASI DE. ASST. YEAR AMOUNT 1997 - 98 RS.70, 196/ - 1998 - 99 RS.79,358/ - 1999 - 00 RS.1,06,293/ - 2001 - 02 RS.59,321/ - 2002 - 03 RS.57,099/ - 4 ITA NOS.750 TO 754/PN/2014 5. THE AO THEREAFTER COMPLETED THE ASSESSMENT DETERMIN ING THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD AT RS.1,38,529/-. 6. IN APPEAL THE LD.CIT(A) GAVE PART RELIEF TO THE ASSESS EE BY OBSERVING AS UNDER : 8. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , THE ORDERS OF THE HON'BLE ITAT A ND CIT(A) AND THE SUBMISSION FILED BY TH E A PPELL A NT. THE DETAILED FACTS OF THE CASE HAVE ALREADY B E EN GIVEN IN THE PRECED I NG P A RAS. TH E AO VIDE ORDER DATED 30 / 12/2011 PASSED U / S 158BD R . W . S. 158BC R. W . S . 14 3 (3), R.W.S. 254 OF THE I.T. ACT MADE AN ADDITION OF RS. 30 , 496 / - F OR AY . 1 9 97-98 AND RS. 23,672 / - FOR A . Y . 1999 - 2000 ON ACCOUNT OF UN E XPLAINED IN V E S TM E NT IN FDR S. WHILE THE CIT(A) GAVE A RELIEF OF RS.20 , 432 / - FOR A.Y . 19 99 -2000, A N A DDITION OF RS.20 , 432/- HAS BEEN MADE FOR A . Y. 2000-01 PURSUANT TO H IS ORDER DATED 25 / 05/2006. AS GIVEN IN THE FACTS, CERTAIN FDRS IN CHINT A M ANI NA GARI S A HAK A RI PATH PEDHI MARYADIT, DHULE WERE FOUND IN TH E NAME OF TH E A PP E LL A NT DURIN G SEARCH ACTION U / S 132 OF THE ACT IN THE CA S E OF TH E ABO VE P A T SA N S THA . TH E APPELLANT HAS GIVEN A DETAILED CASH FLOW STATEMENT A ND O TH E R SUPP O RTIN G DOCUMENTS TO EXPLAIN THE SOURCE OF THESE FDRS. TH E APP E L LA NT WAS HAVING BUSINESS INCOME OF RS.15,000 / - AND RS.32,000 / - FOR A . Y S. 19 9 7- 9 8 A ND 2000-01 RESPECTIVELY. I FIND FROM THE RECORDS THAT THE AO HAS NOT G I VE N A N Y CREDIT FOR THE SAID BUSIN ES S INCOME TOWARDS FDRS. WHILE IT IS TRUE THAT T H E APP E LL A NT HA S NOT BEEN ABLE TO FULLY MATCH THE FDRS WITH THE A VAIL A B I LIT Y OF F U ND S, A O WA S A L S O NOT JUSTIFIED IN NOT GIVING ANY CREDIT O F TH E BUSIN ESS INCOM E TO WA RD S INVESTMENTS IN FDRS. IN THE FACTS AND THE CIRCUMSTANC E S O F T H E C ASE AND A LS O KEEPING IN VIEW THE SMALLNESS OF THE TAX INVOLVED AND TH E NUM BE R OF Y EARS TH ESE CASES HAVE BE E N PENDING IN APPEAL [ SIN C E 200 2 ] , I AM OF TH E C ON S I DE RE D OPIN I ON THAT 25% OF THE BUSINESS INCOME COULD B E ALLO WE D TOW A RDS S OURC E OF TH E UNEXPLAINED FDRS FOR A . Y. 1997 - 98. THIS WILL MEET THE E ND S OF THE JU S TI C E . SIMILARLY A CREDIT OF RS.3,240 / - [I . E. THE NET ADDITION R E TAIN E D ON A CC OUNT O F UNE XPLAINED FDR AFTER GIVING RELIEF BY TH E CIT( A )] I S GIV E N T O TH E A PPELLANT F O R A . Y. 1999 - 2000 OUT OF HIS BUSINESS INCOME. TH E REFOR E , TH E APP E LL A NT G E T S A BEN EFIT OF RS. 3,750 / - FOR A . Y . 1997 -98 (25 % OF RS.1 5 ,000 / -), RS. 3 , 24 0 / - FOR A .Y. 19 99 -2000 AND RS.8,000/- FOR 2000-01 (25% OF RS.32,000/-) . IN TOTAL, THE APPELLANT GETS RELIEF OF RS.14,990/-. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE CIT(A) ERRED IN DETERMINING THE UNDISCLOSED I NCOME AT RS.1,25,539/- BY NOT ALLOWING THE PROPER CREDIT FOR THE AVAILABLE CASH FLOW FOR THE INVESTMENTS IN FDRS AND BY CONFIRMING THE ADD ITIONS TO THE ESTIMATED BUSINESS INCOME. 2. THE UNDISCLOSED INCOME SHOULD BE DETERMINED AT RS. N IL. 3. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND/DEL ETE ANY OF THE GROUNDS OF APPEAL. 5 ITA NOS.750 TO 754/PN/2014 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A HAWKER SELLING POOJA ITEMS AND DOES NOT MAINTAIN BOOKS OF ACCOUNT. HE HAS ALREADY DIED. HE SUBMITTED THAT THE INCOME DETE RMINED BY THE AO AND UPHELD BY THE CIT(A) IS EXTREMELY HIGH CONSIDERING THE NATURE OF BUSINESS. REFERRING TO PAGES 55 AND 56 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENC H TO THE DEPOSITS MADE BY THE ASSESSEE WITH VIJAYA BANK ON 06- 07-1991 (2 DEPOSITS OF RS.1 LAKH EACH AMOUNTING TO RS.2 LAKHS) WHICH GOT MATURED ON 28-07-1995 (MATURITY VALUE OF RS.1,66,820/- PER FIXED DEPOSIT TOTALING TO RS.3,33,640/-). 9. REFERRING TO PAGE 66 OF THE PAPER BOOK THE LD. COUNS EL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING CHART : SR. NO. A.Y. INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS. ADDITION TO THE INCOME ON ESTIMATE BASIS MADE BY THE AO (RS.) ADDITION ON ACCOUNT OF FDR MADE BY THE AO (RS.) 1 1997 - 98 51,700/ - 51,700/ - NIL 30,496/ - 2 1998 - 99 50,858/ - 91,358/ - 40,500/ - NIL 3 1999 - 2000 58,121/ - 94,621/ - 36,500/ - 3,240/ - 4 2000 - 01 56,262/ - 56,262/ - 2,000/ - 20,432/ - 5 2001 - 02 58,821/ - 71,321/ - 12,500/ - NIL 6 2002 - 03 62,154/ - 66,099/ - 3,945/ - NIL -- -- -- -- 3,37,916/ - 1,65,561/ - 95,445/ - 54,168/ - HE SUBMITTED THAT THE BUSINESS INCOME DETERMINED BY THE ASSESSEE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE SHOULD H AVE BEEN ACCEPTED AND THE AO SHOULD NOT HAVE ENHANCED SUCH INC OME IN A.YRS. 1998-99 TO 2002-03. 10. REFERRING TO THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. A.N. DYANESWARAN REPORTED IN 297 ITR 135 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT ITEMS REGARDING WHICH ASSESSEE HAD REASONABLE EXPLANATION CANNOT 6 ITA NOS.750 TO 754/PN/2014 BE ASSESSABLE AS UNDISCLOSED INCOME. HE SUBMITTED THAT S INCE THE ASSESSEE IN THE INSTANT CASE IS ONLY A HAWKER AND HAS DISCLOSED BUSINESS INCOME ON ACCOUNT OF SELLING OF POOJA ITEMS THE SA ME SHOULD NOT HAVE BEEN ENHANCED BY THE AO. 11. SO FAR AS ADDITION MADE BY THE AO TO THE UNDISCLOSED INCOME ON ACCOUNT OF FIXED DEPOSITS MADE BY THE ASSESSEE IS CONC ERNED, HE SUBMITTED THAT IF THE ORIGINAL INVESTMENTS IN FIXED DEPOSIT WITH VIJAYA BANK ARE CONSIDERED, THEN NO ADDITION IS CALLED FOR. REFERRING TO PAGE 58 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE DETAILS OF FIXED DEPOSITS ON THE DATE OF SEARCH, I.E. ON 17-09-2002, WHICH ARE AS UNDER : MODI GROUP CASE DETAILS OF FDRS AS ON 17 - 09 - 2002, I.E. AS ON THE DATE OF SEARCH ON CHINTAMANI PAT PEDHI PN MODI MP MODI RP MODI AP MODI SP MODI TOTAL CHINTAMANI PATSANSTHA 150000 50000 150000 100000 100000 550000 CHHATRPATI AGRASEN 40000 140000 40000 20000 40000 280000 LOKMANYA PATPEDHI 20000 20000 20000 20000 20000 100000 MATA MADHAVI PATSANSTHA 15000 15000 TOTAL 210000 210000 210000 140000 175000 945000 12. REFERRING TO PAGE 59 OF THE PAPER BOOK THE LD. COUN SEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE DETAILS OF BUSINESS INCOME SHOWN IN THE BLOCK RETURN FILED BY THE RESPECTIVE FA MILY MEMBERS WHICH ARE AS UNDER : A.Y. PRAKASH N. MODI ARCHANA P. MODI MAHENDRA P. MODI SAVITA P. MODI RATIMOHAN P. MODI 1996 - 97 31800 38000 39000 37500 NIL 1997 - 98 15000 38500 34500 38000 NIL 1998 - 99 15000 25900 34500 26000 NIL 1999 - 00 22000 28000 38000 27300 NIL 2000 - 01 30000 29100 40000 28000 31000 2001 - 02 22000 31500 26800 29000 28000 2002 - 03 32055 33000 22916 31400 27916 2003 - 04 49500 49500 48000 45000 48000 TOTAL 217355 273500 283716 262200 134916 1171687 7 ITA NOS.750 TO 754/PN/2014 HE SUBMITTED THAT THE BUSINESS INCOME DISCLOSED BY THE V ARIOUS FAMILY MEMBERS AND FIXED DEPOSITS MADE PRIOR TO THE BLOCK PER IOD FULLY EXPLAINS THE VARIOUS DEPOSITS MADE BY THE FAMILY MEMBERS DURING THE BLOCK PERIOD. HE ACCORDINGLY SUBMITTED THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS UNCALLED FOR UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. 13. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE LD.CIT(A) AFTER CONSIDERING THE VARIOUS DETAILS FILED BY THE ASSESSEE FROM TIME TO TIME HAS ALREADY GRANTED REASONABLE RELIEF. THEREFORE, FURTHER RELIEF IS NOT WARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDER OF THE AO AND THE CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIO US DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT TH E ASSESSEE IN THE INSTANT CASE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AN D HAS FILED THE RETURN OF INCOME FOR THE BLOCK PERIOD, THE DETAILS OF WHICH A RE ALREADY GIVEN AT PARA 9 OF THIS ORDER. WE FIND THE AO ACCEPTED T HE RETURNED BUSINESS INCOME FOR A.Y. 1997-98 AT RS.51,700/- BUT FOR TH E SUBSEQUENT YEARS HE MADE CERTAIN ADDITIONS, THE DETAILS OF WHICH ARE ALREADY GIVEN AT PARA 9 OF THIS ORDER. IN OUR OPINION, U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION ON ACCOUNT O F BUSINESS INCOME FOR DIFFERENT ASSESSMENT YEARS APPEARS TO BE IN TH E HIGHER SIDE. WE THEREFORE DIRECT THE AO TO SUBSTITUTE THE INCOME EXC LUDING FIXED DEPOSITS AND DEDUCTION U/S.80L AND EXEMPTION LIMIT AS UNDER : 8 ITA NOS.750 TO 754/PN/2014 INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) TO BE DETERMINED AS PER OUR DIRECTION 51,700/ - 51,700/ - N /A 50,858/ - 91,358/ - 55,0 00/ - 58,121/ - 94,621/ - 60,000/ - 56,262/ - 56,262/ - 60,000/ - 58,821/ - 71,321/ - 60,000/ - 62,154/ - 66,099/ - 65,000/ - 15. SO FAR AS ADDITION ON ACCOUNT OF FDR IS CONCERNED, W E FIND THE AO HAS MADE ADDITION ON THE GROUND THAT THE FIXED DE POSIT WITH VIJAYA BANK WAS MATURED ON 22-08-1995 AND WAS TRANSFERRED F ROM VIJAYA BANK OD ACCOUNT NO.8/95 BUT THE ASSESSEE COULD NOT PR ODUCE THE DETAILS OF THE FIXED DEPOSIT RECEIPT PERTAINING TO F.Y. 1995 -96. THE ASSESSEE HAS ALSO NOT EXPLAINED THE SOURCE OF DEPOSIT IN THE YEARLY DETAILS OF FIXED DEPOSIT RECEIPTS WITH SUPPORTING EVIDENCE AND MATERIAL SUCH AS COPY OF STATEMENT OF VIJAYA BANK OD ACCOUNT E TC. FURTHER, THE INTEREST ACCRUED ON THE SAID DEPOSIT IS NOT ASCERTAINABLE IN ABSENCE OF SUPPORTING EVIDENCE. WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE BEING A HAW KER CANNOT BE EXPECTED TO MAINTAIN DETAILS OF SUCH OLD DEPOSITS. ONCE T HE FIXED DEPOSIT GOT MATURED, THE ASSESSEE HAS SURRENDERED THE ORIGINAL DEPOSIT RECEIPT TO THE BANK AND HAS NOT KEPT XEROX COPY OF TH E SAME. WHEN THE ASSESSEE HAS GIVEN THE DETAILS AND CONSIDERING THE NATUR E OF BUSINESS AND STATUS OF THE ASSESSEE, THE AO COULD HAVE AND SHOU LD HAVE OBTAINED THE DETAILS FROM THE BANK TO FIND OUT THE VERACIT Y OF THE STATEMENT. HOWEVER, IN THE INSTANT CASE, THE AO HAS NOT MADE ANY SUCH EFFORT. THE FACT THAT CREDIT OF THE MATURITY VALUE OF RS.1,66,820/- EACH OF THE 2 FIXED DEPOSIT RECEIPTS DURING F.Y. 1995-96 ARE NOT IN DOUBT. THE AO DISBELIEVED THE SAME ON THE GROUND THAT THE SOURCE OF DEPOSIT IN THE YEARLY DETAILS OF FIXED DEPOSIT RECEIPTS HA S NOT BEEN EXPLAINED WITH SUPPORTING EVIDENCE AND MATERIAL. IT IS ALSO A FACT THAT 9 ITA NOS.750 TO 754/PN/2014 IN ABSENCE OF FULL DETAILS KEPT BY THE ASSESSEE, THE CALCULA TION OF INTEREST U/S.80L IS ALSO NOT POSSIBLE. CONSIDERING THE TOTA LITY OF THE FACTS OF THE CASE, A LUMPSUM ADDITION OF RS.15,000/- FOR THE BLOCK PERIOD ON ACCOUNT OF FIXED DEPOSIT RECEIPT IN THE INSTANT CASE IN OUR OPINION WILL MEET THE ENDS OF JUSTICE. THEREFORE, OUT OF THE ADDITION ON ACCOUNT OF FIXED DEPOSIT MADE OF RS.54,168/- AS PER PARA 9 OF THIS ORDER, WE DIRECT THE SAME TO BE SUBSTITUTED AT RS.15,000 /-. THE BREAK- UP OF THE SAME IS FOR A.Y. 1997-98 RS.10,000/- AND FOR A.Y .2000-01 RS.5,000/-. THE AO SHALL ACCORDINGLY RECOMPUTE THE INCOM E FOR DIFFERENT YEARS OF THE BLOCK PERIOD. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO.750/PN/2014 (MAHENDRA PRAKASHCHAND MODI) : 17. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE CIT(A) ERRED IN DETERMINING THE UNDISCLOSED I NCOME AT RS.23,015/- BY NOT ALLOWING THE PROPER CREDIT FOR TH E AVAILABLE CASH FLOW FOR THE INVESTMENT IN FDRS AND BY CONFIRMING THE ADDITION S TO THE ESTIMATED BUSINESS INCOME. 2. THE UNDISCLOSED INCOME SHOULD BE DETERMINED AT RS. N IL. 3. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND/DEL ETE ANY OF THE GROUNDS OF APPEAL. 18. AFTER HEARING BOTH THE SIDES, WE FIND THE DETAILS OF ADD ITION AFTER APPEAL EFFECT IS AS UNDER : SR. NO. A.Y. INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS. ADDITION TO THE INCOME ON ESTIMATE BASIS MADE BY THE AO (RS.) ADDITION ON ACCOUNT OF FDR MADE BY THE AO (RS.) 1 1997 - 98 48,956 / - 48,956 / - NIL 2 1998 - 99 48,338 / - 48,338 / - NIL 3 1999 - 2000 55,064 / - 55,064 / - NIL 4 2000 - 01 5 8,497 / - 5 8,497 / - NIL 20,432/ - 5 2001 - 02 5 7,038 / - 7 2,238 / - 1 5,200/ - 10 ITA NOS.750 TO 754/PN/2014 6 2002 - 03 62, 764 / - 64,848 / - 2,084 / - -- -- -- 3,3 0,657 / - 3,47,941 / - 17,284 / - 20,432 / - 19. IN THE LIGHT OF OUR DISCUSSION IN THE CASE OF LATE PRAK ASHCHAND NANDLAL MODI WE DIRECT THE AO TO COMPUTE THE BUSINESS INC OME FOR A.Y. 2001-02 AT RS.60,000/- AND FOR A.Y. 2002-03 AT RS.65,000/ -. SO FAR AS ADDITION ON ACCOUNT OF FDR IS CONCERNED, THE SAME IS DIREC TED TO BE DELETED. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY A LLOWED. ITA NO.751/PN/2014 (SAVITA PRAKASHCHAND MODI) : 20. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE CIT(A) ERRED IN DETERMINING THE UNDISCLOSED I NCOME AT RS.56,607/- BY NOT ALLOWING THE PROPER CREDIT FOR TH E AVAILABLE CASH FLOW FOR THE INVESTMENT IN FDRS AND BY CONFIRMING THE ADDITION S TO THE ESTIMATED BUSINESS INCOME. 2. THE UNDISCLOSED INCOME SHOULD BE DETERMINED AT RS. N IL. 3. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND/DEL ETE ANY OF THE GROUNDS OF APPEAL. 21. AFTER HEARING BOTH THE SIDES WE FIND, THE DETAILS OF ADD ITION AFTER APPEAL EFFECT IS AS UNDER : SR. NO. A.Y. INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS. ADDITION TO THE INCOME ON ESTIMATE BASIS MADE BY THE AO (RS.) ADDITION ON ACCOUNT OF FDR MADE BY THE AO (RS.) 1 1997 - 98 38,000/ - 38,000/ - NIL NIL 2 1998 - 99 26,000 / - 26,000 / - NIL NIL 3 1999 - 2000 27,300 / - 27,300 / - NIL NIL 4 2000 - 01 28,000 / - 28,000 / - NIL 50,000 / - 5 2001 - 02 35,661 / - 35,661 / - NIL NIL 6 2002 - 03 51,475 / - 51,475 / - NIL 85,000/ - -- -- -- -- 2,06,436 / - 2,06,436 / - NIL 1,35,000/ - 22. WE FIND THE ONLY ADDITION MADE BY THE AO IS ADDITION O F AMOUNT OF RS.1,35,000/- ON ACCOUNT OF FIXED DEPOSIT. FROM THE CO PY OF THE ASSESSMENT ORDER, WE FIND THE ADDITION RELATES TO A.Y. 200- 01 AND 11 ITA NOS.750 TO 754/PN/2014 2002-03 AMOUNTING TO RS.50,000/- AND RS.85,000/- RESPECT IVELY. THE DEPOSIT IN FIXED DEPOSITS OF RS.50,000/- WAS EXPLAINED TO B E OUT OF GIFT OF RS.20,000/- FROM MP MODI, RS.20,000/- FROM RP MODI AND RS.10,000/- FROM PM MODI. SIMILARLY THE DEPOSIT OF RS.85,000/ - WAS EXPLAINED TO BE OUT OF GIFTS RECEIVED FROM THE HUSBAND. T HE SAME WAS DISBELIEVED BY THE REVENUE AUTHORITIES ON THE GROUND THA T THE GIFT TRANSACTIONS ARE NEITHER REGISTERED NOR NOTARIZED AND T HAT THERE IS NO INDEPENDENT AUTHORITY AND/OR THIRD PARTY WITNESSING THE TRANSACTIONS AND THEREFORE SUCH TRANSACTION HAS NO LEGAL SUPPORT. 23. SINCE THE ASSESSEE IN THE INSTANT CASE IS A LADY AN D BELONGS TO THE FAMILY OF A HAWKER AND WAS NOT FILING REGULAR RETURNS N OR MAINTAINING BOOKS OF ACCOUNT, IT IS NOT EXPECTED OF THE ASS ESSEE TO MAKE GIFT DEEDS FOR SUCH PETTY GIFTS WHICH HAVE BEEN REC EIVED FROM THE FAMILY MEMBERS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, NATURE OF BUSINESS AND STATUS OF THE ASSESSEE, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.50,000/- IN A.Y. 200-01. SIMILARLY, THE AMOUNT OF RS.85,000/- HAS BEEN EXPLAINED TO BE OUT OF GIFT S FROM THE HUSBAND OF THE ASSESSEE WHICH HAS BEEN DISBELIEVED BY TH E REVENUE AUTHORITIES. IT IS ALSO A FACT THAT ASSESSEE HAS FILED THE RETURN SHOWING BUSINESS INCOME OF RS.28,000/- FOR A.Y. 200-01 AND RS.51,47 5/- FOR RS.2002-03. SINCE WE HAVE ACCEPTED THE GIFT OF RS.50,000/- IN A.Y. 200-01, THEREFORE, AFTER CONSIDERING THE BUSINESS INCOME O F RS.28,000/- FOR A.Y. 2000-01 AND BUSINESS INCOME OF RS.51,475/- IN A.Y. 2 002-03 WHICH COMES TO RS.79,475/-. EVEN IF THE GIFT OF RS.1,25,000/- FROM THE HUSBAND IS DISBELIEVED, EVEN THEN WITH NOMINAL PAST SAVINGS THE BUSINESS INCOME FOR A.Y. 2001-02 AND 2002-03 ALMOST EXPLAIN S THE DEPOSIT OF RS.85,000/-. UNDER THESE CIRCUMSTANCES, WE ARE OF THE 12 ITA NOS.750 TO 754/PN/2014 CONSIDERED OPINION THAT NO ADDITION IS CALLED FOR IN THE INSTA NT CASE. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. ITA NO.752/PN/2014 (RATIMOHAN PRAKASHCHAND MODI) : 24. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE CIT(A) ERRED IN DETERMINING THE UNDISCLOSED I NCOME AT RS.74,381/- BY NOT ALLOWING THE PROPER CREDIT FOR TH E AVAILABLE CASH FLOW FOR THE INVESTMENT IN FDRS AND BY CONFIRMING THE ADDITION S TO THE ESTIMATED BUSINESS INCOME. 2. THE UNDISCLOSED INCOME SHOULD BE DETERMINED AT RS. N IL. 3. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND/DEL ETE ANY OF THE GROUNDS OF APPEAL. 25. AFTER HEARING BOTH THE SIDES, WE FIND THE DETAILS OF ADDIT ION MADE BY THE AO IS AS UNDER : SR. NO. A.Y. INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS. ADDITION TO THE INCOME ON ESTIMATE BASIS MADE BY THE AO (RS.) ADDITION ON ACCOUNT OF FDR MADE BY THE AO (RS.) 1 1997 - 98 10,074 / - CLUBBED IN FATHER 2 1998 - 99 10,871 / - CLUBBED IN FATHER 3 1999 - 2000 11,905/ - 11,905/ - 11,905/ - 4 2000 - 01 44,131/ - 44,131/ - NIL 1,00,000/ - 5 2001 - 02 5 3,071 / - 5 3,071 / - 5 3,071 / - 6 2002 - 03 56,454 / - 56,454/ 56,454 / - -- -- -- 1,86,506 / - 1,65,561 / - NIL 1,00,000/ - 26. THE MAJOR ADDITION IS ONLY INVESTMENT OF RS.1 LAKH IN TH E FIXED DEPOSIT DURING A.Y. 2000-01 WHICH HAS BEEN EXPLAINED BY TH E ASSESSEE AS GIFT FROM HIS FATHER MP MODI. FROM THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE, WE NOTICE THAT THE GIFT OF RS.1 LAKH FROM THE FATHER HAS BEEN DISBELIEVED BY THE AO ON THE GROUND THA T THE SAID TRANSACTION IS NEITHER REGISTERED NOR NOTARIZED. THERE IS NO INDEPENDENT AUTHORITY AND/OR THIRD PARTY WITNESSING THE TRANSACTION 13 ITA NOS.750 TO 754/PN/2014 AND AS SUCH TRANSACTION HAS NOT BEEN RECORDED FOR WHIC H THE CLAIM OF TRANSACTION HAS NO LEGAL SUPPORT. 27. SINCE WE HAVE ALREADY MENTIONED IN THE PRECEDING PARA GRAPHS THAT ASSESSEE BELONGS TO A FAMILY OF HAWKERS SELLING POOJA ITEMS, IT IS NOT EXPECTED OF HIM TO MAINTAIN SUCH DETAILS WHICH ARE USU ALLY MAINTAINED BY ASSESSEES IN REGULAR BUSINESS AND TAKING HE LP OF LAWYERS AND CHARTERED ACCOUNTANTS. THE COMBINED BUSINESS INCO ME OF THE MODI GROUP OF CASES SHOW BUSINESS INCOME OF RS.11,71,687/- FOR THE BLOCK PERIOD WHEREAS THE TOTAL DEPOSITS DURING THE BLOCK PERIOD IS RS.9,45,000/- ONLY. IF THE PREVIOUS DEPOSITS ARE CONSIDERE D WHICH WERE MADE PRIOR TO THE BLOCK PERIOD, THEN THE ENTIRE DEPOSIT O F THE GROUP STANDS EXPLAINED FROM THE BUSINESS INCOME DECLARED BY VAR IOUS FAMILY MEMBERS. SINCE VARIOUS FAMILY MEMBERS ARE STAYING TOGETH ER, IT IS POSSIBLE THAT THE PARENTS KEEP THE DEPOSITS IN THE NAME OF THEIR CHILDREN. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE , WE ARE OF THE CONSIDERED OPINION THAT THE DEPOSIT OF RS.1 LAKH BY THE A SSESSEE STANDS EXPLAINED IN THE LIGHT OF THE CASH FLOW STATEMENTS AND THE DETAILS GIVEN. WE THEREFORE DIRECT THE AO TO DELETE THE ADDITION. THE G ROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. ITA NO.753/PN/2014 (ARCHANA PRAKASHCHAND MODI) : 28. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE CIT(A) ERRED IN DETERMINING THE UNDISCLOSED I NCOME AT RS.21,197/- BY NOT ALLOWING THE PROPER CREDIT FOR TH E AVAILABLE CASH FLOW FOR THE INVESTMENT IN FDRS AND BY CONFIRMING THE ADDITION S TO THE ESTIMATED BUSINESS INCOME. 2. THE UNDISCLOSED INCOME SHOULD BE DETERMINED AT RS. N IL. 3. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND/DEL ETE ANY OF THE GROUNDS OF APPEAL. 14 ITA NOS.750 TO 754/PN/2014 29. AFTER HEARING BOTH THE SIDES, WE FIND THE ONLY ADDITION MADE BY THE AO IS ON ACCOUNT OF FDR MADE BY THE ASSESSEE AMOU NTING RS.66,985/-, THE DETAILS OF WHICH ARE AS UNDER : SR. NO. A.Y. INCOME RETURNED BY THE ASSESSEE BEFORE CLAIMING DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS.) INCOME ASSESSED BY THE AO EXCLUDING FDR AND DEDUCTION U/S.80L AND EXEMPTION LIMIT (RS. ADDITION TO THE INCOME ON ESTIMATE BASIS MADE BY THE AO (RS.) ADDITION ON ACCOUNT OF FDR MADE BY THE AO (RS.) 1 1997 - 98 38,500/ - 38,500/ - 2 1998 - 99 25,900/ - 25,900/ - 3 1999 - 2000 29,251/ - 29,251/ - NIL 15,000/ - 4 2000 - 01 31,614/ - 31,614/ - NIL 51,985/ - 5 2001 - 02 40,411/ - 40,411/ - 6 2002 - 03 49,269/ - 49,269/ - -- -- -- 2,14,945/ - 2,14,945/ - NIL 66,985/ - 30. FROM THE VARIOUS DETAILS FURNISHED IN THE PAPER BOOK, W E FIND THAT AS AGAINST THE TOTAL DEPOSIT OF RS.1,40,000/- DURING T HE BLOCK PERIOD. THE BUSINESS INCOME DECLARED BY THE ASSESSEE FOR THE BLOCK PERIOD IS RS.2,73,500/-. IN THE LIGHT OF OUR OBSERVATIONS IN THE PRECEDING PARAGRAPHS IN THE CASE OF DIFFERENT FAMILY MEMBER S, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION IN THE INSTANT C ASE IS UNCALLED FOR. WE ACCORDINGLY DIRECT THE AO TO DELETE THE ADDITION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 31. IN THE RESULT, ITA NOS. 754/PN/2014 AND 750/PN/201 4 ARE PARTLY ALLOWED. ITA NOS. 751/PN/2014 TO 753/PN/2014 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-06-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 08 TH JUNE, 2016. 15 ITA NOS.750 TO 754/PN/2014 & '#)! *! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - I, NASHIK 4. 5. 6. THE CIT-I, NASHIK $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE