Chandulal A.Shah(HUF), Surat V. The ITO, Ward-3(3)(1), Surat

ITA 83/SRT/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2061 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 04-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: P M JAGASHETH
• Keywords: Reopening of assessment; Unexplained investment; Unexplained expenditure; Depreciation
• Section: 69C; 195; 69A; 48; 13; 147; 68; 69; 144

Judgement Text

CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . .. . . .. . ./ ././ ./ I.T.A NOS.83 & 84/SRT/2017 / ASSESSMENT YEARS: 2000-01 & 2004-05 1. CH ANDULAL AMRUTLAL SHAH (HUF), BUNGLOW NO.74, SAIFEE SOCIETY, L.H. ROAD, SURAT-395 006. [PAN: AAAHC 8116 R] V . INCOME TAX OFFICER, WARD-3(3)(1), SURAT. 2.CHANDULAL AMRUTLAL SHAH, BUNGLOW NO.74, SAIFEE SOCIETY, L.H. ROAD, SURAT-395 006. [PAN: ADAPS 5844 F] V. INCOME TAX OFFICER, WARD-3(3)(1), SURAT. / APPELLANT /RESPONDENT /ASSESSEE BY SHRI P. M. JAGASHETH, CA /REVENUE BY MS. ANUPAMA SINGLA, SR. DR / DATE OF HEARING: 13 - 02 - 2020 /PRONOUNCEMENT ON: 04 - 05 - 2020 /O R D E R PER O.P.MEENA, AM: 1. THESE TWO APPEALS FILED BY THE ASSESSEE IN HUF AND INDIVIDUAL CAPACITY ARE DIRECTED AGAINST THE COMMON ORDER OF C OMMISSIONER OF INCOME-TAX (APPEALS)-3, SURAT [IN SHORT THE CIT(A) ] DATED 09-06-2017 & 13-07-2017, FOR THE ASSESSMENT YEARS 2000-01 & AS SESSMENT YEAR 2004- 05 RESPECTIVELY. I.T.A.NO. 83/SRT/2017/A.Y. 2000-01/ BY CHANDULAL A SHAH- HUF: CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 2 OF 15 2. ADDITIONAL GROUND: DURING THE CURRENCY OF APPEAL, THE ASSESSEE HAS RAISED ADDITIONAL GROUNDS REGARDING REOPENING OF AS SESSMENT AND ISSUING NOTICE U/S.148 OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ADDITIONAL GRO UND RAISED BY THE ASSESSEE IS PURELY LEGAL AND DOES NOT INVOLVE ANY I NVESTIGATION OF FACTS, HENCE, SAME IS BEING PURELY LEGAL GROUND IS ALLOWED TO BE ADMITTED BY FOLLOWING THAT RATIO LAID DOWN BY THE HONBLE SUPRE ME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION V. CIT (1998) 229 ITR 383 (SC) WHEREIN IT WAS HELD THAT THE ADDITIONAL GROUND OF A PPEAL CAN BE ADMITTED, WHEREAS THE ISSUE INVOLVED IN LAW AND NOT INVOLVING ANY INVESTIGATION OF FACTS. 4. ADDITIONAL GROUND ARE RAISED BY THE ASSESSEE READ A S UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN RE-OPENING THE ASSESSMENT AND ISSUING NOTICE U/S.148 OF THE I.T. ACT, 1961. 5. THE LD. COUNSEL REFERRED THE REASONS FOR REOPENING OF ASSESSMENT PLACED AT PAPER BOOK PAGE NO.15, WHEREIN IT WAS OBS ERVED THAT THE OPENING CAPITAL AS ON 01-04-1999 WAS SHOWN AT RS.16 ,97,250/- AT PAGE NO.4, WHEREAS THE FILE INDICATED THAT THE RETURN OF INCOME WAS FILED FOR THE A.Y.2000-01 FIRST THE TIME. ACCORDINGLY, THE AS SESSEE HAS CLAIMED HIS OPENING CAPITAL BY RS.16,97,252/-. FURTHER, THE INT EREST INCOME OF CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 3 OF 15 RS.51,630/- WAS SHOWN. THUS, THERE IS ESCAPEMENT OF INCOME OF AT LEAST TO THE TUNE OF RS.17,48,882/-. THE LOOSE PAPER SHOW S SUCH FACTS WHICH ARE REASONS TO BELIEVE THAT THE INCOME OF RS.17,48, 882/- CHARGEABLE TO TAX HAS BEEN ESCAPED ASSESSMENT FOR THE AY.2000-01, THEREFORE, IT IS REQUIRED TO BE RE-ASSESSED BY INITIATING PROVISION OF SECTION 147 OF THE ACT. THE LD. COUNSEL FURTHER SUBMITTED THAT THIS IS THE SECOND ROUND OF PROCEEDINGS BEFORE THE ITAT. THE ITAT, AHMEDABAD VI DE ITS ORDER IN ITA NO.2082/AHD/2008 DATED 17-02-2012 HAS SET-ASIDE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSEE WITH THE SPECIFIC DIRECTIO N WHETHER THE ASSESSEE HAS UTILIZED AND TAKEN AT THE INSTANCE OF SUCH PROP ER ENTRIES ON LATER YEARS WHICH IS VERY MATERIAL TO DECIDE THE TAXABILI TY OR OTHERWISE OF THE ADDITION IN QUESTION. THE LD. COUNSEL REFERRED THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSMENT WAS REOPENED ON THE G ROUND THAT INCOME HAS ESCAPED ON ACCOUNT OF OPENING CAPITAL AS ON 01- 04-1999 OF RS.16,97,252/-. HOWEVER, NO ADDITION HAS BEEN MADE ON ACCOUNT OF OPENING CAPITAL IN THE ASSESSMENT ORDER, THEREFORE, THE REOPENING OF ASSESSMENT IS BAD IN LAW AND NOT SUSTAINABLE IN LAW IN THE LIGHT OF DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. MOHMED JUNED DADANI (2013) 30 TAXMANN.COM 1 (GUJARAT), WHEREIN IT WAS H ELD THAT WHEN ON GROUND ON WHICH REOPENING OF ASSESSMENT WAS BASED, NO ADDITION WAS MADE BY ASSESSING OFFICER, HE COULD NOT MAKE ADDITI ONS ON SOME OTHER GROUNDS WHICH DID NOT FORM PART OF REASONS RECORDED BY HIM. THE LD. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 4 OF 15 COUNSEL FURTHER RELIED ON THE CASE OF CIT V. JET AI RWAYS (I) LTD. (2010) 195 TAXMAN 117 (BOMBAY). 6. ON THE OTHER HAND, THE LD. SR. D.R. DREW OUR ATTENT ION TO PARA 14 OF THE ASSESSMENT ORDER WHEREIN THE AO MENTIONED THAT ON EXAMINATION ON CAPITAL ACCOUNT. THE ASSESSEE HAS SHOWN OPENING CAP ITAL BALANCE AT RS.16,97,252/-, THE ASSESSEE ASKED TO FURNISH THE D ETAILS OF SHOW-CAUSE NOTICE DATED 24-02-2014. THE REPLY WAS FURNISHED BY THE ASSESSEE REPRODUCED AT PARA 14 OF THE ASSESSMENT ORDER. FURT HER, REFERRED AT PARA 13 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS MENTI ONED THAT THE VARIOUS INVESTMENTS MADE A DISCUSSION IN THE ABOVE MENTIONED PARAGRAPHS SEPARATELY FOR AN AMOUNT OF RS.12,70,054 /- IS NOT JUSTIFIABLE AFTER CREATION TO PROPORTIONATE CAPITAL ONLY THESE INVESTMENTS WERE BROUGHT INTO BOOKS OF ACCOUNT. LIKEWISE, THE ASSESS EE SHOWN VARIOUS LOANS AND ADVANCES SHOWN IN BALANCE SHEET AND PROPO RTIONATELY INCREASED THE CAPITAL BALANCE. THEREFORE, IT IS PRO VED THAT, THE ASSESSEE UTILIZED THE BOGUS CAPITAL CREATED AT RS.16,97,252/ - TO THE EXTENT OF INVESTMENTS DISCUSSED IN ABOVE PARAGRAPHS IN THE PR ESENT YEAR AND THE REMAINING CAPITAL WAS ACCOMMODATED BY VARIOUS CASH LOANS AND ADVANCES, TO BROUGHT THE UNDISCLOSED INVESTMENTS AL READY HELD BY THE ASSESSEE IN FUTURE COURSE OF TIME. THUS, THE AO HAS MADE THE ADDITION AND CONSIDER THE OPENING CAPITAL CREATED BY THE ASS ESSEE AND ALLOWED THE SAME SET-OFF AFTER ADDITION MADE AGAINST THE IN VESTMENT. THEREFORE, CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 5 OF 15 THE OPENING CAPITAL HAS BEEN DULY CONSIDERED FOR AD DITION AND NO SEPARATE ADDITION MADE AGAINST THE SAID OPENING CAP ITAL. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE REOP ENING OF ASSESSMENT WAS BASED ON UTILIZATION OF CREATION OF BOGUS CAPIT AL AT RS.16,97,252/-. THE AO HAS DULY DISCUSSED THIS FACT IN THE ASSESSME NT ORDER AND OBSERVED THAT THE ADDITION MADE BY HIM IN RESPECT OF VARIOUS INSTALMENTS AMOUNTING TO RS.12,70,054/- AND OTHER AMOUNT OF RS. 54,433/- ARE COVERED BY THE BOGUS CAPITAL CREATED AT RS.16,97,25 2/- TO THE EXTENT OF INVESTMENTS DISCUSSED IN THE ASSESSMENT ORDER AND T HE REMAINING CAPITAL WAS ACCOMMODATED IN VARIOUS CASH AND VARIOUS LOAN A DVANCES. THUS, WE FIND THAT THE AO HAS DULY CONSIDERED THE ADDITION T O BE MADE BECAUSE OF OPENING CAPITAL, BUT DID NOT MAKE SEPARATE ADDITION OF SAID AMOUNT, AS HE ALLOWED SET-OFF OF THE SAME AGAINST THE INVESTME NT HOLDING THAT SAME IS MADE OUT OF BOGUS CAPITAL CREATED BY THE ASSESSE E. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT NO ADDITION IS MADE ON ACCOUNT OF OPENING CAPITAL IS DEVOID OF ANY MERITS AND NOT COR RECT ON FACTS AND IN LAW. HENCE, SAME IS REJECTED. ACCORDINGLY, WE HOLD THAT THE REOPENING OF THE ASSESSMENT DONE BY THE AO IS PERFECTLY IN OR DER AND AS PER LAW. SINCE THE FACTS OF THE PRESENT CASE ARE ENTIRELY DI FFERENT FROM THE CASE LAWS CITED ABOVE BY THE ASSESSEE, HENCE, THESE ARE NOT APPLICABLE IN THE PRESENT FACT OF THE CASE. IN VIEW OF THIS, THE ADDI TIONAL GROUND RAISED BY THE ASSESSEE IS THEREFORE TREATED AS DISMISSED. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 6 OF 15 8. GROUND NO.1 RELATES TO CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.1,32,341/- ON ACCOUNT OF A LLEGED UNEXPLAINED CASH U/S.69A OF THE ACT. 9. THE AO FOUND THAT THE ASSESSEE HAS SHOWN CASH ON H AND AT RS.64,806/- FOR WHICH A SHOW-CAUSE NOTICE WAS ISSUE D ON 24-02-2014, HOWEVER, NO DETAILS WERE FILED. FURTHER, THE AO NOT ED THAT THE PERUSAL OF BALANCE SHEET WITH THE RETURN OF INCOME SHOWS TH AT THE ASSESSEE HAS MADE INVESTMENT OF RS.19,000/- IN DIAMOND JUBILEE C O-OP. BANK LTD OF RS.12,813/- WITH DIAMOND JUBILEE CO-OP. BANK LTD. O F RS.10,000/- AND RS.10,000/- WITH THE STATE BANK OF INDIA. FURTHER, ANOTHER CASHBOOK OF THE ASSESSEE SHOWS CASH IN HAND ON RS.67, 535/- FOR WHICH NO EXPLANATION WAS PROVIDED. ACCORDINGLY, THE AO HAS MADE AN ADDIT ION OF RS.1,32,341/- . 10. IN APPEAL, NO DETAILS WERE PROVIDED, ACCORDINGLY TH IS ADDITION HAS CONFIRMED. 11. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEF ORE THIS TRIBUNAL. THE LD. COUNSEL SUBMITTED THAT THE AO HAS CONSIDERE D TWO BALANCE SHEETS OF THE ASSESSEE SHOWING CASH IN HAND OF RS.64,806/- AND ANOTHER SCAN COPY OF BALANCE SHEET OF RS.67,535/-. THE SECOND CA SH BOOK HAS BEEN DISOWNED BY THE ASSESSEE ONLY ONE ADDITION CAN BE M ADE WHICH MAY BE CORRECT. 12. PER CONTRA, THE LD. SR. DR RELIED ON THE ORDER OF LOWER AUTHORI TIES. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 7 OF 15 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE WE RE TWO BALANCE SHEETS PREPARED BY THE ASSESSEE, HOWEVER, ONE WAS APPEARED TO BE AUTHENTIC AND HAS BEEN PREPARED BY PANKAJ DANAWALA, AND CHART ERED ACCOUNTANT FOR BOGUS CAPITAL ENTRY AND ASSETS, WITHOUT ANY ACT UAL TRANSACTION HAS TAKEN PLACE. THEREFORE, THE ADDITION, IF ANY, CAN B E MADE ANY RESPECTIVE OF ONE BALANCE SHEET FOR THE SAME PERIOD, THEREFORE , THE ADDITION OF RS.64,806/- IS CONFIRMED AND THE OTHER ADDITION ON AMOUNT OF RS.67,535/- IS DELETED. THIS GROUND OF APPEAL IS PA RTLY ALLOWED. 14. GROUND NO.2 RELATES TO CONFIRMING THE ADDITION OF R S.1,20,944/- ON ACCOUNT OF ALLEGED UNEXPLAINED AND UNDISCLOSED INVE STMENT U/S.69B OF THE ACT. 15. THE AO NOTED THAT THE ASSESSEE HAS INVESTED IN BANK FD WITH DIAMOND JUBILEE CO-OP. BANK LTD ON 29-02-2000 AMOUN TING RS.10,000/- AND FD WITH STATE BANK OF INDIA ON 24-02-1998 AMOUN TING RS.10,000/- AND FD WITH DIAMOND JUBILEE CO-OP. BANK LTD. ON 05- 08-1997 AMOUNTING OF RS.10,000/- AND RS.10,000/- WITH DIAMOND JUBILEE CO-OP. BANK LTD. ACCORDINGLY, THE AO MADE ADDITION OF RS.1,20,944/- WHICH WAS ALSO CONFIRMED BY THE CIT(A). 16. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEF ORE THIS TRIBUNAL. THE LD. COUNSEL SUBMITTED THAT EXCEPT THE INVESTMEN T IN DIAMOND JUBILEE CO-OP. BANK LTD. OF RS.13,482/- WHICH WAS INVESTED ON 29-02-2000 AND THE OTHER FD COULD BE THE SAME FOR THE OTHER INVEST ED ON 24-02-1998 & CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 8 OF 15 08-05-1997 RESPECTIVELY. THEREFORE, THE AO ACCORDIN GLY MADE THE ADDITION OF RS.1,20,944/- ON THIS ACCOUNT. 17. PER CONTRA, THE LD. SR. DR RELIED ON THE ORDER OF THE AO AND CI T (A). 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FDR OF RS.13,482/- DATED 29-02-2000 AND THE OTHER FDR DOES NOT FALL DURING T HE YEAR UNDER CONSIDERATION. HENCE, THE ADDITION OF RS.13,482/- I S CONFIRMED AND THE BALANCE ADDITION THEREFORE, IS DELETED. THIS GROUN D OF APPEAL IS THEREFORE, PARTLY ALLOWED. 19. GROUND NO.3 RELATES TO CONFIRMING THE ADDITION OF R S.5,35,776/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN BUILDI NG U/S.69B OF THE ACT. 20. THE AO NOTICED THAT THE BALANCE SHEET OF THE ASSESS EE HAS SHOWN INVESTMENT OF RS.2,71,076/- IN A-74, SAIFEE SOCIETY , BUILDING A/C STORY CONSTRUCTION AT RS.2,64,700/-, FACTORY SHED AT RS.3 ,85,741/- AND FLAT PURCHASE AT RS.95,251/-. THE ASSESSEE HAS NOT INVES TED IN THE FACTORY SHED SHOWN IN THE BALANCE SHEET NOR HAS SUBMITTED B ALANCE SHEET FOR THE PERIOD UNDER CONSIDERATION BUT ALSO IN THE BALANCE SHEET FURNISHED TO THE DEPARTMENT IN THE LATER YEARS I.E. 2001-02, 2002-03 , 2003-04 & 2004-05 RESPECTIVELY. THEREFORE, THE AO TREATED THE SAME AS UNDISCLOSED INCOME U/S.69B INVESTMENT OF RS.5,35,766/-. 21. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT (A). HOWEVER, CIT (A) UPHELD THE ADDITION MADE BY THE AO. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 9 OF 15 22. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BE FORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT A-74, SAIFEE SOCIETY PROPERTY WAS PURCHASED IN THE YEAR 1989 AND THE DOC UMENT WAS MADE IN THE YEAR 1990. THE BUILDING AND SHED WERE SHOWN AS PER DISOWNED BALANCE SHEET. HENCE, NO ADDITION ON THIS ACCOUNT C OULD BE MADE. 23. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDERS O F LOWER AUTHORITIES. 24. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. SINCE THE PROPERTY IN QUESTION WAS PURCHASED IN THE YEAR 1989 AND SAME WAS REGISTERED IN 1990. THEREFOR E, THE INVESTMENT SO MADE DOES NOT PERTAINS TO ASSESSMENT YEAR UNDER CONSIDERATION. THE INVESTMENT THEREON IS SHOWN OUT OF DISOWNED BALANCE SHEET. THEREFORE, SAID ADDITION IS ALSO NOT JUSTIFIED. IN VIEW OF THE SE FACTS AND CIRCUMSTANCES, THE ADDITION MADE BY THE AO IS THERE FORE, DELETED. THIS GROUND OF APPEAL IS ALLOWED. 25. GROUND NO. 4 RELATES TO UNEXPLAINED INVESTMENT OF R S. 4,80,992 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE AND UNAC COUNTED INVESTMENT MADE UNDER SECTION 69A OF THE ACT. 26. THE AO NOTED THAT THE BALANCE SHEET OF THE ASSESSE E HAD SHOWN INVESTMENT IN FACTORY SHED OF RS. 3,85,741 AND FLAT PURCHASE AMOUNT OF RS. 95,251 TOTALING TO RS. 4,80,992 NOT SHOWN IN TH E BALANCE SHEET FOR THE PERIOD UNDER CONSIDERATION, HENCE, SAME WAS TR EATED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69 OF THE ACT. 27. IN APPEAL, CIT (A) HAS CONFIRMED THE SAME. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 10 OF 15 28. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BE FORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS INVESTMENT IS SAME AS IN CHANDULAL A SHAH, INDIVIDUAL, THE FACTOR Y SHED WAS PURCHASED IN THE YEAR 1984 AND CONSTRUCTION OF RS. 95,241 WAS SHOWN FOR DISOWNED BALANCE SHEET. HENCE, ADDITION FOR THE PERIOD UNDER CONSIDERATION IS JUSTIFIED. 29. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDERS O F LOWER AUTHORITIES. 30. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ADDITION MADE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DOES NOT PERTAINS TO ASSES SMENT YEAR UNDER CONSIDERATION, HENCE, SAME IS THEREFORE, IS DELETE D. THIS GROUND OF APPEAL IS ALLOWED. 31. GROUND NO. 5 RELATES TO CONFIRMATION OF UNEXPLAINED INVESTMENT OF RS. 4,03,400 UNDER SECTION 69 OF THE ACT. 32. GROUND NO.6 RELATES TO CONFIRMATION OF UNEXPLAINED INVESTMENT OF RS. 5,70,000 UNDER SECTION 69 OF THE ACT. GROUND NO . 5 RELATES TO CONFIRMATION OF UNEXPLAINED INVESTMENT OF RS. 5,70, 000 UNDER SECTION 69 OF THE ACT. 33. GROUND NO.7 RELATES TO CONFIRMATION OF UNEXPLAINED INVESTMENT OF RS. 2,56,000 UNDER SECTION 69 OF THE ACT. 34. GROUND NO.8 RELATES TO CONFIRMATION OF UNEXPLAINED EXPENDITURE OF RS. 2,24,800 UNDER SECTION 69C OF THE ACT. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 11 OF 15 35. GROUND NO.9 RELATES TO CONFIRMATION OF UNEXPLAINED EXPENSES OF RS.2,35,000 UNDER SECTION 68 OF THE ACT. 36. THE AO MADE ADDITION IN RESPECT OF INVESTMENT AND E XPENDITURE AS MENTIONED IN GROUND NO. 5 TO 9 OF APPEAL AS NO DET AILS WERE FILED. THE CIT (A) HAS ACCUMULATED LOSSES CONFIRMED THE SAME. 37. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTITY ADDITION MADE IN RESPECT OF GROUND NO. 6 TO 9 ARE RELATED TO DISOWNED BALANCE SHEET , WHICH WAS PREPARED BY SHRI DANAWALA CHARTER ED ACCOUNTANT, FOR CERTAIN OF BOGUS BALANCE SHEET AND BOGUS ASSETS WIT HOUT ANY ACTUAL INVESTMENT MADE BY THE ASSESSEE. THE ASSESSEE HAS D ISOWNED THE SAID BALANCE SHEET. IN NUMBER OF CASE LAWS, IT WAS FOUND TO BE BOGUS AND ADDITION STAND DELETED. THEREFORE, CONSIDERING THES E FACTS, THESE ADDITION MADE BY THE AO ARE THEREFORE, DIRECTED TO BE DELETED. ACCORDINGLY, GROUND NO. 5 TO 9 OF APPEAL ARE ALLOWE D. 38. IN THE RESULT, THE APPEAL OF THE ASSESSEE HUF FOR A .Y. 2000-01 IS PARTLY ALLOWED. I.T.A.NO. 84/SRT/2017/A.Y. 2004-05/ CHANDULAL A SHA H- INDIVIDUAL: 39. GROUND NO.1 TO 9 ARE RELATES TO CONFIRMING VARIOUS ADDITION AMOUNTING TO RS. 21,88,791 INCLUDING ADDITION OF RS . OF RS. 1,10,000 MADE IN ORIGINAL ASSESSMENT ORDER AND OTHER ADDITIONS MA DE IN FRESH ASSESSMENT MADE IN CONSEQUENCE TO ITAT ORDER. CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 12 OF 15 40. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) ON 26.12.2006 DETERMINING TOTAL INCOME OF RS. 4,64,870 AFTER MAKI NG ADDITION OF RS. 1,10,000 ON ACCOUNT OF UNEXPLAINED EXPENDITURE FDR. PF RS. 47,968 ON ACCOUNT OF UNEXPLAINED CAPITAL CREATION AND RS. 28, 000 ON ACCOUNT OF INTEREST ON BANK. THE ASSESSEE HAS FILED AN APPEAL BEFORE CIT (A), WHO DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. AGGRIEVED WITH ORDER OF CIT (A), THE ASSESS EE HAS FILED AN APPEAL BEFORE TRIBUNAL, WHO VIDE ORDER DATED 17.02.2012 HA S SET-ASIDE WITH SPECIFIC DIRECTION. IN CONSEQUENCE, TO ORDER OF ITA T, THE AO HAS PASSED FRESH ASSESSMENT ORDER UNDER SECTION 144 READ WITH SECTION 254 OF THE ACT ON 20.03.2014. THE ASSESSEE HAS AGAIN FILED AN APPE AL BEFORE CIT (A) WHO HAD CONFIRMED THE ADDITION MADE BY THE AO. THE ASSE SSEE IS THEREFORE, NOW IN APPEAL BEFORE THIS TRIBUNAL. THE LEARNED COU NSEL FOR THE ASSESSEE REFERRED ASSESSMENT ORDER MADE IN CONSEQUENCE OF TR IBUNAL ORDER KG ADDITION OF RS. 21,88,786 AS AGAINST WHICH THE ADD ITION OF RS. 1,10,000 MADE AND RETURNED IN FRESH ASSESSMENT ORDER. THEREF ORE, IT WAS SUBMITTED THAT IN SET-ASIDE ORDER OF TRIBUNAL THE AO CANNOT E NHANCE THE INCOME ORIGINALLY ASSESSED BY HIM, IN THE LIGHT OF RATIO L AID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAHELI SYNTHETICS (P) LTD. V. CIT [2008] 302 ITR 126 (GUJARAT) , HON`BLE SUPREME COURT IN TH E CASE OF MCORP GLOBAL (P) LTD. V. CIT [2009] 309 ITR 434 (SC) FIDELITY SH ARES AND SECURITIES LTD. V. DCIT [TAX APPEAL NO. 187 OF 2001 DATED 13.06.201 6 OF HONBLE GUJARAT CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 13 OF 15 HIGH COURT] (PB-15 TO 23). IT WAS SUBMITTED THAT O NLY ADDITION SUSTAINED OUT OF ORIGINAL ASSESSMENT ORDER IS AT RS.1,10,000 HENCE, SAME CAN BE SUSTAINED AND BALANCE NEEDS TO BE DELETED. 41. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDERS O F LOWER AUTHORITIES. 42. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT IN ORIGINAL ASSESS MENT ORDER THE AO HAS MADE ADDITION OF RS. 3,94,320 AND ASSESSED TOTAL IN COME AT RS. 4,64,870. HOWEVER, IN FRESH ASSESSMENT THE AO MADE ADDITION O F RS. 21,88,786 AND ASSESSED THE TOTAL INCOME AT RS. 22,59,341. THE LEA RNED COUNSEL FOR THE ASSESSEE RELYING ON THE JUDGEMENT OF HONBLE GUJARA T HIGH COURT IN THE CASE OF SAHELI SYNTHETICS (P.) LTD. V. CIT [2008] 3 02 ITR 126 (GUJARAT) IN WHICH IT WAS HELD THAT WHERE AN ASSESSMENT IS SET-A SIDE SIMPLICITER, WITHOUT ANY ENHANCEMENT PROPOSAL, IT IS ALWAYS IN T HE CONTEXT OF THE APPEAL AGAINST AN ORDER OF ASSESSMENT AND CANNOT BE READ TO MEAN THAT THE APPELLATE AUTHORITY GRANTED POWER TO ASSESSING OFFICER IN RELATION TO ITEMS OF ASSESSMENT WHICH WERE NEVER FRAMING PART O F APPEAL BEFORE APPELLATE AUTHORITY. THE HON`BLE SUPREME COURT IN THE CASE OF MCORP GLOBAL (P) LTD. V. CIT [2009] 309 ITR 434 (SC)/[200 9] 178 TAXMAN 347 (SC) FOLLOWING DECISION IN THE CASE OF HUKUMCHAND MILLS LTD. V. CIT [1967] 63 ITR 232 (SC) HELD THAT IT IS WELL-SETTLED THAT THE TRIBUNAL IS NOT AUTHORIZE D TO TAKE BACK THE BENEFIT GRANTED TO THE ASSESSEE BY THE ASSESSING OFFICER. IT HAS NO POWER TO ENHANCE THE ASSESSMENT. IN THE I NSTANT CASE, THE ASSESSING OFFICER HAD GRANTED DEPRECIATION IN RESPE CT OF 42,000 BOTTLES CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 14 OF 15 OUT OF THE TOTAL NUMBER OF 5,46,000 BOTTLES. THAT B ENEFIT WAS SOUGHT TO BE TAKEN AWAY BY THE TRIBUNAL, WHICH WAS NOT PERMIS SIBLE IN LAW. THAT WAS THE INFIRMITY IN THE IMPUGNED JUDGMENTS OF THE HIGH COURT AND THE TRIBUNAL. [PARA 6]. SIMILARLY, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF FIDELITY SHARES AND SECURITIES LTD. V. DCIT[TAX APPEAL NO. 187 OF 2001 DATED 13.06.2016] FOLLOWING THE RATIO OF DECISION O F HON`BLE SUPREME COURT IN THE CASE OF MCORP GLOBAL (P) LTD. V. CIT [ 2009] 309 ITR 434 (SC), [2009] 178 TAXMAN 347 (SC) AND HUKUMCHAND MILLS LTD . V. CIT [1996] 62 ITR 232 (SC) HELD THAT THE TRIBUNAL HAS NO POWER UN DER INCOME TAX ACT, TO ENHANCE THE ASSESSMENT IN APPEAL IN VIEW OF THE STATUTORY PROVISIONS. 43. IN THE LIGHT OF RATIO LAID DOWN IN ABOVE JUDGEMENT S OF HON`BLE SUPREME COURT AND HON`BLE JURISDICTIONAL HIGH COUR T OF GUJARAT, WE ARE OF THE CONSIDERED OPINION THAT THE AO CANNOT ENHANC ED THE INCOME ORIGINALLY ASSESSED UNDER SECTION 143 (3) IS SET-AS IDE PROCEEDING IN CONSEQUENCE OF DIRECTION OF THE TRIBUNAL. SINCE IN ORIGINAL ASSESSMENT, THE ADDITION WERE MADE IN RESPECT OF UNEXPLAINED INVEST MENT IN FDRS AT RS. 1,10,000 AND ADDITION OF RS. 28,000 MADE ON ACCOU NT OF UNEXPLAINED INVESTMENT IN PLOT NO. 48 IN BLOCK NO. 15 VILLAGE V ARELI, WHICH IN FRESH ASSESSMENT HAS BEEN MADE AT RS.25,000. THEREFORE, T HE ORIGINAL ADDITION MADE BY THE AO IN SUBSEQUENT FRESH ASSESSMENT IS ON LY AT RS.1,35,000/ I.E. [ RS. 1,10,000 + 25,000=1,35,000] HAS BEEN RET URNED IN SET-ASIDE ASSESSMENT. HENCE, ONLY ADDITION CAN BE SUSTAINED U P TO RS. 1,35,000 AS PER ORIGINAL ASSESSMENT. THEREFORE, OTHER ADDITION S SO MADE ARE AMOUNTS CHANDULAL A SHAH (HUF) V. ITO, WARD-3(3)(1) ,SURAT/ITA. 83 & 84/SRT/2017/A.Y.2000-01 & 2004-05 PAGE 15 OF 15 TO ENHANCEMENT OF INCOME TO THAT EXTENT, WHICH IS N OT PERMISSIBLE IN LAW. HENCE, SAME IS THEREFORE, DELETED. WE ARE AWARE THA T ORIGINAL ASSESSMENT WAS MADE AT RS. 4,64,870 WHEREAS SET-ASIDE ASSESSME NT HAS BEEN MADE AT RS. 22,59,341 INCLUDING RETURNED INCOME OF RS. 7 0,550. THEREFORE, WE SET-ASIDE THIS ISSUE FOR LIMITED VERIFICATION BY TH E AO WHETHER THERE IS OTHER ADDITION WHICH HAS BEEN MADE IN ORIGINAL ASSE SSMENT AND SAME IS AGAIN RETAINED SET-ASIDE ASSESSMENT BY THE AO, IF S O HE HAS LIBERTY MODIFY THE FIGURES OF INCOME TO THAT EXTENT. IN VIEW OF AB OVE, GROUND NO. 1 TO 9 OF APPEALS ARE PARTLY ALLOWED. 44. IN THE RESULT, THE APPEAL OF THE ASSESSEE, IND FOR A.Y. 2004-05 IS PARTLY ALLOWED. 45. IN SUM UP , APPEAL OF THE ASSESSEE (HUF) FOR THE AS SESSMENT YEAR 2000-01 AND THE ASSESSEE (INDIVIDUAL) FOR ASSESSMEN T YEAR 2004-05 IS PARTLY ALLOWED. 46. THIS ORDER IS PRONOUNCED BY LISTING THE CASE ON THE NOTICE BOARD OF TRIBUNAL UNDER PROVISO TO RULE 34(4) OF INCOME TAX APPELLATE TRIBUNAL RULES 1963. SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER AC COUNTANT MEMBER SURAT: DATED: 4 TH ,2020 / SAMANTA, PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, SURAT