ACIT 25(3), MUMBAI V. NARESH H SHAH, MUMBAI

ITA 8691/MUM/2010

• Counselvise Citation: 869119914 RSA 2010
• Duration Of Justice: 4 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 13-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONIDR
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Rejection of books of accounts; Depreciation; Opportunity of being heard; Non-deduction of tax
• Section: 133A; 147; 131; 148; 144

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.8691/MUM/2010 ASSESSMENT YEAR: 2006-07 THE ACIT-25(3), R. NO.308, C-11, BANDRA KURLA COMPLEX, BANDRA(EAST), MUMBAI-400051 / VS. MR. NARESH H. SHAH, PROP. M/S MH BUILDERS, 52, SHREEJI KUTIR, RAM GALLI, S.V. ROAD, KANDIVALI (W), MUMBAI-400067 ( / REVENUE) ( /ASSESSEE) P .A. NO. ANEPS6449Q / REVENUE BY SHRI VIJAY KUMAR SONI-DR / ASSESSEE BY SHRI (DR). K.SHIVRAM / DATE OF HEARING : 10/08/2015 / DATE OF ORDER: 14/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 17/09/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. 2. THE FIRST GROUND RAISED BY THE REVENUE IS THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.35,50,000/-. THE CRUX OF ARGUMENT ADVANCED B Y SHRI VIJAY KUMAR SONI, LD. DR, IS THAT THE LD. FIRST APP ELLATE NARESH H. SHAH ITA NO.8691/MUM/2010 2 AUTHORITY DELETED THE ADDITION WITHOUT APPRECIATING THE FACT THAT THE IMPUGNED INCOME PERTAINS TO THE ASSESSEE, THEREFORE, SHOULD BE TAXED IN THE HANDS OF THE ASSE SSEE AS PER ORIGINAL AGREEMENT. ON THE OTHER HAND, DR. K. SHIVRAM, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RE LEVANT PORTION OF THE CONCLUSION DRAWN BY THE LD. FIRST AP PELLATE AUTHORITY FOR READY REFERENCE AND ANALYSIS:- 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRESE NTATIVE AND THE STAND TAKEN BY THE A.O. ADMITTEDLY, THE APPEL LANT WAS TO SURRENDER 2/3RD OF COMMERCIAL SHOPS TO BE CONSTRUCT ED' TO THE OTHER PARTNERS PROVIDED THEY CONTRIBUTED THE COST OF CONSTRUCTION AS PER THE AGREEMENT DT. 19.7.2002. THE A.O, HIMSELF HAS ACCEPTED THIS POSITION. SUBSEQUENTLY THE AB OVE AGREEMENT WAS MODIFIED AS PER WHICH THE OTHER PERSONS D ID NOT CONTRIBUTE THE COST OF CONSTRUCTION AND INSTEAD AGR EED TO ACCEPT 4 SHOPS EACH AS AGAINST 7 SHOPS. THESE FACTS HAVE BEEN C LEARLY BROUGHT OUT BEFORE THE A.O. BY LETTER DT. 29.12.2009 WHICH HAS BEEN REPRODUCED ABDVE. THE APPELLANT ONLY TRANSFERRE D THE SALE VALUE OF 8 SHOPS TO LAND COST ACCOUNT AS SEEN FROM T HE LEDGER ACCOUNT COPIES, FURTHER, IT IS SEEN THAT THE APPELLANT HAS FILED A LETTER DT. 30.12.2009 EXPLAINING THE COST OF LAND AN D AGREED FOR ADDITION OF RS. 5,79,800/-. THE ABOVE LETTER READS A S UNDER:- WITH REFERENCE TO THE ABOVE SUBJECT I WOULD LIKE TO SUBMIT AS UNDER:- NARESH H. SHAH ITA NO.8691/MUM/2010 3 1. CONSTRUCTION COST OPENING W.I.P. 2,88,22,392.00 ADD PURCHASE DURING YEAR 1,81,70,829.00 ------------------------ - 4,69,93,221.00 TOTAL AREA CONSTRUCTED (SQ.FEET) 58,600.00 COST OF CONSTRUCTION PER SQ.FEET RS. 802 .00 2. 8 SHOPS GIVEN TO CO. PARTNER AS PER AGREEMENT: SHOP NO. SQ. FEET. AMOUNT 05 300 4,20,000 06 225 3,15,000 07 300 4,20,000 08 300 4,20,000 09 225 3,60,000 10 300 4,50,000 16 225 4,00,000 20 225 4,00,000 ----- ----------- 2,100 31,85,000/- COST OF 8 SHOPS 2,100 X 800=16,84,200/- 3. 6 SHOPS SURRENDER TO US IN LIEU OF CONSTRUCTION COS T (AGREEMENT ENCLOSED). SHOP NO. SQ. FEET. AMOUNT 03 300 4,00,000 04 150 2,10,000 11 150 2,55,000 12 300 4,68,000 15 300 4,50,000 17 300 5,25,000 ----- ---------------- 1,500 23,08,000 COST OF CONSTRUCTION OF ABOVE SHOPS 1.500 X 802 = 12 ,03,000/- PROFIT ON SALE OF ABOVE SHOPS SALE 23,08,000/- LESS COST 12,03,0001: NARESH H. SHAH ITA NO.8691/MUM/2010 4 PROFIT 11,05,000/- 4. CONSTRUCTION OF 8 SHOPS AS ABOVE 16,84,200/- COST RECOVERED BY SALE OF 6 SHOPS (PROFIT) 11,05 ,000/- BALANCE AMOUNT NO': RECOVERED 5,79,800/- THE AVERAGE SALES PRICE OF RESIDENTIAL HOUSE IS RS.90 0/- TO RS.950/- AND THE AVERAGE SALE PRICE OF COMMERCIAL PROPERTY IS RS. 1,600/-'. FURTHER THE APPELLANT HAS NOT ACCOUNTED THE CONSIDERA TION RECEIVED ON SALE OF 8 SHOPS IN HIS BOOKS OF ACCOUNTS WHICH MEANS THAT THE SALE CONSIDERATION WAS DIRECTLY RECEIVED BY THE OTHER PE RSONS IN RESPECT OF THE 8 SHOPS TO WHICH THEY WHICH THEY WERE ENTITLED AS PER THE TRIPARTITE AGREEMENT DT.19.7.2002. IN SUCH CASE IT IS ONLY THE OTHER PERSONS WHO HAVE TO PAY THE TAX ON THE CONSIDERATION R ECEIVED BY THEM. THE APPELLANT HAS CORRECTLY CLAIMED THE COST OF 8 SHOPS AS LAND COST AND EVEN ASSUMING THAT THE ORALLY MODIFIED AGREE MENT IS NOT ACCEPTED, THE ADDITION CAN BE MADE ONLY TO THE EXTEN T OF RS. 5,79,800/- AS SUBMITTED BY THE APPELLANT IN HIS LETT ER DT. 30.12.2009 BEFORE THE A.O. ACCORDINGLY, I CONFIRM THE ADDITION OF RS.5,79,800/- AND THE BALANCE ADDITION IS DELETED. THE A.O.' SHALL C OMMUNICATE THE A.OS. OF THE OTHER 2 PERSONS REGARDING THE AMOUNT RECE IVED/ RECEIVABLE BY THEM IN RESPECT OF SALE OF 8 SHOPS CON STRUCTED BY THE APPELLANT FOR TAKING NECESSARY ACTION AGAINST THEM. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE ASSESS EE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS P REMISES OF THE ASSESSEE ON 01/11/2006, WHEREIN, THE ASSESSE E ADMITTED NET PROFIT @ 10% ON SALE CONSIDERATION. T HE ASSESSEE DECLARED TOTAL INCOME AT RS.19,05,913/- IN ITS NARESH H. SHAH ITA NO.8691/MUM/2010 5 RETURN FILED 23/09/2008, WHICH WAS ACCEPTED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, PROCEEDING U/S 147 OF THE A CT WERE INITIATED AND THE ASSESSEE, PURSUANT TO THE PROCEED INGS, FILED RETURN, ADMITTING THE TOTAL INCOME OF RS.19,05,913/ -. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143( 3) R.W.S 147 DETERMINING THE TOTAL INCOME AT RS.1,01,27,740/ -. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITT ED COPY OF TRIPARTITE AGREEMENT FOR DEVELOPMENT OF PRO JECT FROM WHICH IT WAS OBSERVED THAT THERE WAS A JOINTLY ON P LOT BY MR. RAFIQ PATEL, THE ASSESSEE AND MR. HARISH N. SHAH AT MEERA ROAD, AND BY AGREEMENT DATED 19/07/2002, ALL THESE THREE PERSONS SUB-DIVIDED TO THESE PLOTS IN THREE PARTS. AS PER THE ASSESSEE, OTHER TWO PERSONS NOT HAVING ROAD SID E FRONTAGE, THEREFORE, THE ASSESSEE CONSTRUCTED THE C OMMERCIAL SHOPS ON THE LAND ALLOTTED TO HIM, WHICH WERE EQUAL LY DIVIDED AMONGST THREE PERSONS I.E. 21 SHOPS WERE CONSTRUCTED AND THE ASSESSEE GAVE 14 SHOPS BUT INST EAD OF GIVING CONSTRUCTION COST, THE OTHER PERSONS AGREED TO FOUR SHOPS EACH AND GAVE SEVEN SHOPS TO THE ASSESSEE IN LIEU OF COST OF CONSTRUCTION. THE ASSESSEE ACTUALLY DEBITE D THE LAND COST OF RS.31,50,000/-, REPRESENTING THE SALE VALUE OF 8 SHOPS BEARING NUMBER 5 TO 10, 16 AND 20. THE ASSES SEE VIDE LETTER DATED 29/12/2009, ADDRESSED TO THE ASSE SSING OFFICER, EXPLAINED THE FACTS. THE SAID LETTER HAS BEEN REPRODUCED AT PAGE 3 AND 4 OF THE IMPUGNED ORDER. NOW, CLEAR FACT IS OOZING OUT THE ASSESSEE WAS TO SURREN DER 2/3 RD COMMERCIAL PART TO BE CONSTRUCTED BY OTHER PARTNERS PROVIDED TO CONTRIBUTE THE COST OF CONSTRUCTION AS PER NARESH H. SHAH ITA NO.8691/MUM/2010 6 AGREEMENT DATED 19/07/2002. LATER ON, AS THE OTHER TWO PERSONS DID NOT PAY THE COST OF CONSTRUCTION, AND I NSTEAD ACCEPTED FOUR SHOPS OF EACH AGAINST SEVEN SHOPS EAC H. IT IS NOTED THAT THE ASSESSEE ONLY TRANSFERRED SALE VALUE OF EIGHT SHOPS TO THE LAND COST ACCOUNT AS HIS SEEN FROM THE LEDGER ACCOUNT. THE ASSESSEE VIDE LETTER DATED 30/12/2009 , AND AGREED TO THE ADDITION OF RS.5,79,800/-. THE EXPLA NATION OF THE ASSESSEE HAS BEEN REPRODUCED AT PAGE 5 & 6 OF T HE IMPUGNED AMOUNT, THUS, THE ADDITION TO THE EXTENT O F RS.5,79,800/- WAS RIGHTLY CONFIRMED AND REMAINING A DDITION WAS DELETED. THE FACTUAL FINDING RECORDED BY THE L D. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT CONTRO VERTED BY THE REVENUE WITH THE HELP OF ANY POSITIVE MATERI AL, THUS, ON THIS GROUND, WE FIND NO INFIRMITY IN THE CONCLUS ION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). I T IS AFFIRMED. 3. THE THIRD GROUND PERTAINS TO DELETING THE ADDITI ON OF WORK IN PROGRESS AMOUNTING TO RS.29,60,039/-, WHICH WAS DISALLOWED IN A.Y. 2005-06 AND ADDED BACK IN A.Y. 2 006-07. THE LD. COUNSEL FOR THE ASSESSEE, CLAIMED THAT IMPU GNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL (I TA NO3187/MUM/2010) ORDER DATED 15/07/2011. THIS FACT UAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AS SERTION OF THE LD. COUNSEL FOR THE ASSESSEE, WE ARE REPRODUCIN G NARESH H. SHAH ITA NO.8691/MUM/2010 7 HEREUNDER, THE RELEVANT PORTION FROM THE ORDER OF T HE TRIBUNAL FOR A.Y. 2005-06 ORDER DATED 15/07/2011 TH AT TO FROM THE CASE OF ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER IN THE NAME AND STYLE OF PROPRIETARY CONCERN M/S. M.H. BUILDERS AND DEVELOPERS. HE DID NOT FILE HIS RETURN OF INCOME FOR THE UNDER CONSIDERATION TILL THE RELEVAN T DUE DATE. A SURVEY U/S 133A THEREFORE WAS CARRIED OUT A T THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURS E OF SURVEY, A STATEMENT OF THE ASSESSEE WAS RECORDED U/ S 131 WHEREIN HE STATED THAT A PROJECT KNOWN AS GAGANDEEP BUILDING AT PLEASANT PARK, MEERA- BHAYANDAR ROAD, DIST. THANE, STARTED IN THE YEAR 20 03 WAS ONLY UNDER EXECUTION DURING THE RELEVANT PERIOD . IN THE ABSENCE OF ANY BOOKS OF ACCOUNT MAINTAINED FOR THE PREVIOUS YEARS RELEVANT TO A.Y. 2005-06, 2006-07, T HE ASSESSEE AGREED TO DECLARE INCOME OF RS. 51 LAKHS F ROM THE SAID PROJECT BEING 10% OF THE TOTAL PROJECT REC EIPTS AMOUNTING TO RS. 5.10 CRORES. HE HOWEVER DID NOT FI LE ANY RETURN OF INCOME EVEN AFTER THE SURVEY. A NOTIC E U/S 148 THEREFORE WAS ISSUED BY THE ASSESSING OFFICER I N RESPONSE TO WHICH THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THERE WAS HOWEVER NO COMPLIANCE ON PART OF THE ASSESSEE TO TH E VARIOUS NOTICES ISSUED BY THE AO FIXING THE HEARING FROM TIME TO TIME. KEEPING IN VIEW THIS NON-COOPERATIVE AND NON-COMPLIANT ATTITUDE OF THE ASSESSEE, THE ASSESSI NG OFFICER WAS LEFT WITH NO OPTION BUT TO FINALIZE THE NARESH H. SHAH ITA NO.8691/MUM/2010 8 ASSESSMENT FOR THE YEAR UNDER CONSIDERATION TO THE BEST OF HIS JUDGEMENT ON THE BASIS OF MATERIAL AVAILABLE ON THE RECORD. HE FOUND THAT IN THE RETURN OF INCOME F ILED FOR A.Y. 2005-06 & 2006-07 PROFIT OF RS. 15,90,676/ - AND RS. 21,17,657/- WAS DECLARED BY THE ASSESSEE FROM GAGANDEEP BUILDING PROJECT AS AGAINST RS. 51 LACKS OFFERED DURING THE COURSE OF SURVEY. SINCE NO EXPLA NATION IN THIS REGARD WAS OFFERED BY THE ASSESSEE, THE DIF FERENCE OF RS. 13,91,667/- WAS ADDED BY THE ASSESSING OFFIC ER TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPUTED U/S 144 R.W.S. 147 VIDE AN ORDER DATED 29T H DECEMBER, 2008. IN THE SAID ASSESSMENT, HE ALSO MAD E ADDITIONS, INTER ALIA, OF RS. 42,76,000/- ON ACCOUN T OF UNSECURED LOANS U/S 68, RS. 7,88,469/- ON ACCOUNT O F DISALLOWANCE OF EXPENSES FOR NON-DEDUCTION OF TAX A T SOURCE U/S 40(A)(IA) AND RS. 39,268/- AND RS. 22,80 0/- ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION AND STAM P DUTY EXPENSES RESPECTIVELY. HE ALSO REDUCED CLOSING WORK-IN-PROGRESS SHOWN BY THE ASSESSEE BY RS. 29,60,039/- FOR THE FAILURE OF THE ASSESSEE TO FURN ISH THE DETAILS OF WORK-IN-PROGRESS AND HELD THAT OPENING W ORK- IN-PROGRESS FOR THE NEXT YEAR TO THAT EXTENT WILL B E TAKEN LESS. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R U/S 144 R.W.S. 147, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LD. CIT (A) CHALLENGING THE ADDITIONS MADE TO H IS TOTAL INCOME BY THE AO. AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND THE MATERIAL ON RECORD BEFORE HIM, THE LD. CIT (A) CONF IRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF NARESH H. SHAH ITA NO.8691/MUM/2010 9 DIFFERENCE IN THE PROFITS FROM GAGANDEEP BUILDING PROJECT ON THE BASIS OF SURRENDER MADE BY THE ASSES SEE IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY AFTER ALLOWING SMALL RELIEF FOR INCOME FROM THAT PROJECT DECLARED BY ASSESSEE IN A.Y. 2007-08. HE HOWEVER DELETED ALL THE REMAINING ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE BY ACCEPTING THE STAND OF THE ASSESSEE THAT WHEN THE A O HAD REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE ASSESSEE, THERE WAS NO JUSTIFICATION FOR MAKING FURTHER ADDITION BY RELYING ON THE SAME BOOK S OF ACCOUNT. HE HELD THAT WHEN THE AO HAD RESORTED TO ESTIMATION OF INCOME BASED ON THE MATERIAL GATHERED AT THE TIME OF SURVEY AFTER REJECTING THE BOOKS OF ACC OUNT WHICH WERE FOUND TO BE INCOMPLETE EVEN ON THE DATE OF SURVEY, THERE WAS NO JUSTIFICATION FOR MAKING FURTH ER ADDITION BY RELYING ON SUCH REJECTED BOOKS OF ACCOU NT. FOR THIS CONCLUSION, THE LD. CIT (A) RELIED ON THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE OF MADD I SUNDARAM OIL MILLS VS. CIT REPORTED IN 37 ITR 369 WHEREIN IT WAS HELD THAT WHEN THE AO REJECTS THE BO OKS OF ACCOUNT AND ESTIMATES THE INCOME OF THE ASSESSEE , NO FURTHER ADDITION CAN BE MADE RELYING ON THE REJECTE D BOOKS OF ACCOUNT. AGGRIEVED BY THE ORDER OF THE LD. CIT (A) THE REVENUE HAS PREFERRED THIS APPEAL BEFORE US . 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIAL ON RECORD. IT IS OBSERVED THAT IN THE ABSENCE OF COMPLETED BOOKS OF ACCOUNT EITHER FOUND AT THE TIME OF THE SURVEY OR PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S, NARESH H. SHAH ITA NO.8691/MUM/2010 10 THE INCOME OF RS.15,90,676/- RETURNED BY THE ASSESS EE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HE REJEC TED THE BOOK RESULTS SHOWN BY THE ASSESSEE AND ESTIMATE D THE INCOME OF THE ASSESSEE FROM HIS BUSINESS ON THE BASIS OF PROFIT OF 10% SURRENDERED BY THE ASSESSEE FROM T HE GAGANDEEP PROJECT IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY. THIS ESTIMATION AND BUSINESS INCO ME OF THE ASSESSEE BY THE ASSESSING OFFICER RESULTED IN A N ADDITION OF RS. 13,91,667/- TO THE TOTAL INCOME OF THE ASSESSEE WHICH HAS BEEN CONFIRMED BY THE LD. CIT (A ) AFTER ALLOWING A SMALL RELIEF OF RS. 3,00,373/- WHI CH HAS BEEN DECLARED BY THE ASSESSEE IN A.Y. 2007-08 AND T HE ASSESSEE, AS INFORMED TO US AT THE TIME OF HEARING, HAS NOT FILED ANY APPEAL DISPUTING THE SAID ADDITION. T HE TOTAL INCOME OF THE ASSESSEE THUS HAS BEEN FINALLY ASSESSED FOR THE YEAR UNDER CONSIDERATION ON ESTIMA TED BASIS AFTER REJECTING THE BOOKS OF ACCOUNT. IN THE CASE OF MADDI SUDARSANAM OIL MILLS (SUPRA), HONBLE ANDHRA PRADESH HIGH COURT HAS HELD THAT WHEN THE BOOKS OF ACCOUNT ARE REJECTED BY THE ASSESSING OFFICER AND T HE INCOME OF THE ASSESSEE IS DETERMINED ON ESTIMATED B ASIS, NO FURTHER ADDITION CAN BE MADE TO THE INCOME SO ESTIMATED BY RELYING ON THE REJECTED BOOKS OF ACCOU NT. TO THE SIMILAR EFFECT THE DECISION OF HONBLE MADHY A PRADESH HIGH COURT IN THE CASE OF CIT VS. PURSHOTTA MALAL TAMRAKAR UCHEHRA REPORTED IN 270 ITR 314 REPORTED I N 270 ITR 84 (MP). KEEPING IN VIEW THE RATIO LAID DOW N IN THESE JUDICIAL PRONOUNCEMENTS AND HAVING REGARD TO THE FACTS OF THE PRESENT CASE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF LD. CIT (A) DELETING THE VARIOUS NARESH H. SHAH ITA NO.8691/MUM/2010 11 ADDITIONS MADE BY THE AO RELYING ON THE BOOKS OF ACCOUNT OF THE ASSESSEE WHEN THE INCOME OF THE ASSE SSEE WAS COMPUTED ON ESTIMATED BASIS AFTER REJECTING THE SAID BOOKS OF ACCOUNT. THE SAME IS THEREFORE UPHELD AND THE APPEAL OF THE REVENUE IS DISMISSED. 3.2. WE NOTE THAT THE LD. COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE REMAINING ADDITION MADE BY TH E ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE BY ACCEPTING THE STAND OF THE ASSESSEE THAT WHEN THE A SSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATE D THE INCOME OF THE ASSESSEE, THEREFORE, THERE WAS NO JUS TIFICATION FOR MAKING FURTHER ADDITION BY PLACING RELIANCE ON THE SAME BOOKS OF ACCOUNTS. IT IS ALSO NOTED THAT WHILE COM ING TO THIS CONCLUSION, THE TRIBUNAL DULY CONSIDERED THE DECISI ON FROM HONBLE HIGH COURT IN CIT VS PURUSHOTTAM LAL TAMRAK AR UCHEHRA (270 ITR 314) (MP) AND MADDI SUNDARAM OIL M ILLS VS CIT 37 ITR 369 (AP), THUS, THIS GROUND OF THE RE VENUE IS ALSO HAVING NO MERIT. THE STAND OF THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) IS AFFIRMED. 4. THE SECOND GROUND PERTAINS TO DELETING THE ADDITION OF RS.15 LAKH BY ACCEPTING ADDITIONAL EVID ENCE WHICH IS AGAINST RULE-46A OF THE INCOME TAX RULES. THE LD. DR ADVANCED HIS ARGUMENT WHICH IS IDENTICAL TO THE GROUND RAISED BY THE REVENUE. HOWEVER, THOUGH, THE LD. CO UNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION DRAWN BY THE L D. COMMISSIONER OF INCOME TAX (APPEALS) BUT DID NOT PR ODUCE ANY EVIDENCE TO SUBSTANTIATE THAT NO ADDITIONAL EVI DENCE WAS ACCEPTED. NARESH H. SHAH ITA NO.8691/MUM/2010 12 4.1. WE HAVE PERUSED THE RECORD AND FIND THAT THER E IS A CLEAR VIOLATION OF RULE-46A OF THE RULES AS ADDIT IONAL EVIDENCE WAS ACCEPTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND EVEN NO REMAND REPORT FROM THE ASSESS ING OFFICER WAS SOUGHT. THUS, WE REMAND THIS ISSUE TO T HE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF T HE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW. THE ASS ESSEE BE GIVEN OPPORTUNITY OF BEING HEARD WITH FURTHER LIBER TY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF HIS CLAIM. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE REVENUE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 10/08/2015. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDE R SINGH) ! / ACCOUNTANT MEMBER '! / JUDICIAL MEMBER MUMBAI; DATED : 14/08/2015 F{X~{T? P.S/. .. #'$%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#$ ! / THE RESPONDENT. 3. %$%$ & ( ) / THE CIT, MUMBAI. 4. %$%$ & / CIT(A)- , MUMBAI 5. ()*$' + , %$$+ - , / DR, ITAT, MUMBAI 6. *./ / GUARD FILE. / BY ORDER, #$(' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI