The ITO, Ward-1, GANDHIDHAM V. Smt. Mehta Hema Mahendra, Anjar

ITA 997/RJT/2010

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0964 (ITAT-RAJKOT)
• Duration Of Justice: 8 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Reasonable cause; Wrong claim; Corroborative evidences
• Section: 133(6)

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.856/RJT/2010 / ASSESSMENT YEAR: 2006-07 SMT. HEMA MAHENDRA MEHTA, C/O. KALPESH S. DOSHI & CO., CHARTERED ACCOUNTANTS, 411, COSMO COMPLEX, MAHILA COLLEGE CIRCLE, RAJKOT 360 001. [PAN: ACMPM 5140M] VS. INCOME TAX OFFICER, WARD-1, GANDHIDHAM. ( / APPELLANT) ( /RESPONDENT) . / ITA NO.997/RJT/2010 / ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER, WARD-1, GANDHIDHAM. VS. SMT. HEMA MAHENDRA MEHTA, VEGETABLE MARKET, ANJAR. [PAN: ACMPM 5140M] ( / APPELLANT) ( /RESPONDENT) /ASSESSEE BY : SHRI KALPESH DOSHI, A.R /REVENUE BY : SHRI PRAVEEN VERMA, SR. DR /DATE OF HEARING : 26-11-2018 / DATE OF PRONOUNCEMENT : 27-11-2018 2 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA / ORDER PER C.M. GARG, JUDICIAL MEMBER : THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE COMMON ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, RAJKOT (CIT(A) FOR SHORT) DATED 24. 02.2010 FOR THE ASSESSMENT YEAR (A.Y) 2006-07. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.856 /RJT/2010, WHICH READ AS FOLLOWS: 1. THAT, THE LEARNED CIT(A) HAS WRONGLY CONFIRMED T HE DISALLOWANCE OF RS. 11,27,363/- OUT OF PURCHASES. 2. THAT, THE FINDING OF THE LEARNED CIT(A) IS NOT J USTIFIED IN LAW AS WELL AS FACT OF THE CASE AND REQUIRED TO BE DELETED. 2. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.997/ RJT/2010, WHICH READ AS FOLLOWS: 1. THE LD CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACTS OF THE CASE IN RESTRICTING THE ADDITION TO RS. 11,27,363/- AS AGAINST ORIGINAL ADDITION OF RS. 37,57,877/- MADE BY THE AO ON ACCOUNT OF UNA CCOUNTED PURCHASES. 2. THE LD CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 1,34,64,877/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED SUNDRY CREDITORS PROVED BOGUS . 3. THE LD CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 1,02,29,487/- MADE BY THE AO ON ACC OUNT OF AMOUNT DEPOSITED IN BANK ACCOUNT REMAINED UNEXPL AINED. ON THE FACTS OF THE CASE, LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LEARNED CIT(A)-II, RAJKOT MAY BE SET-SIDE AND THAT OF ASSESSING OFFICE R BE RESTORED. 3 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA GROUND NO.1 & 2 OF THE ASSESSEE AND GROUND NO.1 OF REVENUE: 3. APROPOS THESE CROSS GROUNDS BEING RELATED TO A S INGLE ISSUE, WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULL Y PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBU NAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE STR ANDED HOUSING PROJECT FOR LOW INCOME CATEGORY PEOPLE, WHICH WAS A PPROVED BY THE GOVT. OF GUJARAT. HE FURTHER SUBMITTED THAT THE AO DISAL LOWED ALL THE EXPENSED DEBITED TO THE P & L A/C. DESPITE THE FACT THAT THE ASSESSEE PROPERTY EXPLAINED THE NATURE AND PURPOSE OF EXPENSES ALONG WITH GENUINENESS OF EXPENSES WITH SUPPORTING DOCUMENTARY EVIDENCES AND ALSO ESTABLISH AND PROVE THAT THE SAME HAS BEEN INCURRED FOR THE PURPO SE OF BUSINESS OF THE ASSESSEE PERTAINING TO THE SAID PROJECT. THE LD. AR ALSO SUBMITTED THAT THE EXPENSES INCURRED HAS BEEN SHOWN AS WORKING PRO GRESS IN THE BOOKS OF ACCOUNTS AND BALANCE SHEET BECAUSE THE CONSTRUCT ION ACTIVITY HAVE BEEN CARRIED OUT FROM PRESENT YEAR TO SUBSEQUENT YE ARS. THE LD. AR ALSO DREW OUR ATTENTION TOWARDS PAGE 3 TO 5 OF ASSESSEE S PAPER BOOK (APB) AND SUBMITTED THAT ALL REQUIRED DETAILS AND SUPPORT ING EVIDENCE ALONG WITH RELEVANT COPIES OF THE SAMPLE BILLS, VOUCHERS AND C ONTRA ACCOUNTS OF IMPORTANT EXPENSES WERE SUBMITTED BEFORE THE AUTHOR ITIES BELOW. THE LD. AR SUBMITTED THAT LD. CIT(A) ISSUED NOTICES TO SOME CREDITORS AND CALLED FOR CONFIRMATIONS AND AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES DELETED THE MAJOR PART OF ADDITION BY PARTLY ALLOWI NG THE GROUNDS OF THE 4 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA ASSESSEE IN THIS REGARD BUT RESTRICTED THE DISALLOW ANCE TO 30% OF TOTAL CLAIMED AMOUNT I.E., RS.11,27,363/- WITHOUT ANY JUS TIFIED REASON AND BASIS THEREFORE, THE ENTIRE DISALLOWANCE/ADDITION MADE BY THE AO MAY KINDLY BE DELETED. THE LD. AR HAS ALSO PLACED RELIANCE ON TH E DECISION OF ITAT, ALLAHABAD IN THE CASE OF JCIT VS. MATHURA DAS ASHOK KUMAR REPORTED IN 101 TTJ 810 (ALL.) AND ORDER OF ITAT, HYDERABAD IN THE CASE OF VISHAL INFRASTRUCTURE LTD. REPORTED IN 107 TTJ 484 (HYD.) AND SUBMITTED THAT THE CLAIM OF THE ASSESSEE HAS TO BE ALLOWED IN TOTO WIT HOUT ANY ADDITION OR RESTRICTION THEREFORE, GROUND OF THE ASSESSEE MAY K INDLY BE ALLOWED AND THAT OF THE REVENUE MAY KINDLY BE DISMISSED ON THIS COUNT. 4. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) SUPPORTING THE ACTION OF THE AO AND CONTENTING THE GROUND OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT PRODUC E ANY BOOKS OF ACCOUNTS AND THEREFORE, ANY CLAIM MADE BY THE ASSES SEE REMAINS UNEXPLAINED. THE ASSESSEE WAS ALSO REQUESTED TO PR ODUCE ANY NUMBER OF PERSONS IN SUPPORT OF HER CLAIM. THE ASSESSEE H AS NOT PRODUCED EVEN A SINGLE PERSON IN SUPPORT OF HER CLAIM THEREFORE, THE AO WAS RIGHT IN HOLDING THAT THE CLAIM MADE BY THE ASSESSEE REMAINS UNEXPLAINED THEREFORE, HE WAS RIGHT IN MAKING ADDITION/DISALLOW ANCE IN THIS REGARD. THE LD. DR ALSO SUBMITTED THAT THE LD. CIT(A) HAS G RANTED RELIEF TO THE 5 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA ASSESSEE WITHOUT ANY BASIS AND JUSTIFIED REASON THE REFORE, IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO. 5. PLACING REJOINDER TO THE ABOVE, THE LD. AR SUBMI TTED THAT FROM THE RELEVANT PARA 3 OF THE ASSESSMENT ORDER, IT IS AMPL Y CLEAR THAT THE ASSESSEE MADE A CLAIM RELATING TO EXPENDITURE BUT T HE AO IN THE SHOW CAUSE NOTICE CONSIDERED THE WRONG ASPECT OF CLAIM A ND IN THE SHOW CAUSE NOTICE ALLEGES THE CLAIM AS PURCHASES BY THE ASSESS EE AND IGNORING THE REPLY OF THE ASSESSEE DATED 15.12.2008 IN THE LAST OPERATIVE PART FURTHER MADE DISALLOWANCE ALLEGING THE SAME AS UNEXPLAINED PURCHASES, WHICH SHOWS CASUAL APPROACH OF AO REGARDING FACTS OF THE CASE WHILE MAKING DISALLOWANCE/ADDITION AND SUCH ACTION OF THE AO BAS ED ON IRRELEVANT AND INCORRECT FACTS CANNOT BE HELD AS VALID AND SUSTAIN ABLE. THE LD. AR ALSO CONTENDED THAT THE LD. CIT(A) ACCEPTED ALL THE CONT ENTIONS OF THE ASSESSEE AND NOTED THAT THE ACCOUNTS MAINTAINED BY THE ASSESSEE IN ACCORDANCE WITH THE METHOD CONSISTENTLY FOLLOWED AN D ACCEPTED BY THE DEPARTMENT FOR THE LAST SEVEN YEARS AND THE SAME CO ULD NOT BE REJECTED WITHOUT THERE BEING ANY MATERIAL CHANGE IN THE FACT S. HE FURTHER SUBMITTED THAT WHEN NO SPECIFIC DEFECT OR DISCREPANCY HAS BEE N POINTED OUT BY THE AUTHORITIES BELOW IN THE AUDITED BOOKS OF ACCOUNTS OF THE ASSESSEE THEN, NO DISALLOWANCE OR 30% OF TOTAL CLAIM OF EXPENSES W ITHOUT ANY BASIS 6 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA CANNOT BE DISALLOWED THEREFORE, ENTIRE CLAIM OF THE ASSESSEE MAY KINDLY BE ALLOWED. 6. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, FIRST OF ALL, FOR THE SAKE OF COMPLETENESS OF OUR FINDINGS IN THIS OR DER, WE FIND IT APPROPRIATE TO REPRODUCE RELEVANT OPERATIVE PART OF THE FIRST APPELLATE ORDER, WHEREIN THE LD. CIT(A) GRANTED PART RELIEF T O THE ASSESSEE, WHICH READS AS FOLLOWS: (C) I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORDS BEFORE ME. THE ASSESSING OFFICER HELD THE ALLEGED CLAIM OF EXPENSES REMAINED JUSTI FIABLE AND BY SIMPLY FILING HEAD OF EXPENSES IT WAS NOT POSSIBLE FOR HIM TO VERIFY THE EXPENSES THE REFORE HE DISALLOWED WHOLE SUCH EXPENSES INCURRED DURING THE YEAR OFRS. 37,57,877/- THE APPELLANT FILED DETAILS OF NATIONS DURING THE APPEA L PROCEEDINGS SHE CONTENDED THAT SHE WAS ENGAGED IN THE BUSINESS OF A DEVELOPER DURING THIS YEAR SHE INCURRED EXPENSES FOR TWO PROJECTS. THE TOTAL EXPENDITURE INCURRED DURING THE YEAR WAS RS. 37,57,877/-. THE SAID EXPENSES WERE CARRIED FORWARD AS WORK IN PROGRESS TO THE NEXT FIN ANCIAL YEAR AS THE PROJECTS FOR STILL NOT COMPLETED IT WAS STARTED BY THE APPELLANT THAT SHE FLOATED A HOUSING SCHEME FOR SMALL AND WEAKER SECTI ONS OF THE SOCIETY NEAR GANDHIDHAM UNDER SEARCH SCHEME THE BUYER WAS R EQUIRED TO PAY INITIAL AMOUNT AND THE BALANCE AMOUNT IN INSTALMENT S FOR NEXT 10 YEARS TO PROVE THE GENUINENESS OF EXPENSES THE APPELLANT SUBMITTED VARIOUS DETAILS LIKE COPY OF AGREEMENT FOR PURCHASE OF PLOT COPY OF ACCOUNT FOR LABOUR CONTRACTORS AND VARIOUS AGREEMENTS CARRIED O UT WITH THEM. THE COPY OF BANK DETAILS TO PROVE THAT THE EXPENSES FOR PAID THROUGH ACCOUNT PAYEE CHEQUE AND BANK STATEMENTS OF CONTRAC TORS WERE ALSO PRODUCES SIMILARLY IN ALL OTHER EXPENSES ACCOUNT TH E APPLE AND FURNISHING COPIES OF BILLS COPY OF ACCOUNTS CONFIRM ATION LETTER CONTRA CARTOONS AND PAYMENT DETAILS. (CA) TO VERIFY FURTHER ARE ISSUED NOTICES TO SOME SUPPLIERS CALLING FOR VARIOUS DETAILS ALL THE SUPPLIERS CONFIRMED IN BRAC KET COPIES AND CLOSED THE CORRECTNESS OF TRANSACTIONS AND ALSO FIND RELEV ANT DETAILS THE APPELLANT ALSO FURNISH ID FOR THE DETAILS FOR EACH AND EVERY EXPENSES SHE ALSO FILE DETAILED ADDRESSES OF SUPPLIERS SHE A LSO ALLOWED ON THE 7 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA DECISION OF VISHAL INFRASTRUCTURE LTD. 187 TTJ 484 (HYD.) THERE IT WAS HELD THAT THE YOU ACCEPT THE FACT OF EXPENDITURE OR OUT OF SUBCONTRACTORS AND DOES THE NON AVAILABILITY OF WATCHES OF EXPENDI TURE INCURRED BY SUBCONTRACTORS WITH SSC COULD NOT BE A REASON FOR R EJECTION EVEN IN THE GOVERNMENT OFFICES MOST OF THE EXPENSES WHICH WERE PRETTY IN NATURE AND WHICH INVOLVED CASUAL LABOUR WOULD BE EXPECTED TO HAVE BEEN SELF MADE WATCHES THESE AUTHORS COULD ONLY BE JUSTIFIED THROUGH CIRCUMSTANTIAL EVIDENCES. RESONABLENESS OF THE CLAI M OF THE EXPENDITURE UNDER EACH HEAD MIGHT BE THE MATTER OF ADJUDICATION, BUT NOT REJECTION OF BOOKS. THE ACCOUNTS MAINTAINED BY THE ASSESSEE IN ACCORDANCE WITH METHOD CONSISTENTLY FOLLOWED AND AC CEPTED BY THE DEPARTMENT FOR THE LAST SEVEN YEARS COULD NOT BE RE JECTED WITHOUT THERE BEING MATERIAL CHANGE IN FACTS, MORE SO, WHEN SUCH ACCOUNTS WERE AUDITED UNDER THE COMPANIES ACT AND INCOME TAX ACT AND NO SPECIFIC DEFECTS WERE PPOINTED BY THE ASSESSING OFFICER. TH EREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF TH E CONSIDERED VIEW THAT THE DISALLOWANCE OF 30% OF SUCH EXPENSES WILL MEET THE ENDS OF JUSTICE. THEREFORE, THE DISALLOWANCE IS RESTRICTED TO RS. 11,27,363/- AS AGAINST THE DISALLOWANCE OF RS. 37,57,877/-. THERE FORE, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 7. IN VIEW OF ABOVE, WE CLEARLY OBSERVE THAT THE AS SESSEE INCURRED EXPENSES FOR TWO PROJECTS AND THE TOTAL EXPENDITURE INCURRED WAS RS. 37,57,877/-, WHICH WAS CARRIED FORWARD AS WORKING P ROGRESS TO THE NEXT FINANCIAL YEAR AS THE PROJECTS WERE NOT COMPLETED D URING THE RELEVANT PERIOD. AS PER REQUIREMENT OF THE PROJECT FLOATED BY THE ASSESSEE FOR THE WEAKER SECTION OF THE SOCIETY THE BUYERS WERE REQUI RED TO PAY INITIAL AMOUNT AND THE BALANCE AMOUNT WAS TO BE PAID DURING NEXT TEN YEARS IN A SMALL INSTALLMENTS. THE ASSESSEE PROVING GENUINENES S OF EXPENSES SUBMITTED VARIOUS DETAILS SUCH AS COPY OF AGREEMENT , COPY OF ACCOUNT FOR LABOUR CONTRACTORS AND VARIOUS AGREEMENTS ALONG WIT H COPY OF THE BANK STATEMENT SHOWING THAT THE EXPENSES WERE PAID TO AC COUNT PAYEE 8 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA CHEQUES AND BANK STATEMENTS OF CONTRACTORS WERE ALS O PRODUCED SHOWING THE CREDIT OF THE SAID CHEQUES. THE ASSESSEE ALSO FURNISHED COPY OF THE BILLS, ACCOUNTS, CONFIRMATION LETTERS AND CONTRA AC COUNTS OF RECIPIENT SHOWING THE TALLY OF PAYMENT DETAILS WHICH AGAIN SU PPORTS THE CLAIM OF THE ASSESSEE. THE LD. CIT(A) ISSUED NOTICES TO SOME S UPPLIERS AND THEY CONFIRMED THE TRANSITIONS AND FILED RELEVANT DETAIL S. THE ASSESSEE ALSO FILED DETAILS OF EXPENSES AND THE ADDRESSES OF THE SUPPLIERS BEFORE THE AO. 8. AT THE SAME TIME, WE FURTHER OBSERVE THAT THE LD . CIT(A) NOTED THAT THE AO ACCEPTED THE FACTUM EXPENDITURE ON ACCOUNT O F SUB CONTRACTORS THUS, NON AVAILABILITY OF VOUCHERS OF EXPENDITURE I NCURRED BY THE SUB CONTRACTORS WITH THE ASSESSEE COULD NOT BE A REASON FOR REJECTION OF CLAIM OF THE ASSESSEE BUT WE ARE NOT IN AGREEMENT WITH TH ESE FINDINGS AS WHEN THE ASSESSEE IS INCURRING EXPENSES AND PAYING THE S AME THROUGH ACCOUNT PAYEE CHEQUES AND WHAT PREVENTED THE ASSESSEE TO FI LE RELEVANT VOUCHERS FOR VERIFICATION AND IN THIS SITUATION, TH E POSSIBILITY OF LEAKAGE OF REVENUE OR INFLATION OF EXPENSES CANNOT BE RULED OU T. HOWEVER, WE AGREE THAT MERELY BECAUSE RELEVANT VOUCHERS HAVE NOT BEEN SUBMITTED FOR VERIFICATION THE BOOKS OF ACCOUNTS CANNOT BE REJECT ED ONLY ON THIS GROUND. AT THE SAME TIME, WE ALSO AGREE TO THE CONCLUSION D RAWN BY THE LD. CIT(A) THAT THE DISALLOWANCE OF 30% OF CLAIMED EXPENSES IS SUFFICE TO MEET THE 9 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA ENDS OF JUSTICE AS THIS AMOUNT COVERS ALL THE POSSI BLE LEAKAGE OF REVENUE IN CONSEQUENT TO THE NON AVAILABILITY OF THE RELEVA NT VOUCHERS AND OTHER DOCUMENTS FOR VERIFICATION BY THE REVENUE AUTHORITI ES. THEREFORE, WE ARE INCLINED TO HOLD THAT THE CONCLUSION DRAWN BY THE L D. CIT(A) IN RESTRICTING THE DISALLOWANCE TO 30% OF TOTAL CLAIM IS QUITE COR RECT AND JUSTIFIED. THERE IS NO VALID REASON TO INTERFERE WITH THE SAID FINDI NGS RECORDED BY THE LD. CIT(A) AND THUS, WE UPHOLD THE SAME. CONSEQUENTLY, SOLE GROUND OF THE ASSESSEE AND GROUND NO.1 OF REVENUE ARE DISMISSED. GROUND NO.2 OF REVENUE : 9. APROPOS THIS GROUND, WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON THE RECORD OF THE TRIBUNAL. THE LD. DR SUBMITTED THAT THE LD CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 1 ,34,64,877/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED SUNDRY CRED ITORS PROVED BOGUS. SUPPORTING THE ASSESSMENT ORDER, THE LD. DR SUBMITT ED THAT THE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS AND THEREFORE, A NY CLAIM MADE BY THE ASSESSEE REMAINS UNEXPLAINED, THE AO REQUESTED THE ASSESSEE TO PRODUCE RELEVANT PERSONS/SUNDRY CREDITORS TO PRODUCE IN SUP PORT OF HER CLAIM BUT THE ASSESSEE HAS NOT PRODUCED EVEN A SINGLE CREDITOR TO SUPPORT THE CLAIM. THEREFORE, THE AO WAS RIGHT IN DISALLOWING THE ENTI RE AMOUNT OF SUNDRY CREDITORS SHOWN BY THE ASSESSEE IN THE BALANCE SHEET BEING TH E BOGUS CLAIM OF THE 10 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA ASSESSEE. THE LD. DR FURTHER SUBMITTED THAT THE LD . CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY REASONABLE CAUSE AND THERE FORE, THE IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO . 10. REPLYING TO THE ABOVE, THE LD. AR SUPPORTED THE FIRST APPELLATE ORDER AND SUBMITTED THAT THE AO HAS MADE ADDITION OF ALL THE CREDITORS SHOWN IN THE BALANCE SHEET DESPITE THE FACT THAT THE ASSESSEE SU BMITTED ALL RELEVANT DETAILS TO PROVE THE GENUINENESS OF SUNDRY CREDITORS AND PRIMA RY ONUS HAS BEEN DULY DISCHARGE BY THE APPELLANT. THE LD. AR SUBMITTED T HAT AT PAGE NO.6, THE LD. CIT(A) HAS REPRODUCED DETAILED TABLE SHOWING THE CL AIM OF THE ASSESSEE AND MAJOR AMOUNTS HAS BEEN RECEIVED ON ACCOUNT OF BOOKI NG OF RESIDENTIAL UNITS/FLATS FROM VARIOUS ALLOTTEES AND SALE OF RESPECTIVE UNITS /FLATS HAVE BEEN MADE TO THESE PARTIES IN THE SUBSEQUENT ASSESSMENT YEARS. THE LD . AR ALSO SUBMITTED THAT FROM PARA (CA) AT PAGE 11 OF THE FIRST APPELLATE OR DER, IT IS CLEAR THAT THE LD. CIT(A) ISSUED NOTICE U/S. 133(6) OF THE ACT AND THE RELEVANT PARTIES CONFIRMED THE TRANSACTIONS WITH THE ASSESSEE THEREFORE, THE S AME CANNOT BE DOUBTED. THE LD. AR ALSO SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS GRANTED RELIEF TO THE ASSESSEE AFTER VERIFICATION O F ALL RELEVANT DOCUMENTS AND EVIDENCES THEREFORE, CONCLUSION RECORDED BY THE LD. CIT(A) MAY KINDLY BE UPHELD BY DISMISSING APPEAL/GROUND OF REV ENUE. WE ALSO PLACED RELIANCE ON THE DECISION OF ITAT, DELHI IN T HE CASE OF SHRI VARDHMAN OVERSEAS LTD. VS. ACIT REPORTED IN 24 SOT 393 (DEL.) AND 11 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA DECISION OF HONBLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT VS. NEVENDRAM AHUJA REPORTED IN 290 ITR 453 (MP) AND ALSO SOUGHT STRONG SUPPORT FROM THE PREPOSITION RENDERED BY ITAT, AHME DABAD IN THE CASE OF ITO VS. PIC (GUJARAT) LTD. REPORTED IN 119 TTJ 410 (AHD.). 11. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS, IN THE PRESENT CASE, THE AO HAS NOT BROUGHT ON RECORD ANY ADVERSE FINDING OR ALLEGATION TO SHOW THAT THE IMPUGNED DEPOSITORS/SUNDRY CREDITO RS, IN FACT, DID NOT REPRESENT THE SALE PROCEEDS AND REPRESENTS THE UNAC COUNTED INCOME OF THE ASSESSEE SHOWN IN THE BALANCE SHEET IN THE GARB OF SUNDRY CREDITORS ON ACCOUNT OF BOOKING OR ALLOTMENT OR SALES OF UNIT S/FLATS. THEREFORE, THE LD. CIT(A) WAS RIGHT IN HOLDING THAT WITHOUT ANY C ONCRETE MATERIAL OR EVIDENCE SHOWING UNEXPLAINED OR UNACCOUNTED INCOME OF THE ASSESSEE INTRODUCED IN THE COVER OF SUNDRY CREDITORS, THE AD DITION MADE BY THE AO MERELY ON THE BASIS OF SUSPICION, PRESUMPTION AND A SSUMPTION CANNOT BE HELD AS SUSTAINABLE. 12. AT THE SAME TIME, IT IS RELEVANT TO NOTE THAT F ROM PARA 3 OF THE IMPUGNED ORDER, WE OBSERVE THAT THE LD. CIT(A) HAS CALLED THE ASSESSEE TO SUBMIT ALL THE DETAILS OF TRANSACTION WITH EACH AND EVERY CREDITOR WHICH WAS SUBMITTED BY THE ASSESSEE AND REPRODUCED BY TH E LD. FIRST APPELLATE AUTHORITY IN PARA (C) AT PAGES 6 TO 11 OF THE FIRST APPELLATE ORDER. THEREAFTER, THE LD. CIT(A) ISSUED NOTICES U/S. 133( 6) OF THE ACT TO NINE 12 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA MAJOR PARTIES/SUNDRY CREDITORS AND ALL THE PARTIES REPLIED TO THE NOTICE AND COPIES OF THEIR REPLIES WERE VERIFIED BY THE LD. CI T(A) IN THE SUBSEQUENT PARAS OF IMPUGNED ORDER, WHICH SHOWS THE EXERCISE A ND EXAMINATION UNDERTAKEN BY THE LD. CIT(A) BEFORE GRANTING RELIEF TO THE ASSESSEE. 13. IN THE LAST OPERATIVE OF THE IMPUGNED ORDER, TH E LD. CIT(A) REFERRED TO THE RATIO OF THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. NAVENDRAM AHUJA ( SUPRA) AND THEREAFTER, RECORDED AS FINDING THAT THE ADDITION/DISALLOWANCE MADE ON THE BASIS OF PRESUMPTION AND ASSUMPTION IS NOT SUSTAINABLE AND CORRECT IN VI EW OF THE ABSENCE OF CONCRETE AND SUSTAINABLE ALLEGATION AND EVIDENCE OR ADVERSE MATERIAL AGAINST THE ASSESSEE. IN VIEW OF ABOVE, WE ARE UNA BLE TO SEE ANY VALID REASON TO INTERFERE WITH THE FINDINGS ARRIVED BY TH E LD. CIT(A) AND THUS, WE UPHOLD THE SAME. ACCORDINGLY, GROUND NO.2 OF REVEN UE IS DISMISSED. GROUND NO.3 : 14. APROPOS GROUND NO.3, WE HAVE HEARD THE ARGUMENT S OF BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR SUBMITTED THAT ON VERIFICATION OF THE DETAILS OF TH REE BANK ACCOUNTS OF THE ASSESSEE THE AO FOUND THAT HUGE AMOUNTS HAVE BEEN D EPOSITED TO THE BANK ACCOUNTS WITH DENA GUJARAT GRAMIN BANK, GMC BA NK AND BHUJ MERCANTILE CO-OP. BANK DURING THE RELEVANT PERIOD A ND THE ASSESSEE DID NOT PRODUCE ANY BOOKS OF ACCOUNTS AND THEREFORE, SO URCE OF THESE 13 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA DEPOSITS REMAINED UNEXPLAINED. THE LD. DR FURTHER SUBMITTED THAT SINCE THE ASSESSEE FAILED TO ESTABLISH DIRECT NEXUS BETWE EN THE DEPOSIT MADE IN THE BANK ACCOUNT AND HERE ALLEGED CLAIM REGARDING S OURCE OF THESE AMOUNTS THEREFORE, THE AO WAS RIGHT IN MAKING ADDIT ION IN THIS REGARD. 15. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS GR ANTED RELIEF TO THE ASSESSEE WITHOUT ANY JUSTIFIED REASON AND BASIS THE REFORE, THE SAME MAY KINDLY BE DISMISSED AND ORDER OF THE AO ON THIS ISS UE MAY KINDLY BE RESTORED. 16. REPLYING TO THE ABOVE, THE LD. AR SUBMITTED THA T THE AO HAS MADE ADDITION ON ACCOUNT OF DEPOSITS TO THREE BANK ACCOU NTS WHICH ARE MAINLY RECEIVED BY THE ASSESSEE ON ACCOUNT OF BOOKING ADVA NCES RECEIVED FROM VARIOUS BUYERS/ALLOTTEES FOR THE UNITS/FLATS SOLD T O THEM IN TWO HOUSING PROJECTS OF THE ASSESSEE. THE LD. AR FURTHER SUBMI TTED THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS AND THESE TRANSACTIONS HAVE BEEN PROPERTY RECORDED AND REFLECTED THEREIN WHICH AGAIN GET SUPPORT FROM THE STATEMENT OF BANK ACCOUNT OF THE ASSESSEE. 17. THE LD. AR VEHEMENTLY SUBMITTED THAT THE LD. CI T(A) ISSUED DETAILED NOTICE CALLING VARIOUS DETAILS WHICH WERE DULY SUBM ITTED BY THE ASSESSEE ABOUT THE DEPOSITS IN THE BANK ACCOUNT WHICH HAS BE EN PRODUCED IN PARA (CB) AT PAGE 18 OF THE FIRST APPELLATE ORDER SUPPOR TED WITH THE SOURCE OF DEPOSITS IN THE SAID THREE ACCOUNTS. THE LD. AR AL SO SUBMITTED THAT THE 14 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA ASSESSEE HAS EXPLAINED THE SOURCE OF ALL DEPOSITS A LONG WITH SUPPORTING EVIDENCES DISCHARGING THE PRIMARY ONUS LAY ON HER S HOULDERS. HE FURTHER SUBMITTED THAT THE BOOKING ADVANCES HAVE BEEN SHOWN AS SALES INT EH SUBSEQUENT ASSESSMENT YEARS AND IN SUBSEQUENT TY 20 08-09 & 2010-11 SCRUTINY ASSESSMENT HAVE BEEN MADE WITHOUT ANY ADDI TION AND ACCEPTING THE SALES AGAINST WHICH THE AMOUNTS WERE RECEIVED A ND DEPOSITED BY \THE ASSESSEE TO THESE BANK ACCOUNTS. THE LD. AR FINAL LY SUBMITTED THAT THE ALLEGATIONS OF THE AO HAVE NO LEGS TO STAND ON THE FACTUAL MATRIX OF THE CASE AND AFTER CALLING THE ALL DETAILS AND RELEVANT DOCUMENTARY EVIDENCE AND AFTER PROPERTY EXAMINING AND VERIFYING THE SAME THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE THEREFORE, IMPUGNED ORDER BEING SUSTAINABLE MAY KINDLY BE UPHELD BY DISMISSING GROU ND OF REVENUE. 18. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS, FROM THE FIRST APPELLATE ORDER, WE OBSERVE THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITH FOLLOWING OBSERVATIONS AND FINDING: (CD) IT CAN BE SEEN FROM THE ABOVE DETAILS THAT TH E APPLE AND DEPOSITED CASH ALSO ON VARIOUS DATES TOTALLING TO R S. 48,83,460/-. THE SOURCE OF THE SAME WAS EXPLAINED TO BE THE AMOUNT R ECEIVED AN ACCOUNT OF ADVANCES RECEIVED FROM THE PROSPECTIVE B UYERS OF THE APPELLANTS BUILDING PROJECTS. IN THE ASSESSMENTS T HEY WERE ADDED A SUM OF RS. 1,02,29,487/- AS EXPLAINED BANK DEPOSITS THAT INCLUDED IN THE AMOUNTS CAME BY WAY OF CHEQUES ALSO. THE FOLLO WING TABLE PROVIDES THE BREAKUP DETAILS OF THIS SAID SUM: SR. NO. NAME OF CREDITORS AMOUNT (ADDITION AS PER GROUND NO.2) SIMILAR ADDITION IN GROUND NO.3 1. DEPOSIT (CHAGAN HAJA) 20,000/ - 15 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA 2. DEPOSITS S - 4 A/C 2,59,000/ - 3. DEVA RAJA 54,000/ - 4. D.J. MEHTA (HUF) 51,763/ - 5. EKTA DEVELOPERS 5,50,000/ - THROUGH CHEQUE RS. 2,50,000/ - 6. HOUSE FUNDS (BHAKTINAGAR) 90,32,650/ - THROUGH CHEQUE RS.29,45,987/ - CASH RS. 47,96,000/- 7. SHANTIDHAM HOUSE INSTALLMENT ACCOUNT 3,45,000/ - THROUGH CHEQUE RS.80,040/ - CASH RS. 87,460/- 8. INT. (BHAKTINAGAR) 31,320/ - 9. M.J. MEHTA 4,72,422/ - 10. M.J. MEHTA (HUF) 2,50,725/ - THROUGH CHEQUE RS. 2,50,000/ - 11. P.D. MEHTA 90,000/ - THROUGH CHEQUE RS. 90,000/ - 12. PRAVINCHANDRA BHOGILAL & BRO. 16,07,507/ - THROUGH CHEQUE RS.15,00,000/ - 13. SHOP DEPOSIT 4,90,000/ - 14. SHOP INSTALLMENT 2,10,000/ - 15. OTHERS NIL RS. 2,30,000/ - (INTER BANK TRANSFER) TOTAL 1,34,64,887/ - 1,02,29,487/ - (CDA) I ALSO VERIFY THE CORRECTNESS AND GENUINENESS OF THE ABOVE DETAILS WHEN I DISCUSS THE APPELLANTS EDITION ON BO GUS SUNDRY CREDITORS IN PARA 3. ULTIMATELY, I FOUND THAT THERE WERE ATT EMPTED AND MADE DOUBLE EDITION OF THE SAME ITEMS IN THE ASSESSMENT ORDER THAT WERE DISCUSSED IN PARIS 3 & 4 OF MY APPELLATE ORDER. FO R EXAMPLE, THE HOUSE POINTS OF RS. 90,32,650/- FROM BHAKTI NAGAR WERE AT FIRST ADDED BY THE AO AS UNEXPLAINED SUNDRY CREDITORS THESE AMOUNTS NATURALLY WOULD APPEAR AS CASH OBLIQUE DEPOSITS IN THE BANK ACCOUNT S. THE EVER AGAIN TREATED THE VERY SAME AMOUNT AS UNEXPLAINED BANK DE POSITS AND ADDED IT IS NOT CORRECT THE I ALSO DID NOT GIVE ANY FINDI NG ON THE GENUINENESS OF THE HOUSE BY YEARS HE WOULD NOT HAVE ANY POSITION T O COMMENT ABOUT THE GENUINENESS OF THESE BY US AS HE FAILED TO CARR Y OUT SOME SORT OF ENQUIRIES WITH THE HOUSE BUYERS OF THESE PROJECTS. IN A NUTSHELL, THE AMOUNT ADDED AND ACID AS UNEXPLAINED SUNDRY CREDIT ORS CONTAINED THE SUM OF RS. 1,02,29,487/- ADDED BY THE WAY AS UNEXP LAINED BANK DEPOSITS WITHOUT ANY INCRIMINATING MATERIAL ON THE RECORDED TO SHOW THAT BOTH ARE OF DIFFERENT AMOUNTS IT IS VERY DIFFI CULT TO SUSTAIN THIS EDITION THE ADDITION IS DELETED. 19. IN VIEW OF ABOVE FINDINGS RECORDED BY THE LD. C IT(A), FIRST OF ALL, WE MAY POINT OUT THAT THE LD. CIT(A) HAS CALLED ALL TH E DETAILS FROM THE ASSESSEE REGARDING DEPOSING TO ALL THREE BANK ACCOU NTS WHICH WERE SUBMITTED BY THE ASSESSEE AND HAVE BEEN REPRODUCED IN PARA (CB) AT PAGE 18 TO 21 OF THE FIRST APPELLATE ORDER. THE LD . CIT(A) THEREAFTER, NOTED 16 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA THAT THE ASSESSEE DEPOSITED TOTAL RS. 48,83,460/- C ASH AMOUNT TO THESE THREE BANK ACCOUNTS AND THE SOURCE OF THE SAME HAS BEEN EXPLAINED AS THE AMOUNTS RECEIVED ON ACCOUNT OF ADVANCES RECEIVE D FROM THE PROSPECTIVE BUYERS OF FLATS/UNITS IN THE TWO PROJEC TS OF THE ASSESSEE. THE LD. CIT(A) IN PARA 3 (CD) HAS MENTIONED A TABLE SHO WING THE AMOUNTS SHOWN BY THE ASSESSEE AS SUNDRY CREDITORS TOTALING TO RS. 1,34,64,887/- (ADDITION ON THIS COUNT MADE BY THE AO HAS BEEN DEL ETED BY THE LD. CIT(A) AND FINDINGS OF THE LD. FIRST APPELLATE AUTH ORITY HAS BEEN CONFIRMED BY US IN THE EARLIER PART OF THIS ORDER). FURTHER, IN THE SAID TABLE, THE LD. CIT(A) HAS ALSO CONSIDERED AND NOTED THE AMOUNT OF RS. 1,02,29,487/- WHICH IS THE IMPUGNED AMOUNTS DEPOSITED TO THE SAID THREE BANK ACCOUNTS OF THE ASSESSEE. THESE FACTUAL FINDINGS HA VE NOT BEEN CONTROVERTER BY THE AO OR LD. DR DURING ARGUMENTS B EFORE US. THEREFORE, THESE FACTUAL FINDINGS SUPPORTS THE CONCLUSION ARRI VED BY THE LD. CIT(A) THAT THE AMOUNTS ADDED AND ASSESSED AS UNEXPLAINED SUNDRY CREDITORS INCLUDES THE IMPUGNED AMOUNT OF RS. 1,02,29,487/- W HICH WAS DEPOSITED TO THE THREE BANK ACCOUNTS OF THE ASSESSEE THEREFOR E, THE SAME CANNOT BE TREATED AS UNEXPLAINED BANK DEPOSITS IN ABSENCE OF ANY ADVERSE OR POSITIVE INCRIMINATING EVIDENCE OR MATERIAL. THUS, WE ARE INCLINED TO HOLD THAT THE FINDINGS RECORDED BY THE LD. CIT(A) ARE QU ITE CORRECT AND WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH TH E SAME AND HENCE, WE 17 ITA NOS.856 & 997/RJT/2010 (A.Y: 2006-07) SMT. MEHTA HEMA MAHENDRA UPHOLD THE SAME. CONSEQUENTLY, GROUND NO.3 OF REVE NUE IS ALSO STANDS DISMISSED. 20. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AS WELL AS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 7 TH NOVEMBER, 2018 RAJKOT / ; & / DATED : 27 TH NOVEMBER, 2018/ EDN, SR. P.S ! #$ %$ / COPY OF THE ORDER IS FORWARDED TO : 1. * / THE APPELLANT ; 2. +,* / THE RESPONDENT ; 3. . ( ) / THE CONCERNED CIT(A); 4.THE CONCERNED PRL. CIT; 5. / + , , / DR, ITAT, / RAJKOT; 6. / GUARD FILE . // BY ORDER // ASSISTANT REGISTRAR, ITAT, RAJKOT BENCH, RAJKOT SD/- SD/- ( . . /O.P.MEENA) / ACCOUNTANT MEMBER ( . . /C.M.GARG) /JUDICIAL MEMBER