The ACIT, Central Circle-1(4), Ahmedabad V. Shri Alisagar Anvarali Varteji, Bhavnagar

ITSSA 108/AHD/2012

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3623 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AP ARNA AGRAWAL
• Assessee Lawyers: P B PARMAR
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) IT(SS)A. NO: 108/AHD/2012 (ASSESSMENT YEAR: 2009-10) ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD V/S SHRI ALIASGAR ANVARALI VARTEJI 261, GIDC, CHITRA, BHAVNAGAR (APPELLANT) (RESPONDENT) PAN: AAWPV4615L APPELLANT BY : SMT. APARNA AGRAWAL, CIT/D R RESPONDENT BY : SHRI TUSHAR HEMANI & P.B. PARMAR ( )/ ORDER DATE OF HEARING : 07 -02-201 8 DATE OF PRONOUNCEMENT : 12 -02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-I, AHMEDABAD DATED 14.11.2011 PERTAI NING TO A.Y. 2009-10. IT(SS)A NO. 108/AHD/2012 . A.Y. 2009-1 0 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 2,27,86,693/- MADE ON ACCOUNT OF PE AK OF NEGATIVE CASH AS UNDISCLOSED INVESTMENTS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEA RCH AND SEIZURE OPERATION TOOK PLACE AT THE PREMISES OF THE ASSESSEE GROUP ON 05.0 2.2009. THE APPELLANT GROUP HAS MADE A TOTAL DISCLOSURE OF RS. 786 LACS. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THERE IS A NEGATIVE CASH BALANCE IN THE CASH B OOK OF THE ASSESSEE FROM 01.04.2008 TO 22.09.2008 AND THE MAXIMUM NEGATIVE B ALANCE WAS RS. 2,27,86,693/-. ASSESSEE WAS ASKED TO EXPLAIN THE RE ASONS OF THESE NEGATIVE BALANCES. 5. IT WAS EXPLAINED THAT THE UNDISCLOSED INCOME OF RS. 2.82 CRORES EARNED BY THE GROUP HAS BEEN INTRODUCED IN THE BUSINESS OF VARIOU S CONCERNS FOR MAKING PAYMENTS FOR THE PURCHASES AND EXPENSES IN CASH. IT WAS FURTHER EXPLAINED THAT DURING THE COURSE OF THE SEARCH OPERATION ITSELF, T HE ASSESSEE AND HIS BROTHERS EXPLAINED THE NEGATIVE CASH POSITION AND THE UTILIZ ATION AND ACCORDINGLY OFFERED UNDISCLOSED INCOME OF RS. 282.91 LACS. 6. THE CONTENTION OF THE ASSESSEE DID NOT FIND ANY FAV OUR WITH THE A.O. WHO COMPLETED THE ASSESSMENT PROCEEDINGS BY MAKING ADDI TION OF RS. 2,27,86,693/- AS FURTHER UNDISCLOSED INVESTMENT. 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CLAIM. IT(SS)A NO. 108/AHD/2012 . A.Y. 2009-1 0 3 8. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS CONVINCED THAT THE ASSESSEE HAS USED THE UNDISCLOSED INCOME I N ITS REGULAR BUSINESS AND THEREBY APPLIED IN UNACCOUNTED ASSETS WHICH ARE DUL Y DISCLOSED OFFERED FOR TAXATION AND ACCORDINGLY DIRECTED THE A.O. TO DELET E THE ADDITION OF RS. 2,27,86,693/-. 9. BEFORE US, THE LD. D.R. STRONGLY SUPPORTED THE FIND INGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT DURING THE COURSE OF THE SEA RCH PROCEEDINGS ITSELF, THE ASSESSEE DISCLOSED RS. 2,40,56,888/- WHICH WAS BIFU RCATED AS UNDER: (I) FDRS IN THE NAME OF SANSUDHA VINIMAY PVT. LTD. RS. 1,49,85,000/- (II) EXCESS STOCK RS. 57,50,750/- (III) RECEIVABLES RS. 20,64,250/- (IV)JEWELLERY RS. 12,56,888/- TOTAL RS. 24056888 /- 11. DURING THE COURSE OF SEARCH, WHEN NEGATIVE CASH BAL ANCE OF RS. 2,27,86,693/- WAS CONFRONTED TO THE ASSESSEE, THE PARTNER EXPLAIN ED THAT SUCH NEGATIVE BALANCE WAS ON ACCOUNT OF PAYMENT MADE OUT OF UNACC OUNTED INCOME AND THE UNACCOUNTED INCOME HAS BEEN OFFERED AS PART OF OVER ALL DISCLOSURE. IN OUR CONSIDERED OPINION WHEN THE ASSETS WERE ACQUIRED OU T OF UNDISCLOSED INCOME AND WHEN THE ENTRIES ARE MADE IN THE BOOKS OF ACCOU NTS, IT IS BOUND TO RESULT IN NEGATIVE CASH BALANCE. HENCE, THE BENEFIT OF TELESC OPING OF SUCH NEGATIVE CASH BALANCE AGAINST DISCLOSURE MADE ON APPLICATION OF F UNDS HAS TO BE ALLOWED. THE IT(SS)A NO. 108/AHD/2012 . A.Y. 2009-1 0 4 REVENUE CANNOT MAKE ADDITIONS ON BOTH COUNTS THAT I S ON THE ONE HAND, THE ADDITIONS OF INCOME HAS BEEN MADE AND ON THE OTHER HAND THE ASSETS ACQUIRED OUT OF SUCH INCOME IS TREATED AS UNEXPLAINED INVEST MENT. THE REVENUE CANNOT BLOW HOT AND COLD IN THE SAME BREATH. 12. CONSIDERING THE FACTS OF THE CASE IN HAND IN TOTALI TY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). A PPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 02- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12 /02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD