Smt. Premilaben A.Jariwala, Surat V. The ACIT.,Cent.Circle-4, Surat

ITSSA 155/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0122 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: PROF S SAMPATH
• Keywords: Unexplained investment; Unexplained expenditure; Loose papers; Document seized; Documents seized
• Section: 69C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT ME MBER SMT. PREMILABEN A. JARIWALA, (PROP. VIGNESHWAR FABRICS) 3/1810, GHAMLAWAD, SHERI NO. 1, SALABATPURA, SURAT PAN: AALPJ9580F (APPELLANT) VS ASSTT. COMMISSIONER OF INCOME, CENTRAL CIRCLE-4, SURAT (RESPONDENT) REVENUE BY: SRI K.C. MATHEWS, SR.D.R. ASSESSEE BY: SRI PROF. S. SAMPATH, A .R. DATE OF HEARING : 01-04-2014 DATE OF PRONOUNCEMENT : 04-04-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-II AHMEDABAD DATED 13-12-2010. IT(SS)A NO. 155/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.(SS).A NO. 155 /AHD/2011 A.Y. 2006-07 PAGE NO SMT. PREMILABEN A. JARIWALA (PROP. M/S. VIGNESHWAR FABRICS VS. ACIT) 2 2. AT THE TIME OF HEARING ONLY FOLLOWING TWO GROUND S WERE PRESSED:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN- -CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF U NEXPLAINED INVESTMENT OF RS. 10,43,994/- MADE IN BANK ACCOUNT OF THE APPELLANT. -WITHOUT CONSIDERING THE FACT THAT THE AMOUNT DEPOS ITED IN THE BANK ACCOUNT COMPRISES MAINLY OF LOAN RECEIVED FROM BUSI NESS ASSOCIATES. -AND THE DOCUMENTARY EVIDENCE OF WHICH HAS BEEN SUB MITTED TO THE LD. CIT(A) AS WELL AS THE AO DURING THE COURSE OF APPEL LATE/ASSESSMENT PROCEEDINGS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)- II HAS ERRED IN MAKING ADDITION OF RS. 50,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE WHICH IS ON ACCOUNT OF TOTA LING ERROR MADE WHILE RECONCILING THE LOOSE PAPERS WITH THE COMPUTE RIZED BOOKS OF ACCOUNTS. 3. GROUND NO. 1 RELATES TO ADDITION OF RS. 10,43,99 4/- MADE BY AO ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN BANK ACCO UNT OF THE ASSESSEE WHICH WAS CONFIRMED BY LD. CIT(A). 4. BRIEF FACTS OF THE CASE ARE THAT AO OBSERVED DUR ING THE ASSESSMENT PROCEEDINGS THAT DURING THE COURSE OF SEARCH AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI NAGINDAS T. KAPADIA, EVIDENCE OF EXISTENCE AND POSSESSION OF BANK ACCOUNTS DESCRIBED AS ANNEXURE- B TO PANCHNAMA DATED 14 TH DECEMBER, 2005 WERE FOUND. ACCORDING TO THESE DOC UMENTS ASSESSEE WAS OPERATING A BANK ACCOUNT WHICH WAS NOT REFLECTE D IN THE RETURN OF INCOME AND THE ACCOMPANYING BALANCE SHEET OF THE AS SESSEE. INTEREST FROM THIS ACCOUNT WAS ALSO NOT OFFERED FOR TAXATION. RE GARDING SOURCE OF DEPOSIT I.T.(SS).A NO. 155 /AHD/2011 A.Y. 2006-07 PAGE NO SMT. PREMILABEN A. JARIWALA (PROP. M/S. VIGNESHWAR FABRICS VS. ACIT) 3 IN THE ACCOUNT THE ASSESSEE SUBMITTED THAT THESE HA VE BEEN RECEIVED FROM FRIENDS AND RELATIVES AND CONFIRMATIONS WERE FILED BUT THE AO HELD THAT THESE WERE NOT GENUINE AND DEPOSITS WERE NOT PROVED AS TH E ASSESSEE DID NOT PROVE THE GENUINENESS OF THE TRANSACTION, IDENTITY AND CR EDITWORTHINESS OF THE CREDITORS. HE ALSO OBSERVED THAT THERE WAS VARIATI ON IN THE SIGNATURE OF THE CREDITORS IN THE VARIOUS CONFIRMATIONS FILED IN GRO UP CASES OF THE ASSESSEE. HE THEREFORE MADE THE ADDITION OF RS. 10,43,994/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE BANK ACCOUNT U/S. 69 OF THE IT ACT. THIS ACTION OF THE AO WAS CONFIRMED BY LD. CIT(A) WHEN A SSESSEE WENT IN APPEAL BEFORE HIM. 5. FURTHER AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING LEARNED COUNSEL OF THE AS SESSEE AT THE OUTSET SUBMITTED THAT DEPOSITS AMOUNTING TO RS. 10,43,994/ - IN THE ACCOUNT WERE MADE BY ASSESSEE DURING THE ASSESSMENT YEAR 2005-0 6 AND THEREFORE ADDITION CANNOT BE MADE DURING THE YEAR UNDER APPEA L. CONCLUDING THE ARGUMENT, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITIONS SO MADE BY AO AND SUSTAINED BY LD. CIT(A) MAY KINDLY B E DELETED. LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF LOWER AUTH ORITIES. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD PARTICULARLY PAGE NOS. 48 AND 49 OF THE PAPER BOOK, WE AGREE WIT H THE CONTENTIONS OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THESE DEPOSITS WERE MADE IN THE SAID BANK ACCOUNT DURING THE ASSESSMENT YEAR 2005-06 AND THEREFORE ADDITION CANNOT BE MADE DURING THE YEAR UNDER APPEAL FOR UNE XPLAINED INVESTMENT. I.T.(SS).A NO. 155 /AHD/2011 A.Y. 2006-07 PAGE NO SMT. PREMILABEN A. JARIWALA (PROP. M/S. VIGNESHWAR FABRICS VS. ACIT) 4 THE ADDITION SO MADE AND SUSTAINED BY LD. CIT(A) IS HEREBY DELETED. AO HOWEVER WILL BE AT LIBERTY TO TAKE COGNIZANCE OF TH ESE DEPOSITS FOR ASSESSMENT YEAR 2005-06 AS PER LAW. THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. GROUND NO. 2 RELATES TO ADDITION OF RS. 50,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 9. DURING THE COURSE OF SEARCH PROCEEDINGS IN THE P REMISES OF SHRI KAPADIA LOOSE PAPER ANNEXURE A-1/14 CONTAINING 22 P APERS WAS SEIZED. THESE PAPERS SHOWED THE TOTAL PURCHASES OF RS. 15,6 9,618/- WHEREAS AS PER BOOKS OF ACCOUNT THE PURCHASES WERE OF RS. 15,19,61 8/-. THE DIFFERENCE WAS NOT PROPERLY EXPLAINED. AT THE TIME OF ASSESSMENT YEAR, THEREFORE AO MADE ADDITION OF RS. 50,000/- U/S. 69C OF THE ACT ON ACC OUNT OF UNEXPLAINED EXPENDITURE. 10. BEFORE LD. CIT(A), ASSESSEES SUBMISSION THAT THERE WERE TOTALING/ARITHMETIC ERROR BY AO WHILE MAKING THIS A DDITION WAS NOT ACCEPTED BY LD. CIT(A) IN THE ABSENCE OF RELEVANT DETAILS BE ING NOT FILED BEFORE HIM. HOWEVER BEFORE US LEARNED COUNSEL OF THE ASSESSEE A T THE TIME OF HEARING TOOK US TO RELEVANT PAGES OF PAPER BOOK PARTICULARL Y PAGE NOS. 37,44, AND 47 TO SHOW THAT THERE WAS TOTALING ERROR BY AO WHILE T AKING THE PURCHASES OF THE ASSESSEE AMOUNTING TO RS. 15,69,618/- AS PER THE SE IZED DOCUMENTS. AS A MATTER OF FACT, THE PURCHASES AS PER BOOKS OF ACCOU NTS AND AS PER SEIZED DOCUMENTS WERE OF RS. 15,19,618/- ONLY AND THEREFO RE NO ADDITION WAS CALLED FOR. THEREFORE THE ADDITION SO MADE AND SUS TAINED BY LD. CIT(A) IS HEREBY DELETED. THIS GROUND OF ASSESSEE IS ALSO AL LOWED. I.T.(SS).A NO. 155 /AHD/2011 A.Y. 2006-07 PAGE NO SMT. PREMILABEN A. JARIWALA (PROP. M/S. VIGNESHWAR FABRICS VS. ACIT) 5 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 04/04/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,