M/s. Tirupati Construction Co., Bharuch V. The ACIT.,Cent.Circle-2, Bharuch

ITSSA 179/AHD/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9517 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-10-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 11-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Depreciation; Principle of natural justice; Bad and doubtful debts

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) IT(SS)A NO.178 TO 182/AHD/2009 [ASSTT.YEAR : 2003-2004, 2004-2005, 2005-2006, 2006 -2007 AND 2007-2008] M/S. TIRUPATI CONSTRUCTION COMPANY 3-4, BHAGYODAY ESTATE ZADESHWAR CHOKDI, BHARUCH. PAN : AACFT 9517 H /VS. ACIT, CENT.CIR.2 BARODA. IT(SS)A NO.73 TO 75/AHD/2010 [ASSTT.YEAR : 2004-2005, 2005-2006 AND 2006-2007] ACIT, CENT.CIR.2 BARODA. /VS. M/S. TIRUPATI CONSTRUCTION COMPANY 3-4, BHAGYODAY ESTATE ZADESHWAR CHOKDI, BHARUCH. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI S.N. DIVETIA + 2 3 )/ REVENUE BY : SHRI O.P. VAISHNAV, CIT-DR 5 2 &(*/ DATE OF HEARING : 9 TH OCTOBER, 2013 678 2 &(*/ DATE OF PRONOUNCEMENT : 13/11/2013 )9 / O R D E R PER BENCH : THIS GROUP OF APPEALS, FIVE BY THE ASSESSEE AND THREE BY THE REVENUE FOR THE DIFFERENT ASSESSMENT Y EARS, ARE IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -2- DIRECTED AGAINST THE ORDERS OF THE CIT(A). THESE AR E BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. IT(SS)A NO.178/AHD/2009 ASSTT.YEAR 2003-2004 (ASS ESSEES APPEAL) 2. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE A SSESSEE ARE AS UNDER: 1.1 THE ORDER PASSED BY CIT(A) ON 25.9.2009 FOR A.Y.2003-04 PARTLY CONFIRMING THE DISALLOWANCE OF I NTEREST AND DEPRECIATION MADE BY AO IS WHOLLY ILLEGAL, UNLA WFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING THE IMPUGNED DISALLOWANCES WITHOUT CONSIDERING FULLY AN D PROPERLY THE EVIDENCE PRODUCED AS WELL AS EXPLANATI ON OFFERED. 3. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NAT URE, NEEDS NO ADJUDICATION. 4. THE GROUND NO.2.1 IS AS UNDER: 2.1 THE PROCEEDINGS INITIATED U/S.153A(B) BY AO FO R A.Y.2002-03 ARE WHOLLY ILLEGAL, UNLAWFUL AND WITHOU T JURISDICTION. 5. THIS GROUND OF THE APPEAL IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE, AND IS ACCORDINGLY DISMIS SED. 6. THE GROUND NO.3.1 AND 3.2 OF THE ASSESSEES APPE AL ARE AS UNDER: IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -3- 3.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/ OR ON FACTS IN UPHOLDING THAT THE VEHICLE WERE NOT USED F OR RUNNING THEM ON HIRE AND HENCE DEPRECIATION @ 40% W AS NOT ADMISSIBLE. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THAT THE VEHICLE S WERE NOT USED FOR RUNNING THEM ON HIRE SO THAT DEPRECIAT ION @ 40% WAS NOT ADMISSIBLE 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS ENTITLED TO HIGHER RATE OF DEPRECIATION AT 40% ON ITS TRUCKS AND JCBS, AS IT WAS BEING USED FOR RUNNING T HEM ON HIRE ALSO DURING THE DULL PERIOD OF BUSINESS OF ROAD CON STRUCTION OF THE ASSESSEE. HE REFERRED TO THE DETAILED ACCOUNT OF T HE CARTING INCOME OF THE ASSESSEE, AS APPEARING IN ITS LEDGER ACCOUNT, WHEREIN THE ASSESSEE HAS CHARGED CARTING INCOME ON VARIOUS TRIPS MADE BY IT ON BEHALF OF OTHERS, AND COMPLETE DETAIL S OF THE PARTIES TO WHOM THE VEHICLES WERE GIVEN ON HIRE HAS BEEN DE TAILED THEREIN. HE SUBMITTED THAT NO DISCREPANCY COULD BE POINTED OUT ON BEHALF OF THE REVENUE IN THE DETAILS OF CARTING INCOME ACCOUNT IN THE LEDGER OF THE ASSESSEE BY THE REVENUE. 8. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF TH E LEARNED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT THE CIT (A) HAS PASSED WELL REASONED ORDER ON THIS ISSUE. HE SUBMITTED TH AT ALTHOUGH THE ASSESSEE HAS EARNED AND DECLARED CARTING RECEIPT FR OM THE SAID VEHICLES, BUT CIT(A) HAS RECORDED THAT THE ASSESSEE HAS NOT SPECIFIED THE VEHICLES, WHICH WERE LEASED OUT AND W HAT WERE THE IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -4- TERMS AND CONDITIONS OF THE LEASE AGREEMENT. HE SU BMITTED THAT IN THE ABSENCE OF EVIDENCE AND DETAILS, THE AO WAS JUSTIFIED IN REFUSING TO GIVE EXTRA DEPRECIATION TO THE ASSESSEE , AND NORMAL DEPRECIATION WAS ALLOWED TO THE ASSESSEE. HE RELIE D ON THE DECISION OF THE HONBLE APEX COURT IN CIT VS. GUPTA GLOBAL EXIM (P) LTD., 305 ITR 132 (SC) REFERRED BY THE CIT (A) IN HIS ORDER. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND ALS O THE DETAILS OF ACCOUNT OF CARTING INCOME, AS APPEARED IN THE LE DGER ACCOUNT OF THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS DECL ARED CARTING INCOME OF RS.15,66,343/- DURING THE YEAR. THE CAS E OF THE ASSESSEE IS THAT IT WAS GIVING ITS TRUCKS AND JCBS ON HIRE TO VARIOUS PARTIES AND COMPLETE DETAILS THEREOF ALONG WITH NAMES AND ADDRESSES OF THE PARTIES FROM WHOM THE CARTING INCOME WAS EARNED, AND DETAILS OF THE TRIPS MADE BY THE VEHICL ES, RATE AT WHICH THE INCOME WAS EARNED BY THE ASSESSEE, HAS BEEN REC ORDED IN THE ACCOUNT BOOK OF THE ASSESSEE, A COPY OF WHICH HAS B EEN FILED IN THE COMPILATION BEFORE THE TRIBUNAL. WE FIND THAT THE REVENUE COULD NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE THAT IT HAS, IN FACT, GIVEN ITS VEHICLES TO VARIOUS PARTIES DURING THE RELEVANT ACCOUNTING PERIOD ON HIRE, AND HAS DECLARED INCOME THEREOF. MERELY BECAUSE, THERE WAS NO SEPARATE LEASE AGREEME NT WITH VARIOUS PARTIES, IS NOT DECISIVE OF THE ISSUE. THE VEHICLES WERE IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -5- GIVEN TO VARIOUS PARTIES ON PER TRIP BASIS, AND THE REFORE, SEPARATE AGREEMENT FOR CARTING INCOME FOR EACH TRIP WITH VAR IOUS PARTIES IS NOT PRACTICABLE TO BE EXECUTED AND PRODUCED BEFORE THE REVENUE AUTHORITIES. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO HIGHER DEPRECIATION AT THE RATE OF 40%, AND ACCORDINGLY, THE GROUNDS OF THE APPEAL NO.3.1 A ND 3.2 OF THE ASSESSEE ARE ALLOWED. IT(SS)A NO.179/AHD/2009 ASSTT.YEAR 2004-2005 (ASS ESSEES APPEAL) 10. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1.1 THE ORDER PASSED BY CIT(A) ON 25.9.2009 FOR A.Y.2004-05 PARTLY CONFIRMING THE DISALLOWANCE OF B AD DEBTS AND ADDITION OF RS.19,42,771/- IN RESPECT OF SEIZED DIARY AS MADE BY THE AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING THE IMPUGNED DISALLOWANCES/ADDITIONS WITHOUT CONSIDERIN G FULLY AND PROPERLY THE EVIDENCE PRODUCED AS WELL AS EXPLANATION OFFERED. 11. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. 12. THE GROUNDS NO.2.1 AND 2.2 READ AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G FOLLOWING ADDITIONS/DISALLOWANCES. IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -6- (A) BAD DEBTS DISALLOWANCE RS.13,36,532/- (B) UNDISCLOSED INCOME (SEIZED DIARY ANNX A/1-6) RS.19,42,771/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE MAD E ABOVE SAID DISALLOWANCE/ADDITIONS. 13. THESE GROUNDS OF THE APPEAL OF THE ASSESSEE CON SIST OF TWO PARTS. FIRSTLY, THE CLAIM OF BAD DEBTS DISALLOWED BY THE AO AMOUNTING TO RS.13,36,532/-. THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE APEX COUR T IN THE CASE OF T.R.F. LTD. VS. CIT, 323 ITR 397 (SC). THE LEAR NED DR SUBMITTED THAT THE ASSESSEE HAS NOT MADE THIS CLAIM AT THE TIME OF FILING OF THE ORIGINAL RETURN, AND HAS MADE THE CLA IM FOR THE FIRST TIME AFTER THE SEARCH WAS MADE IN THE PREMISES OF T HE ASSESSEE, AND THEREFORE, THE CLAIM OF THE ASSESSEE IS NOT ENT ERTAINABLE, AND RIGHTLY REJECTED BY THE REVENUE AUTHORITIES. 14. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT ADM ITTEDLY, THIS CLAIM WAS NOT MADE BY THE ASSESSEE AT THE TIME OF O RIGINAL ASSESSMENT, AND THEREFORE, THERE IS NO JUSTIFICATIO N FOR MAKING THIS CLAIM AFTER THE SEARCH OPERATION CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE. ACCORDINGLY, THE CLAIM O F THE ASSESSEE IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -7- IS REJECTED, AND THE GROUND OF THE APPEAL OF THE AS SESSEE ON THIS ISSUE IS DISMISSED. THE OTHER ISSUE IS REGARDING THE ADDITION OF RS.19. 42 LAKHS AS UNDISCLOSED INCOME ON ACCOUNT OF SEIZED DIARY. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PEAK OF CREDIT AND DEBIT ENTRIES FROM THE SEIZED PAPERS COMES TO RS.14 ,35,666/- AND THE CIT(A) HAS FURTHER MADE ADDITION OF NET PROFIT AT THE RATE OF 5% OF THE GROSS RECEIPTS IN THE SEIZED PAPER, AND W ORKED OUT THE ADDITION AT RS.19,42,771/-. HE SUBMITTED THAT THER E IS NO JUSTIFICATION FOR ADDITION SUSTAINED BY THE LEARNED CIT(A). THE LEARNED DR SUBMITTED THAT WHOLE OF THE RECEIPTS WAS RIGHTLY TAXED BY THE AO, AND CIT(A) WAS NOT JUSTIFIED IN RESTRICT ING THE SAME TO RS.19,42,771/-. 15. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE PEAK AMOUNT OF CREDIT AND DEBIT ENTRIES ON THE SEIZED PAPERS AM OUNTING TO RS.14,35,666/- COULD BE VALIDITY TAXED IN THE HANDS OF THE ASSESSEE. IN OUR VIEW, THERE IS NO JUSTIFICATION F OR FURTHER ADDING NET PROFIT AT THE RATE OF 5% ON THE GROSS RECEIPTS ON THE SEIZED PAPERS OF THE ASSESSEE. THERE IS ALSO NO JUSTIFICA TION FOR THE AO TO ADD THE ENTIRE RECEIPTS SIDE OF THESE SEIZED PAP ER, AND NOT CONSIDERING THE PEAK OF THE CREDIT AND DEBIT ENTRIE S. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE ADDITION SHOULD BE SUSTAINED TO THE EXTENT OF RS.14,35,666/- AS AGAINST RS.19,42,771/- SUSTAINED BY IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -8- THE LEARNED CIT(A), AND THE GROUND OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED TO THIS EXTENT. IT(SS)A NO.180/AHD/2009 ASSTT.YEAR 2005-2006 (ASS ESSEES APPEAL) 16. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1.1 THE ORDER PASSED BY CIT(A) ON 25.9.2009 FOR A.Y.2005-06 PARTLY CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.2,14,938/- AND ADDITION OF RS.12,43,447/- IN RESPECT OF SEIZED DIARY AS MADE B Y AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING THE IMPUGNED DISALLOWANCES WITHOUT CONSIDERING FULLY AN D PROPERLY THE EVIDENCE PRODUCED AS WELL AS EXPLANATI ON OFFERED. 17. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. 18. THE GROUNDS NO.2.1 AND 2.2 READ AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G FOLLOWING ADDITIONS/DISALLOWANCES. (A) DEPRECIATION RS.2,14,938/- (B) UNDISCLOSED INCOME (SEIZED DIARY ANNX A/1-6) RS.12,43,447/- IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -9- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE MAD E ABOVE SAID DISALLOWANCE/ADDITIONS. 19. THESE GROUNDS OF THE APPEAL OF THE ASSESSEE CON SISTS OF TWO PARTS. FIRST PART IS REGARDING CLAIM OF HIGHER DEP RECIATION OF RS.2,14,938/-. BOTH PARTIES BEFORE US SUBMITTED TH AT THE ISSUE IS IDENTICAL WITH THE ISSUE IN THE ASSESSEES APPEAL F OR THE EARLIER ASSESSMENT YEAR 2003-2004, IN IT(SS)A NO.178/AHD/20 09. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF OUR DECISION IN THE FOREGOING PARAS OF THIS ORDER WHILE DISPOSING OF TH E APPEAL OF THE ASSESSEE IT(SS)A.NO.178/AHD/2009 FOR THE ASSTT.YEAR 2003-2004, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND NO.2.1 WITH REGARD TO DEPRECIATION CLAIM OF RS.2,14 ,938/- IS ALLOWED. 20. THE SECOND PART OF THIS GROUND OF THE APPEAL IS REGARDING THE ADDITION OF UNDISCLOSED INCOME ON ACCOUNT OF SE IZED DIARY AMOUNTING TO RS.12,43,447/-. BOTH THE PARTIES BEFO RE US SUBMITTED THAT THE ISSUE IN THIS GROUND OF THE APPE AL IS IDENTICAL WITH THE ISSUE IN THE GROUND OF THE APPEAL OF THE A SSESSEE FOR THE EARLIER ASSESSMENT YEAR 2004-2005 IN IT(SS)A.NO.179 /AHD/2009 AND PEAK OF DEBIT AND CREDIT ENTRIES ON SEIZED PAPE RS COMES TO RS.6,70,742/-. WE HAVE CONSIDERED RIVAL SUBMISSION S. IN VIEW OF OUR DECISION WHILE DISPOSING OF THIS ISSUE IN THE A SSESSEES APPEAL FOR EARLIER ASSTT.YEAR 2004-2005 IN IT(SS)A.NO.179/ AHD/2009, WE DIRECT TO RESTRICT THIS ADDITION ON THIS COUNT T O THE PEAK AMOUNT IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -10- OF THE DEBIT AND CREDIT ENTRIES OF THE SEIZED PAPER S AT RS.6,70,742/- AS AGAINST RS.12,43,447/- SUSTAINED B Y THE LEARNED CIT(A), AND THE GROUND OF THE APPEAL OF THE ASSESSE E IS PARTLY ALLOWED. IT(SS)A NO.181/AHD/2009 ASSTT.YEAR 2006-2007 (ASS ESSEES APPEAL) 21. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1.1 THE ORDER PASSED BY CIT(A) ON 25.9.2009 FOR A.Y.2006-07 PARTLY CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.1,35,294/- AND ADDITION OF RS.8, 51,182/- IN RESPECT OF SEIZED DIARY AND EXCESS CLAIM OF RS.2 ,24,982/- AS MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAIN ST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING THE IMPUGNED DISALLOWANCES WITHOUT CONSIDERING FULLY AN D PROPERLY THE EVIDENCE PRODUCED AS WELL AS EXPLANATI ON OFFERED. 22. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. 23. THE GROUNDS NO.2.1 AND 2.2 READ AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G FOLLOWING ADDITIONS/DISALLOWANCES. (A) EXCESS CLAIM OF UJJAIN DIVISION RS.2,24,982/- (B) EXCESS DEPRECIATION ON VEHICLES RS.1,35,294/- IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -11- (B) UNRECORDED RECEIPT (SEIZED DIARY ANNX A1/-6) RS.8,51,182/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE MAD E ABOVE SAID DISALLOWANCE/ADDITIONS. 24. THESE GROUNDS OF THE APPEAL OF THE ASSESSEE CON SISTS OF THREE PARTS. FIRST PART IS REGARDING EXCESS CLAIM OF UJJAIN DIVISION OF RS.2,24,982/-. THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THIS IS THE BUSINESS LOSS OF THE ASSESSEE, AND THEREFORE, ALLOWABLE. THE LEARNED DR HAS OPPOSED THE SUBMISSI ONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). WE HAVE CONSIDERED RIVAL SUBMIS SIONS. WE FIND THAT THE ASSESSEE HAS CLAIMED A LOSS OF RS.13. 23 LAKHS IN ITS UJJAIN DIVISION WITH REGARD TO THE WORK DONE FOR RO AD CONSTRUCTION, WHEREAS THE EXACT AMOUNT OF LOSS DETE RMINED BY THE PWD WAS FOR RS.10,98,087/-. THE DIFFERENCE WAS CLA IMED BY THE ASSESSEE AS BUSINESS LOSS. IN OUR VIEW, THE ACTUAL LOSS BEING RS.10,98,087/-, THE BALANCE LOSS OF RS.2,24,982/- W AS RIGHTLY DISALLOWED AND THE ISSUE IS ACCORDINGLY DECIDED AGA INST THE ASSESSEE. THE SECOND ISSUE IN THIS GROUND IS REGARDING EXCES S DEPRECIATION ON VEHICLES. BOTH PARTIES SUBMITTED B EFORE US THAT THE ISSUE IS IDENTICAL WITH THE ISSUE IN THE APPEAL OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR 2003-2004. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF OUR DECISION IN THE FOREGOING PARAS IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -12- OF THIS ORDER IN IT(SS)A.NO.178/AHD/2009 FOR A.Y.20 03-2004, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE, AND THE DEPRECIATION ON VEHICLE OF RS.1,35,294/- IS ALLOWED. THE THIRD ISSUE IS REGARDING UNRECORDED RECEIPT FO UND IN THE SEIZED DIARIES AND THE ADDITION MADE OF RS.8,51,182 /-. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE ISSUE IS IDENT ICAL WITH THE ISSUE IN THE ASSESSEES APPEAL FOR THE EARLIER ASSE SSMENT YEAR 2004-2005. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF OUR DECISION IN THE FOREGOING PARAS OF THIS ORDER, WHILE DISPOSING OF ASSESSEES APPEAL FOR THE EARLIER ASSESSMENT YEA R 2004-2005 IN IT(SS)A.NO.179/AHD/2009, THE ADDITION IS RESTRICTED TO THE ADMITTED FIGURE OF PEAK OF CREDIT AND DEBIT ENTRIE S ON THE SEIZED PAPERS OF RS.5,76,707/- AS AGAINST RS.8,51,182/- S USTAINED BY THE LEARNED CIT(A), AND THE GROUND OF THE APPEAL OF THE ASSESSEE WITH REGARD TO THIS ISSUE IS PARTLY ALLOWED. IT(SS)A NO.182/AHD/2009 ASSTT.YEAR 2007-2008 (ASS ESSEES APPEAL) 25. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1.1 THE ORDER PASSED BY CIT(A) ON 25.9.2009 FOR A.Y.2007-08 PARTLY CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.58,033/- AND EXCESS CLAIM OF RS.1,25,442/- AS MADE BY AO IS WHOLLY ILLEGAL, UNLA WFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -13- 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING THE IMPUGNED DISALLOWANCES WITHOUT CONSIDERING FULLY AN D PROPERLY THE EVIDENCE PRODUCED AS WELL AS EXPLANATI ON OFFERED. 26. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. 27. THE GROUNDS NO.2.1 AND 2.2 READ AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G FOLLOWING ADDITIONS/DISALLOWANCES. (B) EXCESS DEPRECIATION ON VEHICLES RS.58,033/- (B) EXCESS CLAIM OF LOSS RS.1,25,442/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE MAD E ABOVE SAID DISALLOWANCE/ADDITIONS. 28. THESE GROUNDS OF THE APPEAL HAVE TWO PARTS. TH E FIRST IS REGARDING EXCESS CLAIM OF DEPRECIATION ON VEHICLES OF RS.58,033/- . BOTH PARTIES SUBMITTED BEFORE US THAT THE ISSUE IS IDENTICAL WITH THE ISSUE IN THE APPEAL OF THE ASSESSEE FOR THE EAR LIER ASSESSMENT YEAR 2003-2004. WE HAVE CONSIDERED RIVAL SUBMISSIO NS. IN VIEW OF OUR DECISION IN THE FOREGOING PARAS OF THIS ORDE R IN IT(SS)A.NO.178/AHD/2009 FOR A.Y.2003-2004, THE ISSU E IS DECIDED IN FAVOUR OF THE ASSESSEE, AND THE DEPRECIA TION ON VEHICLE OF RS.58,033/- IS ALLOWED. IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -14- THE OTHER ISSUE IS REGARDING THE CLAIM OF THE ASSE SSEE WITH REGARD TO THE EXCESS LOSS OF RS.1,25,442/-. WE HAV E HEARD BOTH THE PARTIES. WE FIND THAT THE ISSUE IS IDENTICAL W ITH THE GROUND OF THE APPEAL OF THE ASSESSEE IN THE EARLIER ASSESSMEN T YEAR 2006- 2007. FOR THE REASONS RECORDED WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE IN THE FOREGOING PARAS OF THIS ORDER F OR A.Y.2006- 2007 IN IT(SS)A.NO.181/AHD/2009, WE FIND THAT THE L OSS ON ACCOUNT OF ACCEPTANCE OF LESSER CLAIM BY THE PWD AU THORITIES IS NOT ALLOWABLE AS BUSINESS LOSS OF THE ASSESSEE, AND ACCORDINGLY, THE LOSS OF RS.1,25,442/- IS NOT ALLOWED. IT(SS)A.NO.73, 74 AND 75/AHD/2010 FOR A.Y.2004-2005 , 2005- 2006 AND 2006-2007 (REVENUES APPEALS) 29. THE LEARNED DR SUBMITTED THAT THE GROUNDS OF TH E APPEALS OF THE REVENUE ARE IDENTICAL IN ALL THESE THREE YEA RS AS UNDER: I) THE LD.CIT(A) HAS ERRED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING FOR A.Y.2004-2005 ADDITION OF RS.19,13,177/- ON ACC OUNT OF UNDISCLOSED INCOME INSTEAD OF ADDITION MADE RS.1,01,42,101/- FOR A.Y.2005-2006 ADDITION OF RS.1,27,13,285/- TO T HE EXTENT OF RS.12,43,477/- ON ACCOUNT OF UNDISCLOSED INCOME. FOR A.Y.2006-2007 ADDITION OF RS.54,89,466/- TO THE EXTENT OF RS.8,51,182/- ON ACCOUNT OF UNDISCLOSED INCOME. 30. BOTH PARTIES BEFORE US SUBMITTED THAT THE ISSUE OF ADDITION ON ACCOUNT OF ENTRIES ON SEIZED PAPERS/DIARY IN THE SE APPEALS OF IT(SS)A NO.178 TO 182/AHD/2009 AND 3 OTHERS (M/S.TIRUPATI CONSTRUCTION CO. VS. ACIT, BARODA) -15- THE REVENUE IS COVERED AND CONNECTED WITH THE ISSUE IN THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2004-2005 . WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF OUR DECIS ION WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE IN APPEAL F OR A.Y.2004- 2005 IN IT(SS)A.NO.179/AHD/2009, WE HOLD THAT THE O NLY PEAK OF DEBIT AND CREDIT ENTRIES OF THE SEIZED PAPERS/DIARY COULD BE ASSESSED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE, AND THERE WAS NO JUSTIFICATION FOR ADDING THE ENTIRE RE CEIPT SIDE OF THE SEIZED PAPERS, AND ACCORDINGLY, THERE IS NO MERIT I N THE GROUNDS OF THE APPEAL OF THE REVENUE WITH REGARD TO THIS ISSUE , AND ARE ACCORDINGLY, DISMISSED. 31. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THREE APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD