Shri Vijaykumar Kantilal Shah, Bharuch V. The ACIT.,Cent.Circle-2., Baroda

ITSSA 212/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9523 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 9 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: 04-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained investment; Peak credit; Validity of assessment

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.211 TO 214/AHD/2010 [ASSTT.YEAR : 2003-2004, 2004-2005, 2005-2006 AND 2 006-2007] SHRI VIJAY KUMAR KANTILAL SHAH 3-4, BHAGYODAY ESTATE ZADESHWAR CHOKDI, BHARUCH. PAN : AJOPS 2511 D /VS. ACIT, CENT.CIR.2 BARODA. ( (( (-. -. -. -. / 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 : 10 TH OCTOBER, 2013 678 2 &(*/ DATE OF PRONOUNCEMENT : 13/11/2013 )9 / O R D E R PER BENCH : THESE FOUR APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-2004, 2004-2005, 2005-2006 AN D 2006- 2007 ARE DIRECTED AGAINST THE ORDERS OF THE LEARNED CIT(A). THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. IT(SS)A NO.211/AHD/2010 ASSTT.YEAR 2003-2004: 2. THE GROUND NO.1.1 AND 1.2 OF THE APPEAL OF THE A SSESSEE ARE AS UNDER: IT(SS)A NO.211 TO 214/AHD/2010 -2- 1.1 THE ORDER PASSED U/S.250 OF THE ACT ON 21.12.2 009 FOR A.Y.2003-04 BY CIT(A)-IV, AHMEDABAD UPHOLDING T HE VALIDITY OF ASSESSMENT AND ADDITIONS MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL 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 AND 2.2 OF THE ASSESSEES APPE ALS ARE AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/ OR ON FACTS IN UPHOLDING THE FOLLOWING ADDITIONS/DISALLOW ANCES. A) DISALLOWANCE OF INTEREST RS.26,511/- B) UNEXPLAINED INVESTMENT RS.73,340/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDITIONS/ DISALLOWANCES. 5. THESE GROUNDS OF THE APPEAL ARE WITH REGARD TO T WO ADDITIONS. THE FIRST ADDITION IS REGARDING DISALLO WANCE OF INTEREST OF RS.26,511/-. THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE DISALLOWANCE OF INTEREST WAS WRONGLY MADE AS THE AMOUNT BORROWED WAS UTILISED IN THE MIXED FUNDS WITH THE A SSESSEE, AND NO DIRECT NEXUS WAS ESTABLISHED BY THE REVENUE TO S AY THAT THE BORROWED FOUNDS WERE UTILISED IN THE CONSTRUCTION O F BUNGALOW, IT(SS)A NO.211 TO 214/AHD/2010 -3- AND WERE NOT UTILISED FOR THE PURPOSE OF BUSINESS O F THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE FUNDS WERE UTILIS ED FOR NON- BUSINESS PURPOSES I.E. FOR CONSTRUCTION OF BUNGALOW , AND THEREFORE, THE AO WAS JUSTIFIED IN DISALLOWANCE OF INTEREST. 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FI ND THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE BORROWED FUND S WERE UTILISED FOR THE PURPOSE OF BUSINESS OR FOR ANY COMMERCIAL E XPEDIENCY. IN THE FACTS OF THE CASE, WE HOLD THAT THERE IS NO MAT ERIAL BEFORE US TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A) T HAT INTEREST WAS PAID FOR THE BORROWED FUNDS WHICH WERE UTILISED FOR NON-BUSINESS PURPOSE OF THE ASSESSEE, AND ACCORDINGLY, DISALLOWA NCE MADE IS CONFIRMED AND THE GROUND NO.2.1 OF THE APPEAL WITH REGARD TO THE ISSUE OF DISALLOWANCE OF INTEREST IS DISMISSED. THE OTHER ISSUE IN THIS APPEAL OF THE ASSESSEE IS REGARDING UNEXPLAINED INVESTMENT OF RS.73,340/- IN THE CONSTR UCTION OF BUNGALOW OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SOLD OLD GOLD ORNAM ENTS FOR RS.2,06,438/- AND BILLS WERE ALSO PRODUCED. HE SUB MITTED THAT THE WIFE OF THE ASSESSEE HAS SOLD ORNAMENTS FOR RS. 1,15,313/- FOR WHICH NECESSARY BILL WAS PRODUCED BEFORE THE AO AND STILL THE BENEFIT THEREOF WAS NOT ALLOWED BY THE LEARNED CIT( A). THE LEARNED DR SUBMITTED THAT THE ASSESSEE COULD NOT ES TABLISH THAT THE AMOUNT OF SALE OF GOLD ORNAMENTS WAS UTILISED I N THE IT(SS)A NO.211 TO 214/AHD/2010 -4- CONSTRUCTION OF BUNGALOW, AND THEREFORE, NO INTERFE RENCE IN THE ORDER OF THE CIT(A) IS CALLED FOR. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE HAS PRODUCED BILLS FOR SALE OF GOLD ORNAMENTS FROM M/S. BHAVIN JEWELLERS, AHMEDABAD, EVIDENCING THE SALE OF GOLD O RNAMENTS OF RS.91,125/- BY THE ASSESSEE AND RS.1,15,313/- BY TH E WIFE OF THE ASSESSEE. THE CIT(A) HAS NOT ALLOWED THE BENEFIT O F SALE OF GOLD ORNAMENTS MADE BY THE WIFE OF THE ASSESSEE WITHOUT PLACING ANY EVIDENCE THAT THE SALE OF GOLD ORNAMENTS BY THE ASS ESSEE WAS NOT GENUINE. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, WE HOLD THAT THE ADDITION MADE OF RS.73,340/- IS COVERED WITH TH E AMOUNT OF SALE OF GOLD ORNAMENTS BY THE WIFE OF RS.1,15,313/- , AND THEREFORE, THE ADDITION OF RS.73,340/- IS DELETED, AND THE GROUND OF THE APPEAL OF THE ASSESSEE NOS.2.1 AND 2.2 TO TH IS EXTENT IS PARTLY ALLOWED. 8. THE GROUND NO.3.1 OF THE ASSESSEES APPEAL IS AS UNDER: 3.1 WITHOUT PREJUDICE AND IN THE ALTERNATIVE, THE LD.CIT(A) OUGHT TO HAVE ALLOWED BENEFIT OF THE DISCLOSURE/ADDITIONS MADE IN THE FIRM OF M/S.TIRUPA TI CONSTRUCTION CO. 9. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY CONC EDED THAT THERE IS NO ADDITION ON ACCOUNT OF PEAK OF THE CRED IT AND DEBIT ENTRIES IN THE CASE OF M/S.TIRUPATI CONSTRUCTION CO . IN THESE IT(SS)A NO.211 TO 214/AHD/2010 -5- FACTS, WE HOLD THAT THIS GROUND OF THE ASSESSEE IS WITHOUT ANY MERIT, AND IS ACCORDINGLY DISMISSED. IT(SS)A.NO.212/AHD/2010 (ASSTT.YEAR 2004-2005) 1.1 THE ORDER PASSED U/S.250 OF THE ACT ON 21.12.2 009 FOR A.Y.2004-05 BY CIT(A)-IV, AHMEDABAD UPHOLDING T HE VALIDITY OF ASSESSMENT AND ADDITIONS MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL 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. 10. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. 11. THE GROUND NO.2.1, 2.2 AND 3.1 OF THE ASSESSEE S APPEALS ARE AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/ OR ON FACTS IN UPHOLDING THE FOLLOWING ADDITIONS/DISALLOW ANCES. A) DISALLOWANCE OF INTEREST RS.1,01,812/- B) UNEXPLAINED INVESTMENT RS.5,78,818/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDITIONS/ DISALLOWANCES. 3.1 WITHOUT PREJUDICE AND IN THE ALTERNATIVE, THE LD.CIT(A) OUGHT TO HAVE ALLOWED BENEFIT OF THE DISCLOSURE/ADDITIONS MADE IN THE FIRM OF M/S.TIRUPA TI CONSTRUCTION CO. IT(SS)A NO.211 TO 214/AHD/2010 -6- 12. THESE GROUNDS OF THE APPEAL OF THE ASSESSEE CON SIST OF TWO PARTS. THE FIRST ADDITION IS REGARDING DISALLOWANC E OF INTEREST OF RS.1,01,812/-. BOTH THE PARTIES BEFORE US SUBMITTE D THAT THE ISSUE OF DISALLOWANCE OF INTEREST IS IDENTICAL WITH THE I SSUE IN THE APPEAL OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR 200 3-2004. FOR THE REASONS RECORDED WHILE DISPOSING OF THE GROUNDS OF THE APPEAL OF THE ASSESSEE WITH REGARD TO THE ISSUE OF DISALLO WANCE OF INTEREST IN THE FOREGOING PARAS OF THIS ORDER, FOR THE EARLI ER ASSESSMENT YEAR 2003-2004 IN IT(SS)A.NO.211/AHD/2010, WE DISMI SS THE GROUND OF THE ASSESSEE WITH REGARD TO THIS ISSUE. THE SECOND ISSUE IS REGARDING UNEXPLAINED INVESTME NT OF RS.5,78,818/-. THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE WAS PARTNER IN M/S.TIRUPATI CONST RUCTION COMPANY, WHEREIN THE PEAK OF UNACCOUNTED CREDIT AND DEBIT ENTRIES WAS ADDED AS INCOME IN THE HANDS OF THE FIR M, AND THEREFORE, THE ASSESSEE BEING PARTNER WITH 12% SHAR E THEREIN, IS ENTITLED TO THE TELESCOPIC BENEFIT, OUT OF THE ADDI TIONAL INCOME ASSESSED IN THE CASE OF THE FIRM IN FULL, SINCE THE ASSESSEE HAS UTILISED MAJOR PART OF THE PEAK OF CREDIT AND DEBIT ENTRIES OF THE FIRM, M/S.TIRUPATI CONSTRUCTION CO. IN THE CONSTRUC TION OF BUNGALOW, AND THIS CLAIM WAS MADE BY THE ASSESSEE R IGHT FROM STAGE OF THE ASSESSMENT. HE SUBMITTED THAT REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE EX PLANATION OF THE ASSESSEE WITH REGARD TO THE UTILISATION OF WHOL E/MAJOR PART OF IT(SS)A NO.211 TO 214/AHD/2010 -7- THE UNACCOUNTED PEAK OF THE CREDIT AND DEBIT ENTRIE S IN THE DIARY SEIZED IN THE CASE OF THE FIRM, M/S.TIRUPATI CONSTR UCTION CO. LTD. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE L EARNED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT THE ASS ESSEE HAS LEAD NO EVIDENCE TO ESTABLISH THAT IT HAS UTILISED THE A MOUNT OF PEAK CREDIT AND DEBIT ENTRIES IN THE UNACCOUNTED TRANSAC TIONS RECORDED IN THE DIARY IN THE CASE OF THE FIRM, M/S.TIRUPATI CONSTRUCTION CO. LTD., AND THEREFORE, THE ADDITION WAS RIGHTLY MADE AND NO BENEFIT OF TELESCOPING THE ADDITION IN THE CASE OF THE FIRM SHOULD BE ALLOWED TO THE ASSESSEE. 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE ITAT, AHMEDABAD BENCH VIDE ITS ORDER OF EVEN DATE I N THE CASE OF M/S.TIRUPATI CONSTRUCTION COMPANY, HAS SUSTAINED THE ADDITION OF RS.14,35,666/- REPRESENTING THE PEAK AM OUNT OF CREDIT AND DEBIT ENTRIES MENTIONED IN THE DIARY SEIZED AT THE TIME OF SEARCH. IT IS ALSO NOTED THAT THE ASSESSEE IS PART NER IN M/S.TIRUPATI CONSTRUCTION CO., WITH 12% SHARE IN THE PROFIT & LO SS ACCOUNT THEREOF. THE ASSESSEE HAS FILED AN EXPLANATION IN THIS REGARD AND HAS PLEADED THAT WHOLE/MAJOR PART OF THE PEAK AMOUN T OF CREDIT AND DEBIT ENTRIES IN THE DIARY SEIZED OF THE FIRM M /S.TIRUPATI CONSTRUCTION CO. WAS UTILISED BY THE ASSESSEE IN TH E CONSTRUCTION OF ITS BUNGALOW. WE FIND THAT THE ASSESSEE COULD N OT ESTABLISH WITH EVIDENCE. THE EXPLANATION THAT WHOLE OR MAJOR PORTION OF THE PEAK OF THE CREDIT AND DEBIT ENTRIES IN THE SEI ZED DIARY OF M/S.TIRUPATI CONSTRUCTION CO., WAS UTILISED BY THE ASSESSEE ITSELF IT(SS)A NO.211 TO 214/AHD/2010 -8- TO THE PREJUDICE OF OTHER PARTNERS. LIKEWISE, THE REVENUE ALSO COULD NOT ESTABLISH THAT THE AMOUNT OF PEAK OF CRED IT AND DEBIT ENTRIES IN THE SEIZED DIARY OF THE FIRM WAS NOT AVA ILABLE WITH THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE U NACCOUNTED AMOUNT REPRESENTING PEAK OF DEBIT AND CREDIT ENTRIE S IN THE SEIZED DIARY ULTIMATELY BELONGS TO THE PARTNERS OF THE FIR M, AND THEREFORE, ONCE THIS AMOUNT OF PEAK CREDIT IS ASSESSED TO TAX, IN THE CASE OF THE FIRM, THE TELESCOPING BENEFIT THEREOF HAS TO BE ALLOWED IN THE CASE OF THE PARTNERS. HOWEVER, IN THE ABSENCE OF E VIDENCE TO PROVE THAT THE WHOLE/MAJOR PORTION OF SUCH AMOUNT W AS UTILISED BY A SINGLE PARTNER OR TO THE CONTRARY THAT NOTHING WAS AVAILABLE OUT OF THIS AMOUNT TO A PARTICULAR PARTNER, IT SHAL L BE JUSTIFIED TO ALLOW TELESCOPING BENEFIT TO THE ASSESSEE PARTNER T O THE EXTENT OF HIS SHARE IN THE PROFIT & LOSS ACCOUNT OF THE PARTN ERSHIP FIRM, AS MENTIONED IN THE PARTNERSHIP DEED, AND THE BALANCE ADDITION BE CONFIRMED. ACCORDINGLY, ALLOWING THE TELESCOPING B ENEFIT TO THE EXTENT OF 12% OF THE PEAK AMOUNT ASSESSED IN THE CA SE OF THE FIRM, M/S.TIRUPATI CONSTRUCTION CO., AMOUNTING TO R S.14,35,666/- , WE HOLD THAT THE ASSESSEE SHOULD BE ALLOWED A REL IEF OF RS.1,72,280/- OUT OF THE UNEXPLAINED INVESTMENT OF RS.5,78,818/- AND THE BALANCE ADDITION STANDS CONFIRMED. ACCORDI NGLY, THE GROUND OF THE APPEAL NO.2.1 , 2.2 AND 3.1 OF THE AS SESSEE IS PARTLY ALLOWED. IT(SS)A.NO.213/AHD/2010 (ASSTT.YEAR 2005-2006) THE GROUND NO.1.1 & 1.2 OF THE APPEAL OF THE ASSESS EE ARE AS UNDER: IT(SS)A NO.211 TO 214/AHD/2010 -9- 1.1 THE ORDER PASSED U/S.250 OF THE ACT ON 21.12.2 009 FOR A.Y.2005-06 BY CIT(A)-IV, AHMEDABAD UPHOLDING T HE VALIDITY OF ASSESSMENT AND ADDITIONS MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL 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. 14. THESE GROUNDS OF THE APPEAL BEING GENERAL IN NA TURE, NEEDS NO ADJUDICATION. THE GROUND NO.2.1 & 2.2 AND 3.1 OF THE APPEAL OF T HE ASSESSEE ARE AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/ OR ON FACTS IN UPHOLDING THE FOLLOWING ADDITIONS/DISALLOW ANCES. A) DISALLOWANCE OF INTEREST RS.4,26,688/- B) UNEXPLAINED INVESTMENT RS.5,48,088/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDITIONS/ DISALLOWANCES. 3.1 WITHOUT PREJUDICE AND IN THE ALTERNATIVE, THE LD.CIT(A) OUGHT TO HAVE ALLOWED BENEFIT OF THE DISCLOSURE/ADDITIONS MADE IN THE FIRM OF M/S.TIRUPA TI CONSTRUCTION CO. 15. THESE GROUNDS OF THE APPEAL CONSIST OF TWO PART S. FIRSTLY, THE ISSUE IS DISALLOWANCE OF INTEREST OF RS.4,26,68 8/-. BOTH PARTIES BEFORE US SUBMITTED THAT THE FACTS OF THIS ISSUE ARE IDENTICAL TO THE FACTS IN THE ASSESSEES APPEAL FOR A.Y.2003- 2004. FOR THE REASONS RECORDED WHILE DISPOSING OF THE APPEAL FOR THE EARLIER YEAR 2003-2004 IN ITA NO.211/AHD/2010 IN THE FOREGOING P ARAS OF IT(SS)A NO.211 TO 214/AHD/2010 -10- THIS ORDER, WE DISMISS THE GROUND OF THE APPEAL OF THE ASSESSEE WITH REGARD TO DISALLOWANCE OF INTEREST OF RS.4,26, 688/-. 16. THE OTHER ISSUE IS RELATING TO UNEXPLAINED INVE STMENT OF RS.5,48,088/-. BOTH PARTIES BEFORE US SUBMITTED TH AT THE ISSUE IN THIS GROUND OF THE APPEAL OF THE ASSESSEE, WITH REG ARD TO UNEXPLAINED INVESTMENT, IS IDENTICAL WITH THE FACTS OF THE CASE OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR 2004-2 005. WE HAVE CONSIDERED RIVAL SUBMISSIONS. FOR THE REASONS RECORDED WHILE DISPOSING OF THE ASSESSEES APPEAL FOR THE EA RLIER ASSESSMENT YEAR 2004-2005 IN IT(SS)A.NO.212/AHD/201 0 IN THE FOREGOING PARAS OF THIS ORDER, WE HOLD THAT THE ASS ESSEE IS ENTITLED TO HIS PERCENTAGE IN PROFIT & LOSS ACCOUNT IN PARTN ERSHIP FIRM, VIZ. M/S.TIRUPATI CONSTRUCTION CO. AS TELESCOPIC BENEFIT OUT OF UNEXPLAINED INVESTMENT IN THE ASSESSEES CASE. WE FIND THAT THE ITAT, AHMEDABAD VIDE ORDER OF THE EVEN DATE, IN THE CASE OF M/S.TIRUPATI CONSTRUCTION COMPANY, HAS ASSESSED AND SUSTAINED THE PEAK OF THE CREDIT AND DEBIT ENTRIES IN THE SEI ZED DIARY IN THE CASE OF THE FIRM FOR THE RELEVANT ASSESSMENT YEAR A T RS.6,70,742/-. THE ASSESSEES SHARE IN THE PROFIT &LOSS ACCOUNT IS 12%, AND ACCORDINGLY, WE ALLOW TELESCOPIC BENEFIT TO THE ASS ESSEE OF THE ASSESSED PEAK IN THE CASE OF FIRM AMOUNTING TO RS.6 ,70,742/- WHICH COMES TO RS.80,490/- WHICH IS ALLOWED AS TELE SCOPING BENEFIT OUT OF THE ADDITION MADE IN THE CASE OF THE FIRM, AND ADDITION IS REDUCED BY THIS AMOUNT, AND THE BALANCE ADDITION IS IT(SS)A NO.211 TO 214/AHD/2010 -11- CONFIRMED, AND THE GROUNDS OF THE APPEAL NO.2.1, 2. 2 AND 3.1 OF THE ASSESSEE ARE PARTLY ALLOWED. IT(SS)A.NO.214/AHD/2010 (ASST.YEAR 2006-2007) THE GROUNDS OF THE APPEAL NOS.1.1 & 1.2 OF THE ASS ESSEE ARE AS UNDER: 1.1 THE ORDER PASSED U/S.250 OF THE ACT ON 21.12.2 009 FOR A.Y.2006-07 BY CIT(A)-IV, AHMEDABAD UPHOLDING T HE VALIDITY OF ASSESSMENT AND ADDITIONS MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL 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. THE GROUNDS OF THE APPEAL NOS.2.1, 2.2 & 3.1 OF TH E ASSESSEE ARE AS UNDER: 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/ OR ON FACTS IN UPHOLDING THE FOLLOWING ADDITIONS/DISALLOW ANCES. A) UNEXPLAINED INVESTMENT RS.1,63,845/- 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDITIONS/ DISALLOWANCES. IT(SS)A NO.211 TO 214/AHD/2010 -12- 3.1 WITHOUT PREJUDICE AND IN THE ALTERNATIVE, THE LD.CIT(A) OUGHT TO HAVE ALLOWED BENEFIT OF THE DISCLOSURE/ADDITIONS MADE IN THE FIRM OF M/S.TIRUPA TI CONSTRUCTION CO. 18. THE ONLY ISSUE IN THESE GROUNDS OF THE ASSESSEE IS REGARDING UNEXPLAINED INVESTMENT IN CONSTRUCTION OF BUNGALOW OF RS.1,63,845/-. BOTH THE PARTIES SUBMITTED THAT ON THIS ISSUE, THE FACTS ARE IDENTICAL WITH THE ISSUE IN THE ASSESSEE S APPEAL FOR THE EARLIER ASSESSMENT YEAR 2004-2005. FOR THE REASONS RECORDED IN THE FOREGOING PARAS OF THIS ORDER, WHILE DISPOSING OF THE ASSESSEES APPEAL, FOR THE EARLIER ASSESSMENT YEAR 2004-2005 IN IT(SS)A.NO.212/AHD/2010, WE HOLD THAT THE ASSESSEE IS ENTITLED TO TELESCOPIC BENEFIT TO THE EXTENT OF HIS SHARE IN THE PROFIT & LOSS ACCOUNT IN THE PARTNERSHIP FIRM, IN THE PEAK AMOUNT ASSESSED IN THE CASE OF THE FIRM OF RS.5,76,670/-, AND ACCORDIN GLY, THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IS RE DUCED BY RS.69,260/- OUT OF UNEXPLAINED INVESTMENT OF RS.1,6 3,845/- AND THE BALANCE ADDITION IS CONFIRMED. 19. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSE SSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT