The Dy. CIT., Central Circle-1(4), Ahmedabad V. Pinal (Piyush) B. Patel, Ahmedabad

ITSSA 284/AHD/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9543 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-02-2010
• Assessment Year: misc
• Appeal Filed On: 05-10-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N S DAYAM
• Assessee Lawyers: J P SHAH
• Keywords: Loose papers; Document seized; Opportunity of being heard; Block assessment; Documents seized
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER IT(SS)A NO.284/AHD/2004 & IT(SS)A NO.302/AHD/2004 BLOCK PERIOD FROM 1-4-1995 TO 13.12.2001 DATE OF HEARING:4.2.10 DRAFTED:5.2.10 DCIT, CENTRAL CIRCLE- 1(4), ROOM NO.305, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD PINAL (PIYUSH) B PATEL,8, PARASMANI SOCIETY, RANNA PARK, GHATLODIA, AHMEDABAD PAN NO.ABFPP3062K V/S . V/S . PINAL (PIYUSH) B PATEL, 8-PARASMANI SOCIETY, RANNAPARK, GHATLODIA, AHMEDABAD 380 061 ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI J.P. SHAH, AR REVENUE BY:- SHRI N.S. DAYAM, CIT-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE CROSS APPEALS ONE BY THE REVENUE AND OTHER BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INC OME-TAX (APPEALS)-I, AHMEDABAD IN APPEAL NO.CIT[A]-I/CC.1[]/04-05 DATED 15-07-2004. THE BLOCK ASSESSMENT WAS FRAMED BY ASSTT. COMMISSIONER OF INC OME-TAX, CENTRAL CIRCLE-1(4) AHMEDABAD U/S 158BC R.W.S. 143(3) OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 31-12-2003 FOR THE BLOCK PERIOD FROM 01-04-1995 TO 13-12-2001. IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 2 FIRST WE WILL TAKE ASSESSEEA APPEAL IT(SS)A NO.302 /AHD/2004. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF UNDISCLOSED INCOM E OF RS.5.25 LAKHS. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.1 :- 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.5,25,000/- IN AS MUCH AS THE AMOUNT PAID IS NOT AN UNDISCLOSED INCOME, THE SOURCE OF THE SAME IS PROVED AND THAT A DDITION IS NOT RELATED TO ANY PARTICULAR PREVIOUS YEAR AS MANDATOR ILY REQUIRED UNDER THE LAW. THE SAID ADDITION, THEREFORE BE DELETED. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT A SEARCH U/S.132 OF THE ACT WAS CONDUCTED ON THE ASSESSEE ALONG WITH TH E FIRM M/S.SHREEJI CORPORATION ON 13-12-2001. THE NATURE OF BUSINESS O F SHREEJI GROUP OF CONCERN IS OF CONSTRUCTION OF RESIDENTIAL FLATS, TE NEMENTS AND BUNGALOWS ETC., THE ASSESSEE HAS CONTRIBUTED TOWARDS SHARE CAPITAL IN THE FIRM M/S. SHREEJI CORPORATION AND THE PARTNERS AS ON 18-11-1997 WERE IN THE FOLLOWING RATIO:- SR. NO. NAME OF THE PERSONS SHARE IN PARTNERSHIP (%) 1 KRISHNAVADON KANJIBHAI PATEL 40 2 KALPESH B PATEL 20 3 BRIJESH N PATEL 15 4 MITESH J SHAH 10 5 PIYUSH B PATEL 7.5 6 RAVI R BHATIA 7.5 THE ASSESSEES SHARE IN THIS FIRM WAS TO THE EXTENT OF 7.5% AND LATER THE SAME WAS RAISED TO 12.5%. THE ASSESSING OFFICER NOTED F ROM THE SEIZED ANNEXURE- A/30 PAGE-16 THAT THE FIRM M/S. SHREEJI CORPORATION STARTED WIT H THE CAPITAL OF RS.70 LAKHS CONTRIBUTED BY VARIOUS PARTNERS. WHEN T HESE SEIZED DOCUMENTS WERE CONFRONTED TO THE ASSESSEE, I.E. ANNEXURE-A/30 PAGE-13, HE STATED TO IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 3 HAVE CONTRIBUTED RS.4 LAKHS TOWARDS THE PARTNERS C APITAL FOR THE INITIAL SHARE OF 7.5% AND THE ASSESSEE WAS ASKED TO EXPLAIN THE SOUR CE OF THE SAME AND HE EXPLAINED THE SOURCE OF RS.4 LAKHS AS UNDER:- 01 RS.1,00,000 FROM MY FATHER MR. BATUKBHAI PATEL 02 RS.1,00,000 FROM MY FATHER-IN-LAW, GHANSHYAMBHAI KANJIBHAI ROY 03 RS.1,00,000 FROM MY FATHERS ELDER BROTHER, AMAR SHIBHAI DAHYABHAI PATEL 04 RS.1,00,000 FROM MY UNCLE, NARSHIBHAI HARJIBHAI PATEL THE ASSESSING OFFICER WAS NOT CONVINCED BY THE REPL Y OF THE ASSESSEE AND COMPUTED THE SHARE CONTRIBUTION ARITHMETICALLY AT 7 .5% SHARE TO THE CAPITAL OF THE FIRM AT RS.70 LAKHS. ACCORDINGLY, THE ASSESSING OFFICER COMPUTED THE CAPITAL CONTRIBUTION OF THE ASSESSEE AT RS.5.25 LAK HS AND MADE ADDITION OF THE SAME AS UNDISCLOSED INCOME, AS THE ASSESSEE COULD N OT PROVE THE SOURCE. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT (A) AND CIT(A) ALMOST REPRODUCING THE CONTENTS OF THE ASSESSMENT ORDER, C ONFIRMED THE ADDITION BY GIVING FOLLOWING FINDING IN PAGE-16 :- I HAVE CAREFULLY CONSIDERED THE ENTIRE ISSUE. THE LD. AUTHORIZED REPRESENTATIVE WAS ASKED TO STATE AS TO WHETHER THE ALLEGED CAPITAL CONTRIBUTION OF RS.5.25,000/- WAS SHOWN IN THE REGU LAR BOOKS OF ACCOUNT OR NOT. IT WAS EXPLAINED THAT THESE WERE NOT SHOWN. IT IS NOTICED THAT AT THE TIME OF SEARCH THE EXPLANATION GIVEN BY THE APP ELLANT WAS ENTIRELY DIFFERENT THAN WHAT HAS BEEN GIVEN AT THE TIME OF A SSESSMENT PROCEEDINGS. IT IS ALSO NOTICED THAT THOUGH IT HAS BEEN CLAIMED NOW THAT MONEYS WERE ADVANCED BY SOME OF APPELLANTS RELATIV ES, BUT AT NO STAGE OF PROCEEDINGS, INCLUDING THE APPELLANT PROCE EDINGS ANY CONFIRMATION FROM THE ALLEGED CREDITORS WAS FILED. THUS ACCEPT FOR A MERE CLAIM THAT CERTAIN PERSONS HAD ADVANCED THESE FUNDS, THERE IS NOTHING BYWAY OF ANY CONFIRMATION TO SHOW THAT THES E PERSONS HAD ACTUALLY GIVEN THESE FUNDS AND EVEN THEIR CREDITWOR THINESS IS NOT ESTABLISHED. THERE IS NO EVIDENCE TO SHOW THAT STAT EMENT AT THE TIME OF SEARCH WAS GIVEN UNDER PRESSURE BECAUSE APPELLANT H AD HIMSELF STATED AT THAT TIME THAT SOME FUNDS WERE GIVEN TO HIM BY A FRIEND SHRI MANOJ PATEL. IT IS APPARENT THAT THIS NEW EXPLANATION IS PURELY AN AFTERTHOUGHT AS ALLEGEDLY ALL THE PERSONS ADVANCING MONEY ARE CL AIMED TO BE AGRICULTURISTS. HOWEVER, IN ABSENCE OF ANY DOCUMENT ARY EVIDENCE TO ESTABLISH THE GENUINENESS OF THESE TRANSACTIONS AND CREDITWORTHINESS OF IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 4 THE CREDITORS OF THE CREDITORS, THE EXPLANATION CAN NOT BE BELIEVED. THE ASSESSING OFFICER CANNOT BE FASTENED WITH THE LIABI LITY OF MAKING ENQUIRIES FROM THE ALLEGED CREDITORS, WHEN NOT EVEN THEIR CONFIRMATIONS WERE FILED. IN VIEW OF THE ABOVE, ADDITION OF RS.5 ,25,000/- IS CONFIRMED. AGGRIEVED, NOW ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 4. LD. COUNSEL FOR THE ASSESSEE, SHRI J.P. SHAH, FI RST OF ALL, MADE ARGUMENT THAT THE SHARE-CAPITAL INTRODUCED BY THE PARTNER IS RS.4 LAKHS AND NOT RS.5.25 LAKHS AS ADDED BY THE ASSESSING OFFICER AND CONFIRM ED BY THE CIT(A). HE FURTHER STATED THAT THERE IS NO BASIS FOR MAKING AD DITION OF UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT AS SAME IS NOT SUPPORT BY A NY SEIZED DOCUMENTS OR ANY OTHER RELATABLE EVIDENCES. HE STATED THAT THE A SSESSING OFFICER HAS ARITHMETICALLY COMPUTED THE CAPITAL CONTRIBUTION AT RS.5.25 LAKHS, WHICH HAS NO BASIS FOR MAKING THE ADDITION OF UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT. AS REGARDS TO SOURCE, LD. COUNSEL FOR THE ASSESSEE STATED THAT RS.2 LAKHS HAVE BEEN RECEIVED FROM HIS FATHER. SHRI BATUKBHAI PATEL AND ALSO FATHER-IN- LAW, SHRI GHANSHYAMBHAI KANJIBHAI ROY AND THE BALAN CE IS OUT OF THE SAVINGS AND CAPITAL ACCOUNT OF ANNAPURNA KIRANA STORES. ON THE OTHER HAND, LD. CIT- DR ARGUED THAT THIS ADDITION OF UNDISCLOSED INCOME DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS MADE ON THE BASIS OF SEIZED MATERIAL ANNEXURE-A/30 PAGE-16 WHICH IS EXPLAINED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER AND THE ASSESSEE HIMSELF ADMITTED TO HAVE INVESTED A SUM OF RS.4 LAKHS AS CAPITAL CONTRIBUTION IN THE FIRM. HE STATED THAT T HE ENTIRE ADDITION OF RS.5.25 LAKHS SHOULD BE CONFIRMED, AS THE ASSESSEES SHARE OF 7.5% IN THE TOTAL CAPITAL OF RS.70 LAKHS. ACCORDINGLY, HE URGED THE BENCH TO CONFIRM THE ORDER OF THE LOWER AUTHORITIES. 5. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE CASE RECORDS, WE FIND THAT THERE IS NO BASIS FOR MAKING ADDITION OF RS.5.25 LAKHS AS UNDISCLOSED ON ACCOUNT CAPITAL CONTRIBUTION BUT THE ASSESSEE HIMSELF AS ADMITTED THAT THERE IS ACTUAL CONTRIBUTION OF RS.4 LAKHS ONLY, WHICH IS IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 5 UNACCOUNTED. THERE IS A SEIZED PAPER ON THE BASIS OF WHICH, THE ASSESSEE ADMITTED THIS FIGURE OF RS.4 LAKHS AS CAPITAL CONTR IBUTION IN THE FIRM. AS REGARDS TO SOURCE OF THIS RS.4 LAKHS, WE AGREE WITH THE SUBMISSIONS AND EXPLANATION OF THE ASSESSEE THAT THE ASSESSEES FAT HER AND FATHER-IN-LAW BOTH HAVE ADVANCED A SUM OF RS.2 LAKHS I.E. RS.1 LAKH EA CH. AS REGARDS TO ANOTHER SOURCE OF RS.2 LAKHS OUT OF SAVINGS AND CAP ITAL OF ANNAPURNA KIRANA STORE, THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE A ND ACCORDINGLY WE CANNOT ACCEPT THE EXPLANATION OF THE ASSESSEE. ACCORDINGL Y, WE CONFIRM THE ADDITION OF RS.2 LAKHS OUT OF THE TOTAL ADDITION MADE AND CO NFIRMED BY LOWER AUTHORITIES AT RS.5.25 LAKHS. THIS ISSUE OF THE ASSESSEES APP EAL IS PARTLY ALLOWED. 6. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION RS.25,000/- ON AC COUNT OF UNACCOUNTED CASH OF RS.53,475/-. 7. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE HAS N OT PRESSED THIS ISSUE AND ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSE D. 8. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE ON ACCOUNT OF U NACCOUNTED DEPOSITS. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.3 :- THE LEARNED C.I.T. APPEALS HAS ERRED IN CONFIRMING THE ADDITION OF RS.12,31,789/- AS AN UNACCOUNTED DE[POSITS AND HAS FURTHER ERRED IN NOT WORKING OUT THE PEAK CASH AND ALSO BY REJECTING THE EVIDENCES AND EXPLANATIONS PLACED BEFORE LOWER AUTHORITIES WITHOU T EXAMINING THE RECORDS PROPERLY. 9. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSING OFFICER NOTICED FROM THE SEIZED ANNEXURE-A/30 PAGE-25 AND 28 THAT THERE ARE DEPOSITS TO THE TUNE OF RS.12.31,789/-. THE ASSESSI NG OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSIT AND THE A SSESSEE STATED THAT THERE WAS A DISPUTE AMONG THE PARTNERS AND THE OTHER PART NERS ARE TRYING TO FRAME AND THEY HAVE PLANTED THIS DOCUMENT. HE ALSO EXPLAI NED THAT THIS DOCUMENT IS IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 6 NOT IN THE HANDWRITING OF THE ASSESSEE AND IT DOES NOT BELONG TO HIM. THE AO IS NOT CONVINCED AND ACCORDINGLY HE NOTED THE FOLLO WING FACTS THAT THESE PAPERS WERE NOT FORGED DOCUMENTS AND WERE NOT PREPA RED TO INDULGE HIM. SINCE THERE WAS DISPUTE BETWEEN ASSESSEE ON ONE PAR T AND SMT. REKHABEN K PATEL AND SHRI JANAKBHAI V PATEL ON OTHER PART, HEN CE, THEY WERE NOT READY TO GIVE THOSE PAPERS TO HIM, THEREFORE HE TOOK CERTAIN LOOSE PAPERS FROM THE OFFICE TO HIS RESIDENCE WITHOUT THEIR KNOWLEDGE, ME ANTIME SEARCH WAS CONDUCTED AND THOSE PAPERS WERE FOUND AT THIS RESID ENCE. HE HAS NOT TAKEN ANY DEPOSITS, HE WAS ALSO NOT COLLECTING ANY MONEY FROM THE SITE AND THE COLLECTION WORK WAS DONE BY NAVINBHAI AND KALPESHBH AI. ACCORDINGLY, ASSESSING OFFICER MADE ADDITION OF UNDISCLOSED INCO ME OF RS.12,31,789/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY GI VING FOLLOWING FINDING IN PAGE-17 :- COMING TO THE OTHER ADDITION OF RS.12,31,789/-, IT IS SEEN THAT THE CLAIM THAT THESE DOCUMENTS WERE CREATED TO FRAME THE APPE LLANT, DOES NOT SOUND TO REASON BECAUSE ALL THESE DOCUMENTS WERE FO UND AND SEIZED FROM APPELLANTS POSSESSION. THESE DOCUMENTS SHOW, DATE-WISE DEPOSITS AND WITHDRAWALS BY THE APPELLANT. SOME OF THE ITEMS TOTALING TO RS.5,85,000/- ENTERED AT THE END OF THE RELATED DOC UMENTS ARE ON ACCOUNT OF SALARY AND INTEREST EARNED BY THE APPELL ANT AND REMAINING ITEMS ARE ON ACCOUNT OF DEPOSITS MADE BY HIM WITH T HE FIRM. THE ITEMS FOR INTEREST AND SALARY CLEARLY REPRESENT INCOME OF THE APPELLANT AND THE REMAINING DEPOSITS REMAIN UNEXPLAINED. THE PLEA THA T THE DOCUMENT IN QUESTION WAS CREATED TO FRAME THE APPELLANT IS FURT HER DISPROVED BY THE FACT THAT WITHDRAWALS INSTALLMENT FOR VEHICLE OWNED BY THE APPELLANT AND SHOWN IN HIS REGULAR RETURNS ARE ALSO ENTERED IN TH ESE DOCUMENTS AND SUCH WITHDRAWALS ARE REPRODUCED ON PAGE NO.6 OF THE ASSESSMENT ORDER. AL THESE GOES TO SHOW THAT THESE DOCUMENTS W HICH WERE SEIZED FROM THE APPELLANT DEPICT THE TRUE STATE OF AFFAIRS . IN VIEW OF THIS EVEN THE ADDITION OF RS.12,31,789/- IS CONFIRMED. 10. AFTER HEARING THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE STATED BEFORE US THAT THE ENTRIES MADE ON PAGE NO.25 AND 28 OF AN NEXURE-A/30 ARE NOT OF THE HANDWRITING OF THE ASSESSEE AND HE ALSO DID NOT CONFIRM WHO HAD WRITTEN THOSE PAPERS AND WHO HAD GIVEN THESE DEPOSITS. ACCO RDINGLY, HE ARGUED THAT IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 7 THE ASSESSING OFFICER AND CIT(A) HAS ERRED IN CONFI RMING THE ADDITION WITHOUT ASCERTAINING THE FACTS ON RECORD AND WITHOUT GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD. ALTERNATIVELY, THE LD. COUNSEL FOR TH E ASSESSEE STATED THAT IF AT ALL THESE DEPOSITS ARE TREATED AS UNACCOUNTED RECEIPT O F THE ASSESSEE THEN ADDITION SHOULD HAVE BEEN MADE BY APPLYING NET PROF IT @ 8% OF UNACCOUNTED MONEY OF RS.12,31,789/-. ON THE OTHER HAND, LD. CI T-DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE CASE RECORDS INCLUDING THE BLOCK ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT(A). WE FIND THAT THE ASSESSING OFFICER NOT GIVEN PROPER OPPORTUNITY OF BEING HEARD AS THE ASSESSEES CONTENTION IS THAT THESE PAPERS ARE NOT BELONGING TO THE ASSESSEE AND NO OPPORTUNITY HAS BEEN GIVEN TO EXPLAIN THESE DEPOSITS. THE MAIN CONTENTION OF THE ASSESSEE WAS THAT THE RELEVANT PA PERS WERE NOT CONFRONTED TO THE ASSESSEE. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS RE-EXAMINATION AT THE LEVEL OF THE ASSESSING OFFICER AFRESH AND ASSESSING OFFICER WILL PROVIDE REASONABLE OPPORTUNI TIES OF BEING HEARD AND ALSO CONSIDERED THE PEAK OF THESE DEPOSITS FOR MAKI NG ADDITIONS AND IN CASE, THE ASSESSEE IS ABLE TO GIVE A WORKING OF PEAK, THE N THE ASSESSING OFFICER WILL CONSIDER THE SAME. THE ASSESSEE IS FREE TO EXPLAIN THE DEPOSITS AFTER VERIFYING THE RECORD. IN VIEW OF THESE DIRECTIONS, THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. COMING TO REVENUES APPEAL IN IT(SS)A NO.284/AHD/20 04. 12. WE FIND THAT IN ALL THE THREE GROUNDS, THE ON-M ONEY RECEIPT AND CASH CREDITS ARE MADE ON PROTECTIVE IN THE CASE OF ASSES SEE-FIRM M/S. SHREEJI CORPORATION AND THE RELEVANT THREE GROUNDS ARE AS UNDER:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.9,12,200/- MADE IN THE CASE OF ASSES SEE ON ACCOUNT OF ON MONEY RECEIPT AND FURTHER DIRECTING THAT THIS ADDITION BE MADE ON IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 8 SUBSTANTIVE BASIS IN THE HANDS OF THE FIRM, M/S. SH REEJI CORPORATION, IN WHICH THE ASSESSEE WAS A PARTNER. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO DELETE THE ADDITION OF RS.1,75,800/- IN THE CASE OF THE ASSESS EE MADE ON ACCOUNT OF ON MONEY RECEIPTS AND FURTHER DIRECTING THAT T HIS ADDITION BE MADE ON SUBSTANTIVE BASIS, IN THE HANDS OF FIRM, M/S. SH REEJI CORPORATION, IN WHICH THE ASSESSEE WAS A PARTNER. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO DELETE THE ADDITION OF RS.2,66,000/- MADE ON PROTECTIVE BASIS ON ACCOUNT OF CASH CREDIT IN THE BANK ACCOUNT OF THE FIRM, M/S SITARAM DEVELOPERS. 13. OUT OF THE ABOVE THREE GROUNDS, THE TWO ISSUES ARE ARISING ON ACCOUNT OF ON-MONEY RECEIPT TREATED AS UNDISCLOSED INCOME A T RS.9,12,200/-, ON MONEY RECEIPTS TREATED AS UNDISCLOSED INCOME AT RS. 1,75,800/- AND ONE ISSUE OF ADDITION OF CASH CREDIT IN THE BANK ACCOUNT OF M /S SITARAM DEVELOPERS AT RS.2.66 LAKHS. THE ASSESSING OFFICER NOTED THAT AS PER ANNEXURE-A/2 PAGE 11 SEIZED FROM THE RESIDENCE OF REKHABEN PATEL, THE AS SESSEE HAS COLLECTED THIS AMOUNT OF RS.9,12,200/- FROM THE ALLOTTES OF THIS S CHEME FLOATED BY M/S.SHREEJI CORPORATION. THE ASSESSING OFFICER NOTE D FROM PAGE-11 OF THE SEIZED DOCUMENT THE FIGURATIVE DESCRIPTION, THE AO ALSO NOTED THAT THE ASSESSEE HAS ACCEPTED ON-MONEY ON BEHALF OF M/S. SH REEJI CORPORATION WHERE THE ASSESSEE IS A PARTNER. SUBSEQUENTLY, THE AO ALSO NOTED FROM THE PERUSAL OF PAGE-31-32 OF ANNEXURE/A-35 SEIZED FROM THE RESIDENCE OF THE ASSESSEE THAT THE AMOUNT OF RS.7,44,800/- WAS TAKEN DIRECTLY BY THE ASSESSEE AND NOT DEPOSITED IN THE ACCOUNT OF ASSESSEE-FIRM. THE AO NOTED THE FIGURATIVE DESCRIPTION FROM PAGE-30-32 AND ALSO NOT ED THAT THE ASSESSEE HAS ACCEPTED THE ON-MONEY ON BEHALF OF M/S. SHREEJI COR PORATION AND ACCORDINGLY MADE ADDITION OF RS.9,12,200/- AND RS.1,75,800/-. A S REGARDS TO DEPOSIT IN THE BANK ACCOUNT OF THE FIRM M/S. SITARAM DEVELOPERS. T HE AO MADE ADDITION IN HAND OF THE ASSESSEE AS HE COULD NOT GIVE INCOME-TA X PARTICULARS OF OTHER PARTNERS AND THE FIRM. AGGRIEVED, ON THE ABOVE THRE E ISSUE, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) DELETED THE ABOVE THREE ADDITION BY GIVING FOLLOWING FINDING IN PAGE-25 & 26 :- IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 9 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. I FIN D THAT AS PER THE STATEMENT RECORDED AT THE TIME OF SEARCH, IT WAS AP PARENT THAT PARTNERS WERE AUTHORIZED TO COLLECT MONEY FROM VARIOUS BUYER S. THUS WHATEVER MONEY WAS COLLECTED, IN FACT, REPRESENTED INCOME OF THE FIRM M/S. SHREEJI CORPORATION. THIS FACT IS ALSO CLEAR FROM N ARRATION GIVEN AGAINST PAGE NO. 30 & 32 AS REPRODUCED IN PARA 5.1 ON PAGE 12 OF THE ASSESSMENT ORDER, WHERE THE AMOUNT NOT CREDITED IN FIRMS ACCOUNT HAS BEEN TREATED AS APPELLANTS WITHDRAWAL AND EVEN INT EREST ON THAT HAS BEEN WORKED OUT. THIS ITSELF SHOWS THAT IN FACT, TH ESE ENTRIES OF ON- MONEY AS WELL AS INTEREST, IS INCOME OF THE FIRM AN D NOT THAT OF THE APPELLANT. THIS ADDITION IS, THEREFORE, REQUIRED TO BE MADE IN THE HANDS OF THE FIRM M/S. SHREEJI CORPORATION, WHICH IS THE REAL OWNER OF THE INCOME. I ALSO FIND THAT THIS ADDITION HAS ALREADY BEEN MADE IN THE HANDS OF THE FIRM ON PROTECTIVE BASIS. AS THE INCOM E RIGHTFULLY BELONGS TO THE FIRM, HENCE THESE ADDITIONS ARE DIRECTED TO BE DELETED AND ADDITION IN FIRMS CASE WILL AUTOMATICALLY BE TAXED ON SUBST ANTIVE BASIS. THUS ADDITIONS OF RS.9,12,200/- AND RS.1,75,800/- ARE DE LETED FROM APPELLANTS HANDS. I FIND FROM THE CASE RECORDS THAT VIDE LETTER DATED 11/12/2003M APPELLANT HAD FURNISHED ADDRESSES OF PARTNERS OF THE FIRM M/S . SITARAM DEVELOPERS AND ALSO COPY OF ITS BANK ACCOUNT. NON F URNISHING OF INCOME TAX PARTICULARS OF PARTNERS IS NO REASON FOR TAXIIN G THIS ACCOUNT IN APPELLANTS HAND WHEN THE BANK ACCOUNT ITSELF IS IN THE NAME OF THE FIRM M/S. SITARAM DEVELOPERS. THIS PROTECTIVE ADDITION I S, THEREFORE, DELETED AND THE ASSESSING OFFICER MAY TAKE APPROPRIATE ACTI ON IN THE HANDS OF THE FIRM M/S. SITARAM DEVELOPERS. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 14. LD. CIT-DR RELIED ON THE BLOCK ASSESSMENT ORDER . ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF CIT(A). HAVING HEARD THE RIVAL CONTENTIONS AND GOING THROUGH THE CASE RECORD S, WE FIND THAT THE CIT(A) HAS DELETED THE ADDITION ONLY ON ONE PREMISE ON ALL THREE ISSUES THAT THE ON- MONEY ON THE FIRST TWO ISSUES RELATE TO THE FIRM M/ S. SHREEJI CORPORATION AS THE ASSESSING OFFICER HAS ALREADY MADE ADDITION IN THE HAND OF THE FIRM ON PROTECTIVE BASIS. THE CIT(A) HELD THAT THE INCOME R IGHTFULLY BELONGS TO THE FIRM AND DELETION IN THE HANDS OF THE ASSESSEE. AS REGA RDS TO DEPOSITS IN THE BANK ACCOUNT OF THE FIRM M/S.SITARAM DEVELOPERS, THE CIT (A) DIRECTED THE ASSESSING OFFICER TO MAKE APPROPRIATE ADDITION IN THE HANDS O F THE FIRM M/S. SITARAM IT(SS)A NO.284 & 302/AHD/2004 B.P. 1/4/95 TO 13/12/01 PINAL (PIYUSH) B PATEL V. DCIT CC-1(4) ABD PAGE 10 DEVELOPERS AS THIS IS A PROTECTIVE ADDITION IN THE CASE OF THE ASSESSEE AND DELETED THIS ADDITION. AS THE CIT(A) HAS GIVEN A DI RECTION FOR DELETING THE ADDITION HERE AND TO MAKE SUBSTANTIAL ADDITION IN T HE HANDS OF THE FIRM M/S. SHREEJI CORPORATION AND M/S. SITARAM DEVELOPERS. WE FIND NO INFIRMITY BUT AS REGARDS TO FIRM M/S. SHREEJI CORPORATION, THE TRIBU NAL IN IT(SS)A NO.179/AHD/2004 DATED 01-06-2007 HAS ALREADY DISMISSED THE ASSESSE ES APPEAL AND IT IS INFORMED BY THE LD. COUNSEL FOR TH E ASSESSEE AS WELL AS LD. CIT-DR THAT NO FURTHER ACTION HAS BEEN TAKEN EITHER BY THE ASSESSEE OR REVENUE IN THIS CASE. ACCORDINGLY, REVENUE IS DIREC TED TO TREAT THIS ADDITION AS SUBSTANTIAL IN THE CASE OF M/S. SHREEJI CORPORAT ION AND NOT IN THE CASE OF THE ASSESSEE. THIS ADDITION IS DELETED AND THE ORDE R OF CIT(A) ON THIS ISSUE IS CONFIRMED AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED AND TH AT OF ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11/ 02/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED :11/02/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-I, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD