The DCIT, Central Circle-2(1), Ahmedabad V. Shri Ashwin B.Patel, Ahmedabad

ITSSA 314/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9379 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 13-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KALYAN
• Assessee Lawyers: S N DIVETIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO. 314/AHD/2010 ASSESSMENT YEAR :2001-02 D.C.I.T., CENTRAL CIRCLE 2(1), AHMADABAD. V/S . SHRI ASHWIN B PATEL, 23 JAY BHIMNATH SOC., OPP. SAMRATNAGAR N. HIGHWAY, ISANPUR, AHMEDABAD. PAN NO. A MUPP8265A (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI D. S. KALYAN, CIT D.R. /BY RESPONDENT SHRI S. N. DIVETIA, A.R. /DATE OF HEARING 25.07.2013 /DATE OF PRONOUNCEMENT 19.09.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-III, AHMEDABAD, DATED 06.0 1.2010 FOR ASSESSMENT YEAR 2001-02. THE EFFECTIVE GROUND OF REVENUES AP PEAL IS THAT LD. CIT(A) DELETED THE ADDITION OF RS.17,06,050/- BEING OPENIN G CASH BALANCE AS ON 01- 04-2000 TREATING UNDISCLOSED INCOME OF THE ASSESSEE . 2. THE ASSESSEE WHILE DRIVING HIS CAR WAS INTERCEPT ED BY THE POLICE AUTHORITIES ON 25.11.2006 WHEREIN HE WAS FOUND IN P OSSESSION OF CASH AMOUNTING TO RS.20 LACS. LATER ON THE SAID CASH WA S TAKEN INTO POSSESSION FROM THE POLICE AUTHORITIES ON 25.01.2007 UNDER WAR RANT OF AUTHORIZATION U/S. 132A OF THE IT ACT, AS PER DIRECTIONS OF METROPOLIT AN MAGISTRATE, AHMADABAD DATED 18.01.2007. A NOTICE U/S. 153A(A) OF THE IT ACT WAS ISSUED BY THE A.O. IT(SS)A NO. 314/AHD/10 A.Y. 01-02 PAGE 2 TO THE ASSESSEE TO FILE RETURN. THE ASSESSEE FILED THE RETURN. IT WAS FOUND IN CAPITAL ACCOUNT AND BALANCE SHEET AS ON 31.03.2001 AS UNDER: STATEMENT OF INCOME FOR THE YEAR:2000-2001 INCOME RECEIVED FROM MISC. COMMISSION 43710 AGRICULTURE INCOME 128179 TOTAL TAXABLE INCOME 171889 LESS : AGRICULTURE INCOME EXEMPT U/S.10(1) 128179 NET TAXABLE INCOME 43710 TAX PAYABLE NIL TAX PAID NIL ASHWINBHAI BHAGVANBHAI PATEL CAPITAL A/C. 2000-2001 PARTICULARS AMOUNT PARTICULARS AMOUNT TO WITHDRAWALS 41500.00 BY BALANCE B/F. 1706050.00 TO BALANCE C/F. 1836439.00 BY AGRICULTURE INCOME 128179.00 BY MISC. COMMISSION INCOME 43710.00 1877939.00 1877939.00 BALANCE SHEET AS ON 31/03/2001 LIABILITIES AMOUNT ASSETS AMOUNT CAPITAL ACCOUNT ASHWINBHAI BHAGVANBHAI PATEL . 1836439.00 FIXED ASSETS INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES CASH & BANK BALANCE 1836439.00 1836439.00 1836439.00 THE A.O. GAVE THE DETAILED QUESTIONNAIRE ON VARIOUS ASPECTS WHICH WERE RESPONDED BY THE ASSESSEE. IT WAS SEEN THAT IN CAP ITAL ACCOUNT 2000-01 ATTACHED TO THE RETURN OF INCOME THAT ASSESSEES OP ENING CAPITAL AS ON 01.04.2000 AT RS.17,06,050/- AND CLOSING CAPITAL ON 31.03.2001 OF RS.18,36,439/- HAD BEEN SHOWN AS CASH AND BANK BALA NCE. THE A.O. OBSERVED THAT IN THIS POST SEARCH INQUIRY ASSESSEE S STATEMENT WAS RECORDED ON OATH ON 05.12.2006 WHEREIN IN RESPONSE TO QUESTI ON NO.6, HE HAD STATED THAT HE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT FOR THE BUSINESS ACTIVITY, NOR HE HAD OPENED ANY BANK ACCOUNT. IN QUESTION NO.3, HE HAD STATED THAT HE IS IT(SS)A NO. 314/AHD/10 A.Y. 01-02 PAGE 3 PROPRIETOR OF AMARJYOT ENTERPRISE DEALING IN IRON S CRAP AND IRON ORE. HE WAS PREVIOUSLY SERVING WITH DURGESHWARI INDUSTRIES LOCA TED AT REVABHAI ESTATE, CTM CHAR RASTA, AHMADABAD AND ALSO DOING BUSINESS IN SALE AND PURCHASE OF IRON SCRAP AND IRON POWDER ON COMMISSION BASIS F ROM LAST TEN YEARS. EXCEPT THIS, THERE WAS NO OTHER INCOME FOR THE FAMI LY. THE ASSESSEE ALSO REPLIED VIDE LETTER DATED 26.09.2008 BEFORE THE A.O . THAT HE WAS NOT HAVING ANY BANK ACCOUNT UPTO 2006 AND OPENED BANK ACCOUNT WITH NIDHI CO- OPERATIVE BANK ON 19.06.2006. THE ASSESSEE HAS SHO WN BEFORE THE A.O. IN REPLY, THE CLOSING BALANCE OF CASH AS UNDER: SR. NO. AS ON CLOSING BALANCE 1 31/03/2001 RS. 18,36,439 2 31/03/2002 RS.19,48,609 3 31/03/2003 RS.20,82,612 4 31/03/2004 RS.21,18,792 5 31/03/2005 RS.22,76,437 6 31/03/2006 RS.11,29,241 7 31/03/2007 RS.7,84,191 THE ASSESSEES CLAIM THAT HE HAD CASH IN HAND MORE THAN RS. 17 LACS AS ON 31.03.2000, WAS NOT FOUND TENABLE FROM MORE THAN LA ST TEN YEARS AS HE WAS LIVING IN AHMADABAD MORE THAN 10 YEARS. NUMBER OF BANKS ARE THERE IN THE AHMADABAD ITSELF. IT WAS RISKY TO KEEP SO MUCH CAS H IN THE HOUSE. THE ASSESSEE HAD PURCHASED THE RESIDENTIAL BUILDING IN AHMADABAD FOR THE FIRST TIME IN A.Y. 06-07 OF RS.11,59,121/- AND ONE SHOP F OR RS.73,185/-. THUS, HE DID NOT FIND ANY BASIS TO HAVE OPENING CAPITAL BALA NCE OF RS.17,06,050/-. THUS, HE MADE ADDITION UNDER THE HEAD UNDISCLOSED INCOME OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD ALLOWED THE APPEAL BY OBSERVING THAT THE IT(SS)A NO. 314/AHD/10 A.Y. 01-02 PAGE 4 APPELLANT HAD DISCLOSED IN RETURN FOR A.Y. 07-08, C ASH OF RS.20 LACS FOUND WITH HIM BY THE POLICE ON 25.11.2006. THERE ARE NO OTHE R ASSETS. THE CASH FOUND AND DISCLOSED IS ACCUMULATION OF THE CAPITAL DURING THESE ASSESSMENT YEARS. THEREFORE, THE ADDITION OF THE AMOUNT IN A.Y. 01-02 WOULD AMOUNT TO DOUBLE TAXATION PARTICULARLY AS NO INFERENCE CAN BE DRAWN FROM BOOKS AND EVIDENCE REJECTED BY THE A.O. 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. VEHE MENTLY ARGUED THAT ON 25.11.2006, THE POLICE HAS SEIZED CASH OF RS.20 LAC S, WHICH WAS RELEVANT TO A.Y. 07-08. THE APPELLANT HAD SHOWN CLOSING CAPITA L BALANCE AS ON 31.03.2001 AT RS.17,60,050/- BUT THERE IS NO BASIS. THE APPELLANT HAD ADMITTED DURING THE POST SEARCH INQUIRY THAT HE DID NOT MAINTAIN THE BOOKS OF ACCOUNT AND HAD NOT OPENED ANY BANK ACCOUNT TILL 19 .06.2006. THE ASSESSEE WAS NOT FILING ANY INCOME TAX RETURN. THERE WAS NO EVIDENCE OF AGRICULTURE INCOME WITH THE ASSESSEE. THE LAND WAS TRANSFERRED IN THE NAME OF ASSESSEE IN THE YEAR 2006. HE FURTHER ARGUED THAT THERE IS NO DOUBLE ADDITION AS ASSESSEE HAS SHOWN OPENING BALANCE AS ON 31.03.2001 . THEREAFTER, HE HAD PURCHASED ONE RESIDENTIAL HOUSE AND ONE SHOP IN A.Y . 06-07 AND MADE INVESTMENT IN TOTAL AT RS. 12,32,306/-. THUS, HE R EQUESTED TO REVERSE THE ORDER OF THE CIT(A). LD. A.R. OF THE APPELLANT ARG UED THAT THIS WAS THE CLOSING BALANCE OF THE PRECEDING YEAR AND OPENING BALANCE O F THE YEAR UNDER CONSIDERATION AND THIS SHOULD BE EVEN CONSIDERED AS UNDISCLOSED INCOME, IT SHOULD BE ADDED IN A.Y. 2000-01. HE RELIED UPON IN CASE OF PANJI MORMUGAO PORT TRUST VS THE C.I.T., PANJI BENCH, AND ARGUED THAT THE BOOKS OF ACCOUNT IT(SS)A NO. 314/AHD/10 A.Y. 01-02 PAGE 5 HAS NOT BEEN REJECTED BY THE A.O. AND PRAYED TO CON FIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS SHOWN CLOSING CAPITAL BAL ANCE IN 2000-01 AT RS. 17,60,500/- IN THE CAPITAL ACCOUNT WHICH WAS OPENI NG BALANCE OF A.Y. 2001- 02. IT IS TRUE THAT THERE IS NO EVIDENCE OF AGRICU LTURE INCOME EXCEPT EVIDENCE OF HOLDING ALONGWITH HIS BROTHER BEFORE THE A.O. T HERE IS NO BANK ACCOUNT, NO BOOKS OF ACCOUNT BUT IT IS ALSO TRUE THAT IT IS CLO SING BALANCE OF CAPITAL FOR THE YEAR 2000-01 AND OPENING BALANCE OF A.Y. 01-02. IT MEANS THIS INCOME WAS ALLEGED EARNED BY THE ASSESSEE BEFORE THE YEAR UNDE R CONSIDERATION WHICH CAN BE TAXED IN THE YEAR FOR WHICH IT WAS PERTAINED . THUS, WE UPHELD THE ORDER OF THE CIT(A) AND DISMISS THE REVENUES APPEA L. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 19.09.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER AC COUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) ,