Hiresh Cloth Owners Association, Ahmedabad V. The Dy.CIT.,Circle-9, Ahmedabad

ITSSA 350/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0140 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Revenue expenditure
• Section: 40A(3); 68

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER APPEAL(S) BY APPELLANTS VS. RESPONDENT SL. NO(S) IT(SS)A NO(S) ASSESSMENT YEAR(S) APPELLANT(S) RESPONDENT 1. 348/AHD/2011 2003-04 AL VIJAY OWNERS ASSOCIATION J.P. CHOWK, KHANPUR AHMEDABAD PAN : AAAAA 9873 G DY.CIT 2. 349/AHD/2011 2005-06 -DO- -DO- 3. 350/AHD/2011 2005-06 HIRESH CLOTH OWNERS ASSOCIATION REVDI BAZAR AHMEDABAD PAN:AAAAH 2959N -DO- 4. 351/AHD/2011 2006-07 -DO- -DO- ASSESSEE(S) BY : SHRI SUNIL H. TALATI, AR REVENUE BY : SHRI O.P.VAISHNAV, CIT-DR ' % & $' / / / / DATE OF HEARING : 19/06/2014 )*+ & $' / DATE OF PRONOUNCEMENT : 27/06/2014 , / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE FOUR APPEALS BY THE DIFFERENT TWO ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD (CIT(A) IN SHORT) DAT ED 15/02/2011 IN THE CASE OF AL VIJAY OWNERS ASSOCIATION FOR ASST.Y EARS 2003-04 & IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 2 - 2005-06 AND DATED 14/02/2011 IN THE CASE OF HIRESH CLOTH OWNERS ASSOCIATION FOR ASST.YEARS 2005-06 & 2006-07. SIN CE COMMON ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF C ONVENIENCE. 2. FIRST, WE TAKE UP THE IT(SS)A NO.348/AHD/2011 FO R AY 2003-04. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT AP PRECIATING THE FACT THAT HE ASSESSMENT U/S.153C R.W.S.153A IS BAD IN LA W INASMUCH AS NOTICE U/S.153C WAS NOT SERVED UPON THE ASSESSEE IN TIME AT ALL. THE LEARNED C.I.T.(APPEALS) HAS GONE ONLY ON THE BASIS OF WHAT IS MENTIONED IN THE ASSESSMENT ORDER BUT HAS NOT APPRECIATED THE FACTS AND EVIDENCES PROVING BEYOND DOUBT THAT NO VALID NOTICE WAS SERVE D ON THE ASSESSEE OR ON ANY AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THIS IT IS SUBMITTED THAT THE ASSESSMENT ORDER PASSED IS BAD I N LAW AND THE SAME BE QUASHED AS NULL AND VOID. 2. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.1,94,000/- U/S.40A(3) BEING 20% OF THE AMOUNT OF THE EXPENDITURE OF RS.9,20,000/- AND ANOTHER AMOUNT OF RS.10,000/- AS PAYMENT IN CASH EXCEEDING RS.20,000/- TO DIFFERENT PARTIES. IT IS SUBMITTED THAT ACCORDING TO SECTION 40A(3) SUCH EXPENDITURE CAN BE DISALLOWED ONLY IF SUCH EXPENDITURE I.E. CLAIMED AS EXPENDITURE WHILE COMPUTING TOTAL INCOME. THE LEARNED C.I.T.(APPEALS) HAS GROSSLY ERRED IN NO T APPRECIATING THE FACT THAT SUCH EXPENDITURE HAS NOT BEEN DEBITED IN PROFIT & LOSS ACCOUNT AS REVENUE EXPENDITURE AND NOT CLAIMED SO. IT IS SUBMITTED THAT THE ASSESSEE HAVING INCURRED THE EXPENDITURE, WHICH HAS GONE UNDER THE HEAD FIXED ASSETS/WORK-IN-PROGRESS IN BALANCE SHEET , THE DISALLOWANCE U/S.40A(3) CANNOT BE MADE. IT IS SUBMITTED THAT TH E ADDITION CONFIRMED OF RS.1,94,000/- BY THE LEARNED C.I.T.(APPEALS) BE DELETED. 3. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.2,30,000/- U/S.68 OF THE INCOME TAX ACT NOT APPR ECIATING THE IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 3 - SUFFICIENT AND CONVINCING EVIDENCE THAT THE ASSESSE E HAS RECEIVED THE MONEY FROM PARTIES TOWARDS BOOKING OF THE SHOPS AND OFFICES. IT IS SUBMITTED THAT THE ASSESSEE HAVING FURNISHED THE ID ENTITY AND CAPACITY OF THE DEPOSITORS AS AVAILABLE, THE SAME BE ACCEPTED A S GENUINE AND THE ADDITION MADE AND CONFIRMED OF RS.2,30,000/- BE DEL ETED. 4. THE ORDER PASSED BY THE LEARNED C.I.T.(APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 5. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/ OR TO AMEND ALL OR ANY GROUNDS BEFORE THE FINAL HEARING OF THE APPEAL. 3. BRIEFLY STATED FACTS ARE THAT A SEARCH OPERATION U/S.132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) WAS CONDUCTED IN THE CASE OF M/S.DELHIWALA GROUP ON 04/ 08/2006. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCL E-1(2), AHMEDABAD VIDE LETTER NO.AC(IT)-CC-1(2)/PROCEEDINGS U/S.153C/ AOA/2008-09 DATED 31/12/2008 FORWARDED THE COPIES OF CERTAIN SU CH PAPERS SEIZED FROM THE OFFICE OF FARUK DELHIWALA, PROP.QUICK CONS TRUCTION, 1 ST FLOOR, HOTEL ESQUIRE, OPP: SIDI SAIYED CIRCLE-1(2), AHMEDA BAD HAS RECORDED SATISFACTION NOTE, WHILE INITIATING PROCEEDINGS U/S .153C OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT U/S.143(3) R.W.S.153C OF THE ACT WAS FRAMED VIDE ORDER DATED 30/12/2009, THEREBY THE ASSESSING OFFICER(AO) MADE ADDITION OF RS.1,94,000/- ON ACCOUNT OF DISALL OWANCE U/S.40A(3) OF THE ACT AND OF RS.2,30,000/- ON ACCOUNT OF DISALLOW ANCE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. AGAINS T THIS, ASSESSEE FILED AN IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 4 - APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL. NOW, THE ASSESSEE IS IN FURT HER APPEAL BEFORE US. 4. AT TIME OF HEARING, LD.COUNSEL FOR THE ASSESSEE SHRI SUNIL H.TALATI SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 1 OF THE APPEAL. IN VIEW OF THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE, GROUND NO.1 IS DISMISSED AS NOT PRESSED. 5. SECOND GROUND OF ASSESSEES APPEAL IS AGAINST CO NFIRMATION OF ADDITION OF RS.1,94,000/- BY THE CIT(A). THE LD.CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS CONFIRMED THE ADDI TION OF RS.1,94,000/- BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. HE SUBMITTED THAT THE LD.CIT(A) GROSSLY ERRED IN NOT APPRECIATIN G THE FACT THAT SUCH EXPENDITURE HAS NOT BEEN DEBITED IN PROFIT & LOSS A CCOUNT AS REVENUE EXPENDITURE AND NOT CLAIMED SO. HE SUBMITTED THAT THE ASSESSEE HAVING INCURRED THE EXPENDITURE WHICH HAS GONE UNDER THE H EAD FIXED ASSETS/WORK-IN-PROGRESS IN BALANCE-SHEET, THE DISAL LOWANCE U/S.40A(3) CANNOT BE MADE. 5.1. ON THE CONTRARY, LD.CIT-DR VEHEMENTLY SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND OPPOSED THE SUBMISSIONS O F THE LD.COUNSEL FOR THE ASSESSEE. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 5 - 5.2. IN REJOINDER, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT WITH REGARD TO THE FACT THAT THE EXPENDITURE INCURRED HA S GONE UNDER THE HEAD OF FIXED ASSETS/WORK-IN-PROGRESS IN BALANCE-SHEET, THE ISSUE CAN BE RESTORED BACK TO THE FILE OF AO FOR VERIFICATION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIR CUMSTANCES OF THE CASE, WE FIND THAT THE SUBMISSION OF THE LD.COUNSEL FOR T HE ASSESSEE IS REASONABLE AND JUSTIFIED, THEREFORE WE HEREBY SET A SIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THIS ISSUE BACK TO THE FILE O F AO WITH A DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE THAT THE EXPENDITU RE OF RS.9,20,000/- AND ANOTHER AMOUNT OF RS.10,000/- HAS NOT BEEN CLAIMED AS REVENUE EXPENDITURE AND TO BE TREATED AS FIXED ASSETS/WORK- IN-PROGRESS IN BALANCE-SHEET. IF THE ASSESSEES CONTENTION IS FO UND TO BE TRUE, THE AO IS DIRECTED TO DELETE THE ADDITION ACCORDINGLY. 7. THIRD GROUND OF ASSESSEES APPEAL IS AGAINST CON FIRMATION OF ADDITION OF RS.2,30,000/- UNDER SECTION 68 OF THE A CT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS SUFFICIENT AND CONVINCING EVIDENCE THAT THE ASSESSEE HAS RECEIVED ON-MONEY FROM PARTIE S TOWARDS BOOKING OF THE SHOPS AND OFFICES. HE SUBMITTED THAT THE ASSES SEE HAVING FURNISHED IDENTITY AND CAPACITY OF THE DEPOSITORS AS AVAILABL E, THE SAME BE ACCEPTED AS GENUINE. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 6 - 7.1. ON THE CONTRARY, LD.CIT-DR HAS SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE W AS REQUIRED TO DISCHARGE HIS ONUS BY FURNISHING THE CONVINCING EVI DENCES. 7.2. IN REJOINDER, LD.COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE EVIDENCES CAN BE VERIFIED BY THE AO AND HE SUBMITTE D THAT THE MATTER BE RESTORED BACK TO THE FILE OF AO FOR VERIFICATION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO IN HIS ORDER HAS OBSERVED THAT THE ASSESSEE HAS CREDITED IN ITS BOOKS OF ACCOUNTS AMOUNTS TOWARDS B OOKING OF SHOPS/OFFICES FROM THE SEVERAL MEMBERS. IT IS OBSE RVED BY THE AO THAT THE ASSESSEE COULD NOT FURNISH THE DETAILS OF ALLOT MENT/SALES IN RESPECT OF THE FOLLOWING MEMBERS:- NAME AMOUNT DATE I) KASAMBHAI RS.1,00,000/- 31/10/2002 II)WASIM AHMED KHALIL RS. 80,000/- 13/12/2002 III) RS. 50,0 00/- 13/01/2003 TOTAL RS.2,30,000/- 8.1. IT IS ALSO OBSERVED BY THE AO THAT THE ASSESSE E HAS FAILED TO FURNISH THE PARTICULARS AND CONFIRMATION FROM THE ABOVE DEP OSITORS AND TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S.68 OF THE A CT. THE LD.CIT(A) HAS IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 7 - OBSERVED THAT NO EVIDENCE WAS FURNISHED BY THE APPE LLANT DURING THE COURSE OF APPELLATE PROCEEDINGS. THE LD.CIT(A) HAS ALSO OBSERVED THAT THE CONFIRMATION FURNISHED DURING THE APPELLATE PRO CEEDINGS DOES NOT CONTAIN THE COMPLETE ADDRESS OF KASAMBHAI NEITHER A NYTHING ABOUT SOURCE OR HIS IDENTITY OF CREDITWORTHINESS. IN RESPECT OF WASIM AHMED KHALIL, THE LD.CIT(A) DOUBTED THE CREDITWORTHINESS AND SOUR CE OF DEPOSIT. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS TH AT ALL DETAILS ARE AVAILABLE, SAME CAN BE VERIFIED. 8.2. AFTER CONSIDERING THE TOTALITY OF THE FACTS A ND THE SUBMISSIONS OF BOTH THE PARTIES, WE ARE OF THE CONSIDERED VIEW THA T THE CLAIM OF THE ASSESSEE IS REQUIRED FOR VERIFICATION AT THE END OF THE AO. HENCE, THIS ISSUE IS RESTORED BACK TO THE FILE OF AO FOR VERIFI CATION. THE ORDER OF THE LD.CIT(A) IS HEREBY SET ASIDE AND AO IS DIRECTED TO DECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FURNISH THE EVIDENCE IN SUP PORT OF ITS CLAIM AND, ACCORDINGLY, THE AO WILL DECIDE THE ISSUE IN ACCORD ANCE WITH LAW. 9. GROUND NOS.4 & 5 ARE GENERAL IN NATURE REQUIRE N O INDEPENDENT ADJUDICATION. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE, I.E. IT(SS)A NO.348/AHD/2011 FOR AY 2003-04 IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 8 - 11. NOW, WE TAKE UP THE IT(SS)A NO.349/AHD/2011 FOR AY 2005-06 IN THE CASE OF AL VIJAY OWNERS ASSOCIATION. THE ASSE SSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT AP PRECIATING THE FACT THAT HE ASSESSMENT U/S.153C R.W.S.153A IS BAD IN LA W INASMUCH AS NOTICE U/S.153C WAS NOT SERVED UPON THE ASSESSEE IN TIME AT ALL. THE LEARNED C.I.T.(APPEALS) HAS GONE ONLY ON THE BASIS OF WHAT IS MENTIONED IN THE ASSESSMENT ORDER BUT HAS NOT APPRECIATED THE FACTS AND EVIDENCES PROVING BEYOND DOUBT THAT NO VALID NOTICE WAS SERVE D ON THE ASSESSEE OR ON ANY AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THIS IT IS SUBMITTED THAT THE ASSESSMENT ORDER PASSED IS BAD I N LAW AND THE SAME BE QUASHED AS NULL AND VOID. 2. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.1,39,988/- U/S.40A(3) AS PAYMENT IN CASH EXCEEDI NG RS.20,000/- TO DIFFERENT PARTIES. IT IS SUBMITTED THAT ACCORDING TO SECTION 40A(3) SUCH EXPENDITURE CAN BE DISALLOWED ONLY IF SUCH EXPENDIT URE ARE CLAIMED AS EXPENDITURE WHILE COMPUTING TOTAL INCOME. THE LEARNED C.I.T.(APPEALS) HAS GROSSLY ERRED IN NO T APPRECIATING THE FACT THAT SUCH EXPENDITURE HAS NOT BEEN DEBITED IN PROFIT & LOSS ACCOUNT AS REVENUE EXPENDITURE AND NOT CLAIMED SO. IT IS SUBMITTED THAT THE ASSESSEE HAVING INCURRED THE EXPENDITURE, WHICH HAS GONE UNDER THE HEAD FIXED ASSETS/WORK-IN-PROGRESS IN BALANCE SHEET , THE DISALLOWANCE U/S.40A(3) CANNOT BE MADE. IT IS SUBMITTED THAT TH E ADDITION CONFIRMED OF RS.1,39,988/- BY THE LEARNED C.I.T.(APPEALS) BE DELETED. 3. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.2,45,000/- (4,25,000 1,80,000) U/S.68 OF THE I NCOME TAX ACT. THE LEARNED C.I.T. (APPEALS) HAS ERRED IN REJECTING THE EVIDENCES FILED THAT THE AMOUNTS WERE RECEIVED FROM VARIOUS PARTIES, WHO HAVE DEPOSITED THE AMOUNT FOR BOOKING THE SHOPS AND OFFICES AND THEY W ERE THE PROSPECTIVE BUYERS TO WHOM MONIES WERE REQUIRED TO BE REFUNDED ON CANCELLATION OF BOOKING. IT IS SUBMITTED THAT ON THE FACTS AND CIR CUMSTANCES OF THE CASE THE ADDITION U/S.68 OF THE I.T.ACT ARE NOT AT ALL S USTAINABLE AND THE ADDITION CONFIRMED BY THE LEARNED C.I.T. (APPEALS) BE DELETED. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 9 - 4. THE ORDER PASSED BY THE LEARNED C.I.T.(APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 5. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/ OR TO AMEND ALL OR ANY GROUNDS BEFORE THE FINAL HEARING OF THE APPEAL. 12. AT TIME OF HEARING, LD.COUNSEL FOR THE ASSESSE E SHRI SUNIL H.TALATI SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 1 OF THE APPEAL. IN VIEW OF THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE, GROUND NO.1 IS DISMISSED AS NOT PRESSED. 13. IN RESPECT OF GROUND NOS.2 & 3, IT IS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE THAT THE FACTS ARE IDENTICAL AS WE RE IN IT(SS)A NO.348/AHD/2011 IN ASSESSEES OWN CASE. THIS SUBMI SSION IS NOT CONTROVERTED BY THE REVENUE. 13.1. WE HAVE HEARD THE PARTIES. SINCE THE FACTS ARE SIMILAR TO THE FACTS AS WERE IN IT(SS)A NO.348/AHD/2011 IN ASSESSEES OW N CASE(SUPRA), THEREFORE GROUND NOS.2 AND 3 OF ASSESSEES APPEAL F OR THIS YEAR ALSO, ARE RESTORED BACK TO THE FILE OF AO FOR DECISION AFRESH IN THE LIGHT OF OUR DIRECTION GIVEN IN IT(SS)A NO.348/AHD/2011(SUPRA). GROUND NOS.4 & 5 ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDI CATION. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE, I.E. IT(SS)A NO.349/AHD/2011 FOR AY 2005-06 IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. 15. NOW, WE TAKE UP THE CASE OF HIRESH CLOTH OWNERS ASSOCIATION IN IT(SS)A NO.350/AHD/2011 FOR AY 2005-06. THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 10 - 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT AP PRECIATING THE FACT THAT HE ASSESSMENT U/S.153C R.W.S.153A IS BAD IN LA W INASMUCH AS NOTICE U/S.153C WAS NOT SERVED UPON THE ASSESSEE IN TIME AT ALL. THE LEARNED C.I.T.(APPEALS) HAS GONE ONLY ON THE BASIS OF WHAT IS MENTIONED IN THE ASSESSMENT ORDER BUT HAS NOT APPRECIATED THE FACTS AND EVIDENCES PROVING BEYOND DOUBT THAT NO VALID NOTICE WAS SERVE D ON THE ASSESSEE OR ON ANY AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THIS IT IS SUBMITTED THAT THE ASSESSMENT ORDER PASSED IS BAD I N LAW AND THE SAME BE QUASHED AS NULL AND VOID. 2. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.2,55,000/- U/S.68 OF THE INCOME TAX ACT. THE L EARNED C.I.T. (APPEALS) HAS ERRED IN REJECTING THE EVIDENCES FILE D THAT THE AMOUNTS WERE RECEIVED FROM VARIOUS PARTIES, WHO HAVE DEPOSI TED THE AMOUNT FOR BOOKING THE SHOPS AND OFFICES AND THEY WERE THE PRO SPECTIVE BUYERS TO WHOM MONIES WERE REQUIRED TO BE REFUNDED ON CANCELL ATION OF BOOKING. IT IS SUBMITTED THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION U/S.68 OF THE I.T.ACT IS NOT AT ALL SUSTAI NABLE AND THE ADDITION CONFIRMED BY THE LEARNED C.I.T. (APPEALS) BE DELETE D. 3. THE ORDER PASSED BY THE LEARNED C.I.T.(APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 4. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/ OR TO AMEND ALL OR ANY GROUNDS BEFORE THE FINAL HEARING OF THE APPEAL. 16. BRIEFLY STATED FACTS ARE THAT A SEARCH OPERATI ON U/S.132(1) OF THE ACT WAS CONDUCTED IN THE CASE OF M/S.DELHIWALA GROU P ON 04/08/2006. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-1(2), AHMEDABAD VIDE LETTER NO.AC(IT)-CC-1(2) / PROCEEDIN GS U/S.153C/HCOA/2008-09 DATED 31/12/2008 FORWARDED TH E SATISFACTION NOTE RECORDED BY HIM FOR NECESSARY ACTION U/S.153C OF THE ACT. THE COPIES OF CERTAIN SUCH PAPERS SEIZED FROM THE OFFIC E OF FARUK DELHIWALA, IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 11 - PROP.QUICK CONSTRUCTION, AHMEDABAD PERTAINING TO T HE ASSESSEE HAS BEEN FORWARDED BY HIM VIDE LETTER DATED 06/02/2009. SUBSEQUENTLY, THE ASSESSMENT U/S.143(3) R.W.S.153C OF THE ACT WAS FR AMED VIDE ORDER DATED 24/12/2009, THEREBY THE ASSESSING OFFICER(AO) MADE DISALLOWANCE OF RS.2,55,000/- TREATING THE SAME AS UNEXPLAINED CASH CREDIT. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL. NOW, THE ASSESS EE IS IN FURTHER APPEAL BEFORE US. 17. AT TIME OF HEARING, LD.COUNSEL FOR THE ASSESSEE SHRI SUNIL H.TALATI SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 1 OF THE APPEAL. IN VIEW OF THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE, GROUND NO.1 IS DISMISSED AS NOT PRESSED. 18. GROUND NO.2 OF ASSESSEES APPEAL IS AGAINST CON FIRMATION OF ADDITION OF RS.2,55,000/- MADE U/S.68 OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES HAVE ERRED IN REJECTING THE EVIDENCES FILED THAT THE AMOUNTS WERE RECEIVED FROM VARIOUS PARTIES, WHO HAVE DEPOSITED THE AMOUNT FOR BOOKING THE SHOPS AND OFFICES AND THEY WERE THE PROSPECTIVE BUYERS TO WHOM MONIES WERE REQ UIRED TO BE REFUNDED ON CANCELLATION OF BOOKING. 18.1. ON THE CONTRARY, LD.CIT-DR SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 12 - 19. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE FACTS ARE IDENTICAL TO THE FACTS A S WERE RAISED IN GROUND NO.3 OF IT(SS)A NO.348/AHD/2011 (IN THE CASE OF AL VIJAY OWNERS ASSOCIATION-SUPRA) FOR AY 2003-04, WHEREIN AFTER CO NSIDERING THE TOTALITY OF THE FACTS THE IT(SS)A NO.348/AHD/2011, WE HAVE S ET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORED THE ISSUE BACK TO THE FI LE OF AO WITH FOLLOWING DIRECTIONS:- 8.2. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND THE SUBMISSIONS OF BOTH THE PARTIES, WE ARE OF THE CONS IDERED VIEW THAT THE CLAIM OF THE ASSESSEE IS REQUIRED FOR VERI FICATION AT THE END OF THE AO. HENCE, THIS ISSUE IS RESTORED BACK TO THE FILE OF AO FOR VERIFICATION. THE ORDER OF THE LD.CIT(A) IS HEREBY SET ASIDE AND AO IS DIRECTED TO DECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS DIRECTED TO FURNISH THE EVIDENCE IN SUP PORT OF ITS CLAIM AND, ACCORDINGLY, THE AO WILL DECIDE THE ISSU E IN ACCORDANCE WITH LAW. 19.1. SINCE THERE IS NO CHANGE IN THE FACTS IN THE PRESENT CASE, THEREFORE THIS GROUND OF ASSESSEES APPEAL IS RESTORED BACK T O THE FILE OF AO TO DECIDE IT AFRESH IN THE LIGHT OF OUR ABOVE DIRECTIO N PASSED IN IT(SS)A NO.348/AHD/2011. THEREFORE, THE IMPUGNED ORDER OF THE LD.CIT(A) IS HEREBY SET ASIDE. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 13 - 20. GROUND NOS.3 & 4 ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDICATION. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE, I.E. IT(SS)A NO.350/AHD/2011 FOR AY 2005-06 IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. 22. FINALLY, WE TAKE UP THE CASE OF HIRESH CLOTH OWNERS ASSOCIATION IN IT(SS)A NO.351/AHD/2011 FOR AY 2006-07. THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT AP PRECIATING THE FACT THAT HE ASSESSMENT U/S.153C R.W.S.153A IS BAD IN LA W INASMUCH AS NOTICE U/S.153C WAS NOT SERVED UPON THE ASSESSEE IN TIME AT ALL. THE LEARNED C.I.T.(APPEALS) HAS GONE ONLY ON THE BASIS OF WHAT IS MENTIONED IN THE ASSESSMENT ORDER BUT HAS NOT APPRECIATED THE FACTS AND EVIDENCES PROVING BEYOND DOUBT THAT NO VALID NOTICE WAS SERVE D ON THE ASSESSEE OR ON ANY AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THIS IT IS SUBMITTED THAT THE ASSESSMENT ORDER PASSED IS BAD I N LAW AND THE SAME BE QUASHED AS NULL AND VOID. 2. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN CONFIR MING THE ADDITION OF RS.3,00,000/- U/S.68 OF THE INCOME TAX ACT. THE L EARNED C.I.T. (APPEALS) HAS ERRED IN REJECTING THE EVIDENCES FILE D THAT THE AMOUNTS WERE RECEIVED FROM VARIOUS PARTIES, WHO HAVE DEPOSI TED THE AMOUNT FOR BOOKING THE SHOPS AND OFFICES AND THEY WERE THE PRO SPECTIVE BUYERS TO WHOM MONIES WERE REQUIRED TO BE REFUNDED ON CANCELL ATION OF BOOKING. IT IS SUBMITTED THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION U/S.68 OF THE I.T.ACT IS NOT AT ALL SUSTAI NABLE AND THE ADDITION CONFIRMED BY THE LEARNED C.I.T. (APPEALS) BE DELETE D. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 14 - 3. THE ORDER PASSED BY THE LEARNED C.I.T.(APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 4. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/ OR TO AMEND ALL OR ANY GROUNDS BEFORE THE FINAL HEARING OF THE APPEAL. 23. AT TIME OF HEARING, LD.COUNSEL FOR THE ASSESSEE SHRI SUNIL H.TALATI SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 1 OF THE APPEAL. IN VIEW OF THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE, GROUND NO.1 IS DISMISSED AS NOT PRESSED. 24. GROUND NO.2 OF ASSESSEES APPEAL IS AGAINST C ONFIRMATION OF ADDITION OF RS.3,00,000/- MADE U/S.68 OF THE ACT. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS ARE IDENTICAL TO THE FACTS AS WERE IN IT(SS)A NO.350/AHD/2011 FOR AY 2005-06 IN ASSESSEE S OWN CASE(SUPRA). THIS SUBMISSION IS NOT CONTROVERTED BY THE REVENUE. 25. WE HAVE HEARD BOTH THE PARTIES. SINCE THE FACT S ARE IDENTICAL TO THE FACTS AS WERE IN IT(SS)A NO.350/AHD/2011 FOR AY 200 5-06, WE SET ASIDE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND THE S AME IS RESTORED BACK TO THE FILE OF AO FOR DECISION AFRESH IN THE LIGHT OF OUR ABOVE DIRECTION PASSED IN IT(SS)A NO.350/AHD/2011(SUPRA). THUS, GR OUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. IT(SS)A NOS.348 & 349/AHD/2011 AL VIJAY OWNERS ASSN. VS. DY.CIT; AYS 2003-04 & 0 5-06 AND IT(SS)A NOS.350 & 351/AHD/2011 HIRESH CLOTH OWNERS ASSN. VS. DY.CIT; AYS 2005-0 6 & 06-07 - 15 - 26. GROUND NOS.3 & 4 ARE GENERAL IN NATURE REQUIR E NO INDEPENDENT ADJUDICATION. AS A RESULT, THE APPEAL OF THE ASSES SEE, I.E. IT(SS)A NO.351/AHD/2011 FOR AY 2006-07 IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. 27. IN THE COMBINED RESULT, APPEALS OF THE ASSESSEE IN IT(SS)A NOS.348 & 349/AHD/2011 (IN THE CASE OF AL VIJAY OWN ERS ASSOCIATION) AND APPEALS OF THE ASSESSEE IN IT(SS)A NOS.350 & 351/AHD/2011 (IN THE CASE OF HIRESH CLOTH OWNERS AS SOCIATION) ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27 / 6 /2014 /'.., .../ T.C. NAIR, SR. PS , & 0$1 21+$ , & 0$1 21+$ , & 0$1 21+$ , & 0$1 21+$/ COPY OF THE ORDER FORWARDED TO : 1. 34 / THE APPELLANT 2. 0534 / THE RESPONDENT. 3. !! $ '6 / CONCERNED CIT 4. '6() / THE CIT(A)-XV, AHMEDABAD 5. 1 #7 0$ , , / DR, ITAT, AHMEDABAD 6. 789 :% / GUARD FILE. ,' ,' ,' ,' / BY ORDER, 51$ 0$ //TRUE COPY// ; ;; ;/ // / !< !< !< !< ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD