Smt. Hansaben Amrutlal Gandhi, Surat V. The ACIT.,Cent,Circle-3, Surat

ITSSA 503/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9086 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 25-02-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 24-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Assessee Lawyers: R N VEPARI
• Keywords: Unexplained expenditure
• Section: 132

Judgement Text

IT (SS) NO. 503 OF 2010 . A.Y. : 2004 - 05 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. (SS) A NO. 503/AHD/2010 (ASSESSMENT YEAR:2004-05) SMT. HANSABEN AMRUTLAL GANDHI, APURVA TWISTING & WARPING WORKS, 1/1201, KAKAJI STREET NANPURA, SURAT (APPELLANT) VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, SURAT (RESPONDENT) PAN: ABAPG3795R APPELLANT BY : SHRI R. N. VEPARI RESPONDENT BY : SHRI SUMIT KUMAR, SR.D.R. ( )/ ORDER DATE OF HEARING : 22-03-20 13 DATE OF PRONOUNCEMENT : 30 -04-2013 PER SHRI ANIL CHATURVEDI,A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT (A)- II, AHMEDABAD DATED 06-04-2010 FOR THE ASSESSMENT Y EAR 2004-05. 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF THE L OWER AUTHORITIES ARE AS UNDER. IT (SS) NO. 503 OF 2010 . A.Y. : 2004 - 05 2 3. A SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON 07.11.2006 AT THE RESIDENCE OF SHRI SANJAY I. SADAD IWALA, WHEREIN CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS FOUND TO HAVE BELON GED TO THE ASSESSEE SHRI MAHESHKUMAR A. GANDHI/SHRI YOGESHKUMAR A. GAND HI AND HIS FAMILY MEMBERS. ACCORDINGLY A NOTICE U/S 153C OF THE I.T. ACT DATED 08.02.2008 WAS ISSUED AND SERVED UPON THE ASSESSEE, IN RESPONS E TO WHICH THE ASSESSEE FILED RETURN OF INCOME FOR THE AY 2004-05 ON 31.07.2008 DECLARING TOTAL INCOME OF RS.35,690/-. 4. ON THE BASIS OF SEIZED MATERIAL, ASSESSING OFFIC ER NOTICED THAT THE ASSESSEE HAD MADE EXPENSES TOWARDS RENOVATION OF HO USE AMOUNTING TO RS.10,45,200/-. SINCE THE AMOUNT WAS NOT SHOWN IN THE BALANCE-SHEET OF THE ASSESSEE, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT SHOULD NOT BE TREATED AS UNACCOUNTED EXPENSES TOWAR DS RENOVATION OF THE HOUSE. IN THE ABSENCE OF ANY SATISFACTORY EXPLANAT ION, THE ASSESSING OFFICER CONSIDERED THE UNACCOUNTED EXPENDITURE MADE ON RENOVATION OF HOUSE AMOUNTING TO RS.10,45,200/- AS INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT (A) II, AHMEDABAD AND THE LD. CI T(A) VIDE ITS ORDER DATED 06.04.2010 DISMISSED THE APPEAL OF THE ASSESS EE. 5. AGGRIEVED BY THE ORDER OF LD. CIT (A), THE ASSES SEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GR OUNDS:- ADDITION OF RS.10,45,200/- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS.10,41,200/- IN RESPECT OF EXPENSES TOWARDS RENOVATION OF HOUSE AT 1/1201, KAKAJI STREE T, NANPURA, SURAT ON THE BASIS OF SEIZED MATERIAL BF-13, PAGE N O.16 WHEN THAT PAPER WAS ONLY AN ESTIMATE GIVEN BY CONTRACTOR . IT (SS) NO. 503 OF 2010 . A.Y. : 2004 - 05 3 2. THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIO NER OF INCOME- TAX (APPEALS) HAS NOT TAKEN INTO CONSIDERATION THE SUBMISSION VIDE LETTER DATED 16.03.2010 EXPLAINING AS TO HOW T HE AFOREMENTIONED PAPER WAS ONLY AN ESTIMATE. 6. BEFORE US, THE LD. A.R. SUBMITTED THAT THE DOCUM ENTS, WHICH WERE SEIZED AND ON THE BASIS OF WHICH THE ADDITION WAS M ADE BY THE ASSESSEE, WAS AN ESTIMATE GIVEN BY SHRI MAHESH BUILDER. THE LD. A.R. FURTHER SUBMITTED THAT SINCE THE EXISTING BUILDING WAS OLD, THE ASSESSEE WANTED TO DEMOLISH AND RECONSTRUCT THE SAME, SO HAD APPROACHE D TO SHRI MAHESH BUILDER FOR ITS ESTIMATE. THAT THE DOCUMENTS SEIZE D WERE JUST AN ESTIMATE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD INCURRED RS.4,47,000/- DURING THE FY 2005-06 AND THE SAME WAS ACCOUNTED FOR IN IT S BALANCE-SHEET. HE FURTHER SUBMITTED THAT THERE WAS NO EVIDENCE ON THE WORK BEING UNDERTAKEN IN THE YEAR UNDER APPEAL AND THE ADDITION WAS MADE ONLY ON ESTIMATE BASIS. HE THUS URGED THE ADDITION MADE BY THE ASSE SSING OFFICER BE DELETED. 7. THE LD. D.R., ON THE OTHERHAND, SUPPORTED THE OR DER OF THE ASSESSING OFFICER AND THE LD. CIT (A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED FACT THAT THE ADDITION HA S BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF MATERIAL SEIZED D URING THE COURSE OF SEARCH OF SHRI SANJAY I. SADADIWALA. IT IS ALSO TH E FACT THAT THE REVENUE HAS RELIED ONLY ON THE BASIS OF THE SEIZED MATERIAL WIT HOUT BRINGING ANY OTHER TANGIBLE EVIDENCE ON RECORD IN SUPPORT OF THE ADDIT ION. THE ASSESSEE BEFORE US HAS SUBMITTED THAT SHE HAD INCURRED AN EX PENSE OF RS.4,47,000/- IN THE NEXT YEAR (A.Y. 2005-06) AND HAS ALSO PLACED A COPY OF ACCOUNT AT PAGE 6 OF THE PAPER BOOK FILED BEFORE US. THE LD. D.R. COULD NOT CONTROVERT THE AFORESAID SUBMISSION OF THE ASSESSEE BY BRINGIN G ANY CONTRARY MATERIAL IT (SS) NO. 503 OF 2010 . A.Y. : 2004 - 05 4 ON RECORD. IT IS ALSO THE FACT THAT THE MATERIAL O N WHICH THE ESTIMATE HAS BEEN MADE WAS DATED 13.12.2002; WHEREAS THE SEARCH HAD TAKEN PLACE ON 07.11.2006. THE ASSESSEE HAS ALSO NOT BEEN IN A PO SITION TO SUPPORT HIS CONTENTION WITH ANY TANGIBLE EVIDENCE THAT THE SEIZ ED DOCUMENT WAS AN ESTIMATE AND NOT THE DETAILS OF ACTUAL EXPENDITURE. CONSIDERING THE TOTALITY OF THE FACTS, WE ARE OF THE VIEW THAT IN THE PRESEN T CASE THE ENTIRE AMOUNT OF RS.10,45,200/- CANNOT BE ADDED TO THE INCOME BUT TH E CREDIT OF EXPENDITURE INCURRED BY THE ASSESSEE AMOUNTING TO RS.4,47,000/- NEEDS TO BE GRANTED TO THE ASSESSEE. IT IS ALSO A FACT THAT THE LD. CI T (A), WHILE CONFIRMING AND UPHOLDING THE ORDER OF ASSESSING OFFICER HAS PASSED A VERY CRYPTIC ORDER. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT TO BE FAIR TO BOTH SIDES AND TO MEET THE ENDS OF JUSTICE THE ADDITION BE RESTRICTED ONLY TO THE EXTENT OF RS.5,98,200/- (RS 1045200 LESS 4,47000/-). 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 4 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY BIJU COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD IT (SS) NO. 503 OF 2010 . A.Y. : 2004 - 05 5 1.DATE OF DICTATION - 02-04-2013 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 02 /04/ 2013 MEMBER .OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2013. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 04 -2013 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2013 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2013. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER