Gujarat Ship Trading Corporation, Bhavnagar V. The ACIT.,Circle-2, Bhavnagar

ITSSA 698/AHD/2010

• Counselvise Citation: [2014] 121 COUNSELVISE.COM (IT) 9974 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-12-2013
• Assessment Year: misc
• Appeal Filed On: 27-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Assessee Lawyers: B R POPATAR
• Keywords: Income from undisclosed sources; Document seized; Opportunity of being heard; Opportunity of cross examination; Block assessment; Documents seized
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD , , , , BEFORE SHRI KUL BHARAT , JUDICIAL MEMBER AND , SHRI T.R. MEENA, ACCOUNTANT MEMBER .. , !' ! # $ ! # $ ! # $ ! # $ IT(SS)A NO. 698/AHD/2010 BLOCK PERIOD : 01.04.1989 TO 07.12.1999 GUJARAT SHIP TRADING CORPORATION 208/209, CITY CENTRE COMPLEX, KALANALA, BHAVNAGAR V/S . THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2, BHAVNAGAR PAN NO. A A BFG9315R (APPELLANT) .. (RESPONDENT) %& ' ( ! / BY APPELLANT SHRI B. R. POPAT, A.R. )*%& ' ( ! /BY RESPONDENT SHRI T. P. KRISHNAKUMAR, CIT. D.R. +, ' ' /DATE OF HEARING 03.12.2013 -./ ' ' /DATE OF PRONOUNCEMENT 24.01.2014 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF ASSESSEE WHICH H AS EMANATED FROM THE ORDER OF CIT(A)-XX, AHMEDABAD, DATED 31.08.2010 FOR BLOCK PERIOD 1-4-89 TO 31-12-2009. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER: THE HONBLE CIT(A) HAS ERRED IN- 1. CONFIRMING THE ADDITION AGGREGATING TO RS.54,12, 680/- (INADVERTENTLY MENTIONED AT RS.54,19,905/- IN THE A PPELLATE ORDER) IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 2 TREATING THE SAME AS UNDISCLOSED INCOME OF THE APPE LLANT IN RESPECT OF THE BLOCK PERIOD ENDED ON 7 TH DECEMBER 1999. 2. NOT CONSIDERING THE RATIO OF VARIOUS JUDGMENTS O F DIFFERENT COURTS AND TRIBUNALS, INCLUDING THOSE OF TERRITORIAL GUJAR AT HIGH COURT AND AHMADABAD TRIBUNAL. 2. IN THIS CASE ORIGINALLY, ASSESSMENT WAS PASSED U /S. 158BC R.W.S. 158BD ON 11.12.2002 IN WHICH UNDISCLOSED INCOME FOR BLOCK PERIOD WAS RS.54,19,905/-. THE A.O. OBSERVED AS UNDER: 1. AGAINST THIS ORDER THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A). THE LD CIT(A) WIDE ITS ORDER IN APPEAL NO. CIT(A)-XXVIII / 158 / 01-02 / DATED 08.03.2004 PARTLY ALLOWED THE ASSESSE E'S APPEAL BY GRANTING RELIEF OF MERELY RS. 7,230/-. THE ASSESSEE FURTHER WENT IN APPEAL BEFORE THE ITAT. BEFORE THE ITAT THE ASSESSEE CONTE NDED THAT THE FACTS OF THIS CASE ARE VERY MUCH SIMILAR TO THE CASE OF ETER NAL MOTORS PVT LTD VS ACIT WHERE THE HON'BLE ITAT HAD ALSO DELIVERED ITS JUDGMENT IN IT(SS) / A.N0.66/RJT/2004 / DATED 31.05.2005 AND IN THAT CAS E THE ITAT HAD REMANDED THE CASE BACK TO THE A.O WITH CERTAIN DIRE CTIONS. AGREEING WITH THE CONTENTION OF THE ASSESSEE THE HON'BLE ITAT BEI NG FACTS IDENTICAL RESTORE THE MATTER BACK TO THE FILE OF A.O TO CONSI DER THE ISSUE IN THE LIGHT OF' DIRECTION GIVEN IN ITS JUDGMENT IN THE CASE OF ETERNAL MOTORS PVT LTD TO PROVIDE COPIES OF THE STATEMENT RECORDED AND ALSO P ROVIDE OPPORTUNITY OF CROSS-EXAMINATION AND THEREAFTER TO FINALIZE THE MA TTER. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S 13 2(1) WAS CARRIED OUT IN THE GROUP CASES OF LATE SHRI MAHENDRA H. SHAH, H EMANT SHAH AND THEIR ASSOCIATES (MADHUPURI GROUP) ON 7.12.1999.STATEMENT S OF SHRI MAHENDRA H SHAH AND SHRI HEMANT SHAH WERE RECORDED. DURING T HE COURSE OF SEARCH AND THE POST SEARCH INQUIRES, IT WAS FOUND T HAT LATE SHRI MAHENDRA SHAH WAS INDULGING THE ACTIVITIES OF ISSUING ACCOMM ODATIVE ENTRIES OF LOANS AND PURCHASE/SALES TO VARIOUS PARTIES AGAINST RECEIPT OF CASH FROM THEM. DURING THE COURSE OF VERIFICATION OF THE SEIZ ED ACCOUNTS, IT WAS FOUND THAT THE ASSESSEE WAS HAVING SUBSTANTIAL UNDISCLOSE D INCOME AND IT WAS IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 3 ALSO FOUND THAT ENTRIES HAD BEEN OBTAINED BY THE AS SESSEE CONCERN ALSO. THE ENTRIES WERE NOT FOUND GENUINE BY THE A.O HENCE AN ADDITION OF RS. 52,30,000/- WAS MADE BY THE A.O U/S 68 OF THE I T A CT. 3. TO COMPLY WITH THE DIRECTIONS OF THE HON'BLE ITA T A NOTICE U/S 142(1) R.W.S 254, 158BC AND 158BD OF THE IT ACT WAS ISSUED ON 08.12.2009 AND DULY SERVED TO THE ASSESSEE. IN RESP ONSE TO THE NOTICE SHRI BHADRESH SANGHVI, C.A. ATTENDED AND REQUESTED TO SUPPLY COPY OF SATISFACTION NOTE RECORDED BY THE A.O, COPY OF STAT EMENT OF SHRI MAHENDRA H SHAH AND SHRI HEMANT SHAH WERE SUPPLIED TO THE AS SESSEE. PHOTOCOPIES OF THE SEIZED DOCUMENTS WERE ALSO GOT I NSPECTED TO THE ASSESSEE. IT WAS ALSO INFORMED THAT SHRI MAHENDRA SHAH HAS SINCE EXPIRED AND WHEREABOUTS OF SHRI HEMANT C. SHAH IS N OT KNOWN. HOWEVER, IT IS PERTINENT TO MENTION HERE THAT UNLIKE ON EARL IER OCCASIONS WHEN THE ASSESSEE DID NOT HAVE THE FACILITY OF INSPECTION OF COPIES OF SEIZED MATERIAL, DURING THE COURSE OF PRESENT ASSESSMENT P ROCEEDINGS ASSESSEE WAS GIVEN INSPECTION OF THE SEIZED MATERIAL. LD. A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON FINALIZATION THE BLOCK ASSESSMENT ON THE BASIS OF FINDING ALREADY GIVEN BY THE A.O. THE ASSESSEE FILED REPLY WHICH HAS BEEN CONSIDERED BY THE A.O. IT WAS POINTED OUT BY THE ASSESSEE THAT IN THIS CASE BLOCK ASSESSMENT WAS ORI GINALLY PASSED FEW YEARS BACK AND TRANSACTION CARRIED OUT WITH MADHUPURI GRO UP HAD ACCOUNTED FOR. HE ALSO REFERRED THE CASE LAWS RELIED IN FIRST ROUN D BEFORE THE ITAT AND AT THE TIME OF SECOND RE-ASSESSMENT BEFORE THE A.O. HE FU RTHER RELIED VARIOUS CASE LAWS BEFORE THE A.O. AND ALSO NARRATED THE FACTS ON ACCOUNT OF COPY OF THE SEIZED MATERIAL, INSPECTION TAKEN BY THE LD. A. R . ON THE BASIS OF INCRIMINATING DOCUMENTS, NO UNDISCLOSED INCOME CAN BE DETERMINED U/S. 158BD. MR. MAHENDRA H SHAH OF MADHUPURI GROUP HAD EXPIRED AND WHICH IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 4 COULD NOT BE CROSS EXAMINED. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD. A.O. HELD THAT THERE IS SUFFICIENT EVIDENCE TO FORM THE SATISFACTION FOR ISSUING NOTICE U/S. 158BD. THE STATEMENT OF SHRI MAHENDRA H SHAH CATEGORICALLY ADMITTED THAT HE HAS PROVIDED ACCOMMODATION ENTRY. IN REALITY, CASH WAS RECEIVED FROM VARIOUS PARTIES AGAINST WHICH LOAN EN TRIES WERE PROVIDED. THE CASH WAS NOT ENTERED IN THE REGULAR BOOKS OF ACCOUN T, WHICH WAS PROVIDED FOR ACCOMMODATION OF ENTRY. THE CROSS EXAMINATION OF S HRI MAHENDRA H SHAH OF MADHUPURI GROUP COULD NOT BE PROVIDED AS EXPIRED AN D ANOTHER PERSON SHRI HEMANT SHAH WAS ALSO NOT KNOWN. THE ASSESSEE HAD A LLOWED PHOTO COPY OF THE INCRIMINATING DOCUMENTS AND ALSO INSPECTION AND CLAIMED THAT DIRECTIONS GIVEN BY THE HONBLE ITAT VIDE ORDER DATED 23.11.20 07 HAD BEEN COMPLIED WITH. HE FURTHER ANALYZED THE SECTION 68 AND CASE LAW ON IT. AFTER CONSIDERING ALL SUBMISSIONS AND CASE LAWS, THE LD. A.O. HELD TH AT ASSESSEE HAD FAILED TO PROVE THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY TO THE ASSESSEE FIRM AND THE GENUINENESS OF THE TRANSACTION EVEN THE IDENTIT Y OF THE CREDITOR NOT KNOWN TO THE ASSESSEE. AS SUCH, IT IS HELD THAT THE FUND S ARE THE ASSESSEES OWN UNACCOUNTED FUNDS, INTRODUCED IN THE BOOKS AS CASH CREDITOR IN THE NAME OF VARIOUS PARTIES. THE POSSIBILITY RECYCLING OF FUND CANNOT BE RULED OUT. AS SUCH, THE PEAK OF UNACCOUNTED CASH INTRODUCED IN TH E FORM OF LOAN WAS BROUGHT TO TAX IN THE HANDS OF ASSESSEE AT RS.20,06 ,000/- IN A.Y. 1999-2000 AND RS. 34,13,905/- IN A.Y. 2000-01 UP TO THE DATE OF SEARCH, IN TOTAL RS. 54,19,905/-. THE LD. CIT(A) ALSO ALLOWED THE RELIE F OF RS.7,230/- AFTER THAT NET INCOME WAS DETERMINED AT RS.54,12,680/- BY THE A.O. IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 5 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO HAS DISMISSED THE APPEAL BY CONSIDERING THE ASSESSEES REPLY AND HELD AS UNDER: 2.7 THE CASE OF RAJENDRA SHI BREAKERS P.LTD. VS. A CIT WAS RELIED ON BY THE AR. IN THAT CASE, THE ITAT HAD RELIED ON TH E DECISION OF RUSHIL INDUSTRIES LTD. WHICH HAS ALREADY BEEN DISCUSSED. 2.8 THE CASES OF INTERNATIONAL STEEL CORPORATION VS . DCIT AND ACIT, CIRCLE-1, BHAVNAGAR VS. DHAN STEELS P. LTD. ARE REG ARDING THE ALLEGATION THAT CHEQUES FOR SALE PROCEEDS WERE OBTAINED BY PAY ING CASH. IN THE INSTANT CASE, IT IS NOT THE CASE OF THE DEPARTMENT THAT THE SALE PROCEEDS HAVE BEEN INFLATED BY SHOWING CHEQUES RECEIPTS AND PAYING CASH FOR THE SAME. IN THE INSTANT CASE THE ASSESSEE HAS BORROWE D MONEY, HENCE IT IS FOR THE ASSESSEE TO PROVE THAT THE LOANS ARE GENUIN E AND THE CREDITOR HAD THE CAPACITY TO ADVANCE SUCH LOANS. IN VIEW OF THE ABOVE, THE CONTENTIONS OF THE AR IS NOT CORRECT THAT THE AO HAS NOT FOLLOWED THE DECISIONS OF ITAT IS NO T CORRECT. THE DECISIONS AS POINTED OUT ABOVE ARE DISTINGUISHABLE ON FACTS. 2.9 THE SEARCH & SEIZURE OPERATIONS CARRIED OUT IN THE CASE OF MADHUPURI GROUP CLEARLY ESTABLISHED THE FACT THAT T HE CREDITORS OF MADHUPURI GROUP HAD NO CAPACITY TO ADVANCE SUCH LOA NS. THIS WAS ADMITTED BY LATE SHRI MAHENDRA SHAH. THE FACT THAT HIS ASSOCIATE SHRI HEMANT SHAH HAS NOW ABSCONDED ALSO INDICATES THE SA ME. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE CREDITORS OF THE APPELL ANT VIZ. THE ENTITIES OF MADHUPURI GROUP DID NOT HAVE THE CAPACITY TO ADVANC E LOANS TO THE APPELLANT AS HAS BEEN BROUGHT OUT BY THE FINDINGS D URING SEARCH. 2.10 THE AO HAS ELABORATELY DISCUSSED IN DETAIL THI S ASPECT AND ALSO THE JUDICIAL PRONOUNCEMENTS WHICH ALSO SUPPORT THE CONT ENTION THAT THE CREDITWORTHINESS OF THE CREDITOR HAS TO BE PROVIDED BY THE ASSESSEE. NEITHER DURING THE ASSESSMENT PROCEEDINGS NOR DURIN G THE APPELLATE PROCEEDINGS DID THE AR OF THE APPELLANT MAKE ANY EF FORT TO SUBSTANTIATE THE GENUINENESS OF THE LOANS RECEIVED FROM MADHUPUR I GROUP. HE HAS NOT IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 6 PRODUCED ANY EVIDENCE TO SUBSTANTIATE THE FACT THAT THE CONCERNS OF MADHUPURI GROUP HAD THE CAPACITY TO ADVANCE THE SAI D LOANS. 2.11 THUS, IT IS CLEAR THAT THE ACTION OF THE AO IN MAKING THE ADDITION ON ACCOUNT OF UNPROVED LOANS AND INTEREST AND COMMISSI ON THEREON IS JUSTIFIED. THE SAME IS HENCE CONFIRMED. 4. NOW, THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE ASSESSEE REITERATED THE ARGUMENT PUT FORTH BEFORE THE CIT(A) AND ARGUED THAT HONBLE ITAT HAD RESTORED BACK TO THE FILE TO THE A.O. WITH A CLEAR DIRECTION TO REFRAME THE ORDER IN THE LIGHT OF THE DIRECTIONS AS CONTAIN ED IN IT(SS)A NO.66/RJT/2004 OF 31.05.2005 IN CASE OF ETERNAL MOTORS PVT. LTD. VS. ACIT I.E. AFTER PROVIDING COPIES OF THE STATEMENT RECORDED AND ALSO PROVIDING OPPORTUNITY OF CROSS EXAMINATION. DURING THE COURSE OF ASSESSMENT PROCE EDING IN THE SECOND INNINGS, THE APPELLANT WAS SUPPLIED WITH THE COPY O F THE UNDATED DOCUMENT TITLED SATISFACTION U/S. 158BDIN THE MATTER OF GUJ ARAT SHIP BREAKING CORPORATION BHAVNAGAR. COPY OF THE STATEMENT OF S HRI MAHENDRA H SHAH WAS ALSO PROVIDED. COPY OF THE RELEVANT SEIZED MAT ERIAL WAS HOWEVER NOT MADE AVAILABLE AND ONLY A CURSORY INSPECTION OF THE PHOTOCOPIES OF THE SEIZED MATERIAL WAS ALLOWED TO THE LD. A.R. OF THE APPELLA NT. IT HAS BEEN ARGUED THAT THERE IS NO MENTION IN THE SEIZED MATERIAL THAT APP ELLANT HAD MADE ANY TRANSACTION EITHER THROUGH SHRI MAHENDRA H SHAH OR HIS ASSOCIATES. THEREFORE NOTICE IS ISSUED U/S.158BD MERELY ON CONJUNCTION AN D SURMISES. THE ADDITION HAD BEEN MADE IN BLOCK ASSESSMENT ON THE PRESUMPTIO N THAT THERE MUST BE CORRESPONDING CASH COMPONENTS INVOLVED WITH THEM. THE ASSESSEE HAS TAKEN DEPOSITS FROM SHRI MAHENDRA H SHAH AND HIS AS SOCIATES CONCERNED IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 7 M/S. MADHUPURI CORPORATION AND MADHUPURI METAL INDU STRIES PVT. LTD. WHICH HAS BEEN ACCEPTED IN F.YS. 1998-99 & 1999-2000 AND SAME HAD BEEN REPAID WITH INTEREST IN DUE COURSE OF TIME THEREAFTER. TH E TRANSACTIONS WERE THROUGH ACCOUNT PAYEE CHEQUE AT THE TIME OF ACCEPTING DEPOS ITS AND REPAYING THE DEPOSITS. THESE TRANSACTIONS WERE ACCOUNTED IN THE REGULAR BOOKS OF ACCOUNT. THE LD. A.O. COMPUTED PEAK ON THE BASIS OF SEIZED M ATERIAL AT RS.52,30,000/- BUT CORRESPONDING INTEREST EXPENDITURE AMOUNT TO RS .1,68,215/- HAD BEEN CLAIMED IN THE REGULAR BOOKS OF ACCOUNT ATTRIBUTABL E TO THE ABOVE TRANSACTIONS. THE LD. A.O. HAD NOT PROVIDED REASONABLE OPPORTUNIT Y OF BEING HEARD. THE LD. COUNSEL ALSO CHALLENGED THE SATISFACTION RECORDED B Y THE A.O. OF THE PERSON SEARCHED ON VARIOUS GROUNDS AND ALSO RELIED UPON VA RIOUS CASE LAWS. THE LD. A.O. HAD NOT ALLOWED CROSS EXAMINATION OF MAHENDRA H SHAH. THE ASSESSEE HAS DRAWN OUR ATTENTION ON PAGE NO.13 OF THE PAPER BOOK AND DEMONSTRATED THAT LOAN ACCEPTED FROM MADHUPURI CORPORATION AND M ADHUPURI METAL P. LTD. OF RS.10 LACS IN BOTH CASES. IT IS FURTHER ARGUED THAT NO ADDITION U/S.68 CAN BE MADE IN BLOCK ASSESSMENT BY RELYING UPON VARIOUS DE CISIONS OF VARIOUS HIGH COURTS AS PER PAGE NO.33 OF PAPER BOOK. HE FURTHER RELIED IN CASE OF ACIT, CIRCLE-1, BHAVNAGAR VS. DHAN STEELS PVT. LTD. IN IT (SS)A NO.120/RJT/2003, FOR NO BASIS IN BLOCK ASSESSMENT FOR THE ADDITION. I NTERNATIONAL STEEL CORPORATION VS DCIT IN IT (SS) NO. 111/RJT/2003, W HEREIN HONBLE D BENCH, AHMADABAD HAS HELD THAT LD. A.O. HAS NOT ISSUED ANY SUMMONS TO THE CREDITORS AND NO SPECIFIC MATERIAL ON RECORD SHO WED THAT THE ASSESSEE HAD IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 8 TAKEN ACCOMMODATION ENTRY OF LOAN FROM SHRI MAHENDR A H SHAH. HE FURTHER RELIED UPON HONBLE GUJARAT HIGH COURT DECISION IN CASE OF N.R. PAPER & BOARD LTD. & OTHERS VS. DCIT [1998] 234 ITR 733, WHEREIN IT WAS HELD THAT ADDITION UNDER REGULAR ASSESSMENT AS WELL AS BLOCK ASSESSMENT ON SIMILAR EVIDENCE IS AGAIN MADE IN REGULAR ASSESSMENT IS BAS ELESS. IN CASE OF RAJENDRA SHIP BREAKERS PVT. LTD. VS. ACIT IN IT(SS) A NO. 79/RJT/2004, WHEREIN LD. A.O. MADE ADDITION ON THE BASIS OF STAT EMENT OF SHRI MAHENDRA H SHAH, NO MATERIAL WAS FOUND DURING THE COURSE OF SE ARCH THAT THE ASSESSEE HAD ACTUALLY REALIZED THE SALE CONSIDERATION MUCH M ORE UPON THE STATEMENT RECORDED IN THE BOOKS OF ACCOUNT. EVEN THEREFORE, MAHENDRA H SHAH ALSO NOT SPECIFICALLY MENTIONED ABOUT THE NAME OF THESE ASSE SSEES WHICH MAY PROVE THAT THESE ASSESSEES WERE ENGAGED IN PROVIDING ACCO MMODATION ENTRY. THUS, IT WAS ARGUED THAT IN BLOCK ASSESSMENT NO ADDITION CAN BE MADE WITHOUT ANY INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE FROM THE PREMISE OF PERSON SEARCHED U/ S.132. AT THE OUTSET, LD. CIT D.R. VEHEMENTLY SUPPORTED THE ORDER OF CIT(A) A ND DREW OUT ATTENTION ON THE STATEMENT RECORDED DURING THE COURSE OF SEARCH SHRI MAHENDRA H SHAH WHO HAD CATEGORICALLY ADMITTED THAT HE HAD GIVEN AC COMMODATION ENTRY TO THE APPELLANT BY RECEIVING CASH IN ADVANCE AND ISSUING CHEQUE TO IT. THE SEIZED MATERIAL ALSO SHOWED THAT THE ASSESSEE HAD TAKEN CH EQUES FROM MAHENDRA H SHAH WHICH HAS NOT BEEN RECORDED IN THE REGULAR BOO KS OF ACCOUNT. THUS, THE LD. A.O. RIGHTLY COMPUTED UNDISCLOSED INCOME UNDER CHAPTER XIV B FOR BLOCK IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 9 PERIOD WHICH HAS BEEN CONFIRMED BY THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE APPELLANT RAISED ONLY ONE GROUND OF A PPEAL AGAINST ADDITION OF RS.54,19,905/- AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE LD. A.O. MADE THESE ADDITIONS ON THE BASIS OF STATEMENT RECORDED U/S.132(4) OF THE IT ACT OF SHRI MAHENDRA H SHAH WHO ADMITTED IN HIS STATEMENT DATED 09.12.1999 IN QUESTION NO.10 & 11 THAT HE WAS IN BUSINESS OF GIVI NG CHEQUE TO ANYONE AGAINST RECEIVING CASH AFTER DEDUCTING HIS COMMISSI ON. HE DID NOT MAKE ANY PURCHASE OF SCRAP FROM ANY SHIP BREAKERS. HE HAD G IVEN ONLY LOAN ENTRIES OR ISSUED CHEQUE AFTER RECEIVING CASH, WHICH HAS BEEN RETRACTED BY SHRI MAHENDRA H SHAH BEFORE THE DDIT, BHAVNAGAR WITHIN F EW DAYS FROM THE DATE OF SEARCH. THE IDENTICAL ADDITIONS WERE MADE IN CA SE OF DHAN STEELS PVT. LTD. (SUPRA), INTERNATIONAL STEEL CORPORATION (SUPRA) & ETERNAL MOTORS PVT. LTD. (SUPRA), WHERE CO-ORDINATE BENCH HAD DELETED THE AD DITIONS BY OBSERVING THAT NO MATERIAL HAS BEEN PLACED BEFORE THEM INDICATING THAT THE CONCERN MANAGED BY SHRI MAHENDRA H SHAH AND HIS ASSOCIATES HAD ISSU ED CHEQUE BY WAY OF LOAN TO THE TAX PAYER IN LIEU OF CASH. THE LD. A.O . MADE ADDITION IN SUSPICION WITHOUT BRINGING ANY MATERIAL ON RECORD TO SHOW THA T ASSESSEE HAD GIVEN CASH AND RECEIVED BACK THE CHEQUE AND HAD BEEN CHANNELIZ ED THE UNACCOUNTED INCOME THROUGH ACCOMMODATION ENTRY. THE ASSESSEE H AD SHOWN THESE LOANS IN THE REGULAR BOOKS OF ACCOUNT PAID THE INTEREST O N IT AND DEDUCTED TDS ACCORDINGLY. THEREFORE, WE DO NOT HESITATE TO REVE RSE THE ORDER OF THE CIT(A). IT(SS)A NO. 698/AHD/2010, BLOCK PERIOD 01.04.1989 T O 07.12.1999 PAGE 10 ACCORDINGLY, ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24.01.2014 SD/- SD/- ( KUL BHARAT) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA !0 !0 !0 !0 ' '' ' )1 )1 )1 )1 2!1/ 2!1/ 2!1/ 2!1/ / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )*%& / RESPONDENT 3. 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 1: )+ , , / DR, ITAT, AHMEDABAD 6. :<= >? / GUARD FILE. BY ORDER/ !0 !, @/ B , $