SHRI S.S. KAUSHAL,SHIMLA V. INCOME TAX OFFICER, WARD-1, SHIMLA

ITA 923/CHANDI/2025

AI Insights

The case involves appeals by Shri S. S. Kaushal, the proprietor of M/s Shiva Enterprises, against the orders of the Commissioner of Income Tax (Appeals), Shimla, concerning assessments made by the Assessing Officer under sections 143(3) read with section 148 of the Income Tax Act for the Assessment Years 2000-01 and 2002-03. The appeals were based on the grounds of excess funds available from previous years' assessments which could offset the additions made for the respective assessment years. The tribunal considered the financial records and the submissions made by both parties, leading to the decision to partly allow the appeals.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842075 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 10-08-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: . RANJIT KAUR LD.
• Assessee Lawyers: V. K. GULATI LD
• Keywords: Capital Gains
• Section: 143(3); 54

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकर अपील सं. / ITA No.922/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2000-01) & 2. आयकर अपील सं./ ITA No.923/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2002-03) Shri S. S. Kaushal Prop. M/s Shiva Enterprises 4-5, Meghna Complex, The Mall Shimla (HP) - 171001 बनाम/ Vs. ITO Ward-1 Railway Board Building The Mall Shimla - 171003 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ACAPK-5749-E (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. V. K. Gulati (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Sh. Dr. Ranjit Kaur (Addl.CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 12.02.2026 घोषणाकीतारीख /Date of Pronouncement : 24.02.2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Years (AY) 2000-01 and 2002-03 are directed against the common order of learned Commissioner of Income Tax (Appeals), Shimla [CIT(A)] dated 14-02-2020 in the matter of an assessment framed by Ld. Printed from counselvise.com 2 Assessing Officer [AO] u/s 143(3) r.w.s. 148 of the Act on 29-12-2004. The registry has noted delay of 71 days in the appeals which stand condoned. Having heard rival submissions, the appeal is disposed-off as under. The Ld. AR has pleaded for telescoping benefit which has been opposed by Ld. Sr. DR. 2. It emerges that the assessee was subjected to survey on 18-07- 2003. The assessee is stated to be engaged in various business activities under his proprietorship concern namely M/s Shiva Enterprises. It transpired that the assessee was not maintaining any books of accounts. The Ld. AO framed assessments from AYs 1999- 2000 to 2002-03 and determined income for each of these years. The assessee preferred further appeals wherein the appeal of the assessee was ultimately partly allowed by Ld. CIT(A) vide order dated 14-02-2020. Pursuant to the order of Ld. CIT(A), giving effect order has been passed by Ld. AO for 2000-01 & 2002-03 on 16-03-2020 which is placed on record. In AY 2000-01, Ld. AO has sustained addition of Rs.2,40,624/-. The capital gains addition has been restricted to the extent of Rs.28,544/-. In AY 2002-03, Ld. AO has made addition of Rs.9,26,322/- on account of purchase of vehicle, sustained addition of Rs.16,72,680/- for undisclosed income and capital gains addition has been restricted to Rs.3,72,566/-. Aggrieved, the assessee is in further appeals before us. 3. It could be seen that Ld. CIT(A), at para 8.1.4 of the impugned order, after considering remand findings, has worked out the funds availability with the assessee as under: - Printed from counselvise.com 3 Description 1999-2000 2000-01 2001-02 2002-03 Workout from above bank accounts 1175239 2486118 661380 4037347 Less : receipts of Hill Crest 471502 198094 238220 317267 Balance 703737 2288024 423160 3720080 Available funds as accepted 2047400 2047400 2047400 2047400 Balance -1343663 240624 -1624240 1672680 It is quite clear that the assessee has excess funds for Rs.13,43,663/- for AY 1999-2000. Therefore, the benefit of the same would certainly be available to the assessee. Therefore, the addition of Rs.2,40,624/- for AY 2000-01 stand deleted. Similarly the remaining surplus fund of AY 1999-2000 (Rs.13,43,663/- - Rs.2,40,624/- = Rs.11,03,039/-) and surplus fund for AY 2001-02 (Rs.16,24,240/-) would far exceed shortage of funds in AY 2002-03 for Rs.16,72,680/- as well as investment in purchase of vehicle for Rs.9,26,322/-. Therefore, the twin additions of Rs.16,72,680/- & Rs.9,26,322/- as sustained by Ld. AO in AY 2002-03 stand deleted. 4. So far as the addition of capital gain for Rs.3,72,568/- in AY 2002-03 is concerned, the assessee himself has worked out the same at Rs.2,72,568/- which has been accepted by Ld. CIT(A). However, the quantum has, inadvertently, been mentioned as Rs.3,72,568/- in the impugned order. Therefore, Ld. AO is directed to restrict the addition to the extent of Rs.2,72,568/- as computed by the assessee himself. The deduction u/s 54 could not be allowed since the assessee has failed to substantiate the same. This addition for AY Printed from counselvise.com 4 2000-01 does not require any interference on our part since the same has been computed by the assessee himself. 5. Both the appeals stand partly allowed. Order pronounced on 24th February, 2026. -Sd- -Sd- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated:24.02.2026 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "