Roselabs Ltd.,, Ahmedabad v. The Income tax Officer, Ward-5(3),, Ahmedabad

CO 139/AHD/2006 | 2002-2003
Pronouncement Date: 16-04-2010 | Result: Dismissed

Appeal Details

RSA Number 13920523 RSA 2006
Assessee PAN GHING1703K
Bench Ahmedabad
Appeal Number CO 139/AHD/2006
Duration Of Justice 3 year(s) 9 month(s) 20 day(s)
Appellant Roselabs Ltd.,, Ahmedabad
Respondent The Income tax Officer, Ward-5(3),, Ahmedabad
Appeal Type Cross Objection
Pronouncement Date 16-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 16-04-2010
Date Of Final Hearing 08-04-2010
Next Hearing Date 08-04-2010
Assessment Year 2002-2003
Appeal Filed On 26-06-2006
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM INCOME-TAX OFFICER WD 5(3) AHMEDABAD. V/S . ROSELABS LTD. 123/1 SAIJPUR GOPALPUR AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI ANAND MOHAN SR. DR RESPONDENT BY:- SHRI ASEEM THAKKAR CA O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) AND THE CROSS OBJECTION FILED BY THE ASSESSE E IN RESPONSE THERETO. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS :- 1. THE LD. CIT(A)-XI AHMEDABAD HAS ERRED IN LAW AND O N FACTS OF THE CASE IN DIRECTING THE AO TO ALLOW THE SET OFF O F BROUGHT FORWARD DEPRECIATION AND BUSINESS LOSS AGAINST THE ADDITION OF RS.23 84 525/- MADE U/S 69 OF THE ACT TRADING THE S AME AS INCOME FROM OTHER SOURCES. 2. THE LD. CIT(A)-XI AHMEDABAD HAS FURTHER ERRED IN L AW AND ON FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF R S.45 319/- BEING THE AMOUNT OF CENTRAL EXCISE DUTY PAID ON ILL ICITLY REMOVED GOODS. ITA NO.1081/AHD/2006 ALONG WITH C.O.139/AHD/2006 ASST. YEAR :2002-03 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-XI AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE AO TO THE ABOVE EXTENT. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF LD. CIT( A)-XI MAY BE SET ASIDE TO THE ABOVE EXTENT AND THAT OF THE AO BE FULLY RESTORED. 2. THE FACTS OF THE CASE ARE THAT CENTRAL EXCISE DE PARTMENT CARRIED OUT SEARCH OPERATION AT THE BUSINESS PREMISES OF THE AS SESSEE COMPANY ON 24.9.01. DURING THE COURSE OF SEARCH CERTAIN BOOKS OF ACCOUNT DOCUMENTS WERE SEIZED. ON THE BASIS OF THESE BOOKS OF ACCOUNT /DOCUMENTS CENTRAL EXCISE AUTHORITIES FOUND THAT ASSESSEE HAS ILLICITL Y MANUFACTURED INDIGOSOL DYES WEIGHING 1438.800 KG. VALUED AT RS.10 84 235/- AND VAT DYES WEIGHING 1703 KGS. VALUED AT RS.15 24 640/- WITHOU T ACCOUNTING FOR THE SAME IN THE CENTRAL EXCISE RECORD AND CLEARED THE S AME WITHOUT PAYMENT OF EXCISE DUTY. TOTAL EVASION OF EXCISE DUTY WAS WO RKED OUT AT RS.2 50 481/- (RS.1 04 087/- + RS.1 46 394/-) IN RE SPECT OF THESE TWO ITEMS. ON THE BASIS OF THESE FINDINGS THE AO INFERR ED THAT ASSESSEE HAD MADE PURCHASES OF RAW MATERIAL FOR MANUFACTURING IN DIGOSOL DYES AND VAT DYES AND AFTER MANUFACTURING THEY WERE SOLD OUT SIDE THE BOOKS. THUS THE TOTAL SALE VALUE OF THE GOODS ALLEGEDLY MANUFAC TURED OUTSIDE THE BOOKS OF ACCOUNT WAS WORKED OUT AT RS.15 24 640/- PLUS RS .10 84 235/- TOTALING TO RS.26 08 875/- HOLDING THAT ASSESSEE IS EARNING A GP RATE OF 5.63% ON SALES. THE VALUE OF UNACCOUNTED PURCHASES WAS WORKE D OUT AT RS.24 61 995/- AS UNDER :- VALUE OF FINISHED GOODS ILLICITLY REMOVED FROM THE PREMISES. RS.26 08 875 LESS: GROSS PROFIT @ 5.63% RS. 1 46 880/ - THE VALUE OF UNACCOUNTED PURCHASES RS.24 61 995/ - 3 SINCE IT PAID EXCISE DUTY ON THE ALLEGED ILLICIT MA NUFACTURING OF DYES IT WAS INFERRED BY THE AO THAT THERE IS UNACCOUNTED IN VESTMENT IN MANUFACTURE OF THESE DYES AND ACCORDINGLY A SUM OF RS.24 61 995/- WAS TREATED AS DEEMED INCOME OF THE ASSESSEE U/S. 69. 3. FURTHER ON THESE SALES THE AO WORKED OUT G.P. OF RS.2 24 650/- APPLYING G.P. RATE OF 8.61% BEING THE G.P. DECLARED THIS YEAR. 4. IN ADDITION THE AO TREATED THE SUM OF RS.45 319/ - BEING THE EXCISE DUTY PAID ON FINISHED GOODS TO THE CENTRAL EXCISE A UTHORITIES AS PENALTY AND DISALLOWED THE SAME U/S. 37(1). 6. THE ASSESSEE CLAIMED SET OFF OF LOSSES AGAINST T HIS DEEMED INCOME BUT AO DID NOT ALLOW THE SAME. 6. THE LD. CIT(A) HELD THAT IF AO IS APPLYING GP RA TE OF 8.61% FOR MAKING GROSS PROFIT ADDITION THEN THERE IS NO REASO N TO ADOPT G.P. RATE OF 5.63% FOR WORKING OUT UNACCOUNTED PURCHASES. HE AC CORDINGLY APPLIED GP RATE OF 8.61% AND WORKED OUT UNACCOUNTED PURCHAS ES AT RS.23 84 525/- AS AGAINST RS.24 61 995/- ADOPTED BY THE AO. 7. THE CIT(A) DELETED THE G.P. ADDITION ON THE GROU ND THAT SAID ADDITION HAS BEEN MADE MERELY ON PRESUMPTION. THE REVENUE IS NOT IN APPEAL AGAINST THIS DELETION. 8. REGARDING DELETION OF PENALTY OF RS.45 319/- THE CIT(A) HELD THAT IT IS IN THE NATURE OF TAX/DUTY PAID TO CENTRAL EXC ISE DEPARTMENT. IT DOES NOT HAVE A CHARACTER OF PENALTY. HE ACCORDINGLY DEL ETED THE ADDITION. 4 9. REGARDING AOS DECISION NOT TO ALLOW ADJUSTMENT OF BROUGHT FORWARD DEPRECIATION/BUSINESS LOSS AGAINST ADDITION U/S. 69 THE LD. CIT(A) HELD THAT THIS ADDITION WOULD BE INCOME FROM OTHER SOURCES AND HENCE BROUGHT FORWARD LOSSES/DEPRECIATION WOULD BE AVAILABLE FOR ADJUSTMENT AGAINST THIS ADDITION WHILE COMPUTING GR OSS TOTAL INCOME. 10. THE LD. DR IN RESPECT OF FIRST GROUND SUBMITTED THAT NO ADJUSTMENT OF ANY BROUGHT FORWARD LOSSES AND DEPRECIATION CAN BE ALLOWED. IN VIEW OF DECISION IN FAKIR MOHMAD HAJI HASSAN 247 ITR 290 (GUJ.). WHERE ADDITION IS MADE U/S.69 ON ACCOUNT OF UNEXPLAINED I NVESTMENT THEN THIS ADDITION CANNOT BE COVERED UNDER ANY HEAD AND IT HA S TO BE TAXED AS SUCH AS DEEMED INCOME AND THEREFORE THE SAME WILL NOT B E AVAILABLE FOR ADJUSTMENT AGAINST ANY BROUGHT FORWARD LOSSES OR BR OUGHT FORWARD DEPRECIATION. HE REFERRED TO THE HEAD-NOTES FROM TH AT JUDGEMENT AS UNDER:- THE SCHEME OF SECTIONS 69 69A 69B AND 69C OF THE INCOME-TAX ACT 1961 WOULD SHOW THAT IN CASES WHERE THE NATURE AND SOURCE OF INVESTMENTS MADE BY THE ASSESSEE OR THE NATURE AND SOURCE OF ACQUISITION OF MONEY BULLION ETC. OWNED BY THE ASSESSEE OR T HE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT EXPLAI NED AT ALL OR NOT SATISFACTORILY EXPLAINED THEN THE VALUE OF SUCH I NVESTMENTS AND MONEY OR VALUE OF ARTICLES NOT RECORDED IN THE BOOKS OF ACCO UNT OR THE UNEXPLAINED EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF SUCH ASSESSEE. IT FOLLOWS THAT THE MOMENT A SATISFACTORY EXPLANATION IS GIVEN ABOUT SUCH NATURE AND SOURCE BY THE ASSESSEE THEN THE SOURCE WOULD STAND DISCLOSED AND WILL THEREFORE BE KNOWN AND THE INCOME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME FOR ASSESSMENT AS PER TH E PROVISIONS OF THE ACT. WHEN THE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME UNDER SECTION 14 IT FOLLOWS THAT THE QUE STION OF GIVING ANY DEDUCTIONS UNDER THE PROVISIONS WHICH CORRESPOND TO SUCH HEADS OF INCOME WILL NOT ARISE. THE PROVISIONS OF SECTIONS 6 9 69A 69B AND 69C TREAT UNEXPLAINED INVESTMENTS UNEXPLAINED MONEY B ULLION ETC. AND UNEXPLAINED EXPENDITURE AS DEEMED INCOME WHERE THE NATURE AND SOURCE OF INVESTMENT ACQUISITION OR EXPENDITURE AS THE C ASE MAY BE HAVE NOT 5 BEEN EXPLAINED OR SATISFACTORILY EXPLAINED. THEREFO RE IN THESE CASES THE SOURCE NOT BEING KNOWN SUCH DEEMED INCOME WILL NOT FALL EVEN UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THEREFORE THE CO RRESPONDING DEDUCTIONS WHICH ARE APPLICABLE TO THE INCOMES UNDE R ANY OF THESE VARIOUS HEADS WILL NOT BE ATTRACTED IN THE CASE OF DEEMED INCOMES WHICH ARE COVERED UNDER THE PROVISIONS OF SECTIONS 69 69 A 69B AND 69C OF THE ACT IN VIEW OF THE SCHEME OF THOSE PROVISIONS : HELD _ ON THE FACTS THAT IT WAS CLEAR THAT WHEN THE INV ESTMENT IN OR ACQUISITION OF GOLD WHICH WAS RECOVERED FROM THE A SSESSEE WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE ASSESSEE O FFERED NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH INVESTMENT OR A CQUISITION AND THE VALUE OF SUCH GOLD WAS NOT RECORDED IN THE BOOKS OF ACCOUNT NOR THE NATURE AND SOURCE OF ITS ACQUISITION EXPLAINED THE RE COULD ARISE NO QUESTION OF TREATING THE VALUE OF SUCH GOLD WHICH WAS DEEMED TO BE THE INCOME OF THE ASSESSEE AS A DEDUCTIBLE TRADING LOS S ON ITS CONFISCATION BECAUSE SUCH DEEMED INCOME DID NOT FALL UNDER THE H EAD OF INCOME PROFITS AND GAINS OF BUSINESS OR PROFESSION. THER EFORE THE TRIBUNAL WAS PERFECTLY RIGHT IN HOLDING THAT THE VALUE OF TH E GOLD WAS LIABLE TO BE INCLUDED IN THE INCOME OF THE ASSESSEE AS THE SOURC E OF INVESTMENT IN THE GOLD OR OF ITS ACQUISITION WAS NOT EXPLAINED AND TH AT THE ASSESSEE WAS NOT ENTITLED TO CLAIM THAT THE VALUE OF THE GOLD SHOULD BE ALLOWED AS A DEDUCTION FROM HIS INCOME. 11. ON THE OTHER HAND THE LD. AR FOR THE ASSESSEE S UBMITTED THAT ABOVE DECISION CANNOT BE APPLIED ON THE FACTS OF THE PRES ENT CASE BECAUSE FACTS ARE DIFFERENT IN THE PRESENT CASE. HE SUBMITTED TH AT IN FAKIR MOHMAD HAJI HASSAN CASE THERE WAS A SEIZURE OF SMUGGLED GOLD AN D ASSESSEE HAS SOUGHT TO ADJUST UNEXPLAINED INVESTMENT IN SUCH GOL D AGAINST VALUE OF CONFISCATION OF CONFISCATED GOLD AS TRADING LOSS. NO TRADING LOSS OF THE SAME ITEM AS IN THE CASE OF FAKIR MOHMAD HAJI HASSA NS CASE HAS BEEN CLAIMED. THE LOSS IS BROUGHT FORWARD LOSS AND WHAT IS SOUGHT TO BE TAXED U/S.69 IS IN FACT BUSINESS INCOME. HE REFERRED TO T HE DECISION OF THIS BENCH IN M/S.FASHION WORLD VS. ACIT CIR.12 AHMEDABA D IN ITA NO.1634/AHD/06 FOR A.Y. 2002-03 ORDER DT.12-2-2010 WHEREIN IT IS HELD THAT IF THERE IS A POSSIBLE EXPLANATION OF UNACCOUN TED ASSET AND IF THE 6 SOURCE THEREOF THEN SUCH ASSET COULD NOT BE TAXED U /S.69 BUT COULD BE TAXED AS BUSINESS INCOME. SINCE THE STOCK OF THE I LLICIT MANUFACTURING WAS NOT AN IDENTIFIABLE ITEM BUT WERE PART OF A MIX ED AND COMMON PROCESS OF MANUFACTURING THEREFORE ASSET AS SUCH W AS NOT CLEARLY IDENTIFIABLE AND THEREFORE WHATEVER EXCESS STOCK R EVENUE IS SEEKING TO TAX WOULD BE ONLY BUSINESS INCOME AND IF THE DIFFERENCE IS TAXED AS ADDITIONAL BUSINESS RECEIPT THEN BROUGHT FORWARD LOSSES/DEPREC IATION WOULD BE ADJUSTED AGAINST SUCH ADDITION. 12. THE LD. AR FURTHER SUBMITTED THAT HONBLE GUJAR AT HIGH COURT IN THE CASE OF KRISHNA TEXTILES VS. CIT (2008) 220 CTR (GUJ.) 568 (2008) 174 TAXMAN 372 HELD THAT WHERE A SUM IS FOUND RECOR DED IN THE BOOKS OF ACCOUNTS OF THIRD PARTY IN THE NAME OF ASSESSEE AND IF IT IS PRESUMED THAT THIS SUM WAS PAID BY ASSESSEE THEN THEY WERE FOR PU RCHASES OF RAW MATERIAL AND ACCORDINGLY WOULD BE ALLOWABLE AS BUSI NESS EXPENDITURE U/S.37(1) AND THEREFORE ANY ADDITION U/S. 69C WOU LD BE NEUTRALIZED BY THE CLAIM OF SUCH BUSINESS EXPENDITURE. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. EVEN THOUGH THE AO HAS MADE THE ADDITION UNDER SECTION 69 PRESUMING THAT THE NATURE AND SOURCES OF THE INVEST MENT IN ASSET HAS NOT BEEN SATISFACTORILY EXPLAINED YET WE ARE OF THE VI EW THAT THERE IS AN EXPLANATION RELATING TO THE SOURCE OF INVESTMENT I. E. THE BUSINESS WHERE ADDITIONAL MANUFACTURING AND SALES WERE DETECTED BY CENTRAL EXCISE AUTHORITIES. UNLESS BOTH THE NATURE AND SOURCES REM AINED UNEXPLAINED ADDITION COULD NOT BE DIRECTLY COVERED UNDER SECTIO N 69. WHERE THE SOURCE IS EXPLAINED THEN INVESTMENT HAS TO BE RELATED BACK TO THAT SOURCE. IN THE PRESENT CASE SOURCE IS THE BUSINESS WHERE UNACCOUNT ED MANUFACTURING AND SALES WERE FOUND. THEREFORE THE ADDITIONAL SALES H AS TO BE CONSIDERED AS 7 ADDITIONAL BUSINESS INCOME. IN THE CASE OF FASHION WORLD ALSO REFERRED TO BY THE LD. AR IT HAS BEEN SIMILARLY EXPLAINED AS UN DER :- 12. THUS THE IMPORTANT ASPECT THAT EMERGES FROM TH E ENTIRE DISCUSSION IS THAT FOR INVOKING DEEMING PROVISIONS UNDER SECTI ONS 69 69A 69B & 69C THERE SHOULD BE CLEARLY IDENTIFIABLE ASSET OR E XPENDITURE. IN THE PRESENT CASE WE FIND THAT ENTIRE PHYSICAL STOCK OF RS.25 14 306/- WAS PART OF THE SAME BUSINESS. BOTH KIND OF STOCK I.E. WHAT IS RECORDED IN THE BOOKS AND WHAT WAS FOUND OVER AND ABOVE THE STOCK RECORDE D IN THE BOOKS WERE HELD AND DEALT UNIFORMLY BY THE ASSESSEE. THERE WAS NO PHYSICAL DISTINCTION BETWEEN THE ACCOUNTED STOCK OR UNACCOUN TED STOCK. NO SUCH PHYSICAL DISTINCTION WAS FOUND BY THE REVENUE EITHE R. THE ASSESSEE HAS REPEATEDLY CLAIMED THAT UNACCOUNTED BUSINESS INCOME IS INVESTED IN STOCK AND THERE IS NO AMOUNT SEPARATELY TAXABLE UNDER SEC TION 69. THE DEPARTMENT HAS IGNORED THIS CLAIM OF THE ASSESSEE A ND SOUGHT TO TAX THE DIFFERENCE BETWEEN BOOK-STOCK AND PHYSICAL-STOCK AS UNACCOUNTED INVESTMENT UNDER SECTION 69 WITHOUT CONSIDERING THE CLAIM OF THE ASSESSEE THAT FIRST THE BUSINESS RECEIPT HAS TO BE CONSIDERE D AND THEN INVESTMENT SHOULD BE TREATED AS COMING OUT OF SUCH UNACCOUNTED INCOME. THE DIFFERENCE IN STOCK SO WORKED OUT BY THE AUTHORITIE S BELOW HAD NO INDEPENDENT IDENTITY OF ITS OWN AND IT IS PART AND PARCEL OF ENTIRE LOT OF STOCK. THE DIFFERENCE BETWEEN DECLARED STOCK IN THE BOOKS AND WHAT IS PHYSICALLY FOUND WOULD ONLY BE A MATHEMATICAL EXPRE SSION IN TERMS OF VALUE AND NOT A SEPARATE INDEPENDENT IDENTIFIABLE A SSET. THEREFORE IT CANNOT BE SAID THAT THERE IS AN UNDISCLOSED ASSET E XISTED INDEPENDENTLY. ONCE THIS IS SO THEN WHAT IS NOT DECLARED TO THE DE PARTMENT IS RECEIPT FROM BUSINESS AND NOT ANY INVESTMENT AS IT CANNOT BE CO- RELATED WITH ANY SPECIFIC ASSET. 13. THUS IN A CASE WHERE SOURCE OF INVESTMENT/EXPEN DITURE IS CLEARLY IDENTIFIABLE AND ALLEGED UNDISCLOSED ASSET HAS NO I NDEPENDENT EXISTENCE OF ITS OWN OR THERE IS NO SEPARATE PHYSICAL IDENTIT Y OF SUCH INVESTMENT/EXPENDITURE THEN FIRST WHAT IS TO BE TAX ED IS THE UNDISCLOSED BUSINESS RECEIPT INVESTED IN UNIDENTIFIABLE UNACCOU NTED ASSET AND ONLY ON FAILURE IT SHOULD BE CONSIDERED TO BE TAXED UNDER S ECTION 69 ON THE PREMISES THAT SUCH EXCESS INVESTMENT IS NOT RECORDE D IN THE BOOKS OF ACCOUNT AND ITS NATURE AND SOURCE IS NOT IDENTIFIAB LE. ONCE SUCH EXCESS INVESTMENT IS TAXED AS UNDECLARED BUSINESS RECEIPT THEN TAXING IT FURTHER AS DEEMED INCOME UNDER SECTION 69 WOULD NOT BE NECE SSARY. THEREFORE THE FIRST ATTEMPT OF THE ASSESSING AUTHORITY SHOULD BE TO FIND OUT LINK OF UNDECLARED INVESTMENT/EXPENDITURE WITH THE KNOWN HE AD GIVE OPPORTUNITY 8 TO THE ASSESSEE TO ESTABLISH NEXUS AND IF IT IS SAT ISFACTORILY ESTABLISHED THEN FIRST SUCH INVESTMENT SHOULD BE CONSIDERED AS UNDECLARED RECEIPT UNDER THAT PARTICULAR HEAD. IT IS ONLY WHERE NO NEX US IS ESTABLISHED WITH ANY HEAD THEN IT SHOULD BE CONSIDERED AS DEEMED INC OME UNDER SECTION 69 69A 69B & 69C AS THE CASE MAY BE. IT IS BECAUS E WHEN ASSESSEE FAILS TO EXPLAIN SATISFACTORILY THE SOURCE OF SUCH INVEST MENT THEN IT SHOULD BE TAXED UNDER SECTION 69 69A 69B & 69C AS THE CASE MAY BE. IT SHOULD NOT BE DONE AT THE FIRST INSTANCE WITHOUT GIVING OPPORT UNITY TO THE ASSESSEE TO ESTABLISH NEXUS. THEREFORE THERE IS NO CONFLICT WI TH THE DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHMED HAJI HASAN (SUPRA) WHERE INVESTMENT IN AN ASSET OR EXPENDITURE IS NOT IDENTIFIABLE AND NO NEXUS WAS ESTABLISHED THEN WITH ANY HEAD OF INCOME AND THUS WAS NOT AVAILABLE FOR SET OFF AGAINST ANY LOSS UNDER ANY OT HER HEAD. THEREFORE WE HOLD THAT WHERE ASSET IN WHICH UNDECLARED INVESTMEN T IS SOUGHT TO BE TAXED IS NOT CLEARLY IDENTIFIABLE OR DOES NOT HAVE INDEPENDENT IDENTITY BUT IS INTEGRAL AND INSEPARABLE (MIXED) PART OF DECLARE D ASSET FALLING UNDER A PARTICULAR HEAD THEN THE DIFFERENCE SHOULD BE TREA TED AS UNDECLARED BUSINESS INCOME EXPLAINING THE INVESTMENT. 14. IN THE PRESENT CASE ALSO ONCE MANUFACTURING OF THE GOODS OUTSIDE THE BOOKS WAS DETECTED AND THEY WERE FOUND PART AN D PARCEL OF REGULAR MANUFACTURING AND INTER-MIXED WITHOUT HAVING SEPARA TE IDENTITY THEN IT COULD NOT BE SAID THAT SOURCES OF SUCH UNACCOUNTED PURCHASES OR SALES IS NOT EXPLAINED. PRIMA FACIE THE BURDEN OF THE ASSESS EE IS DISCHARGED AND ONUS IS SHIFTED TO THE REVENUE TO PROVE THAT THERE WAS UNDISCLOSED INFUSION OF CASH WHICH IS TO BE TAXED SEPARATELY UN DER SECTION 69. TILL THEN THE UNRECORDED AND INTERMIXED PURCHASES AND SA LES COULD ONLY BE TREATED AS EMERGING FROM BUSINESS AND THEREFORE I T IS TO BE TAXED AS UNACCOUNTED BUSINESS RECEIPT. ACCORDINGLY THEY WOU LD BE AVAILABLE FOR SET OFF AGAINST BROUGHT FORWARD LOSSES/DEPRECIATION . AS A RESULT THIS GROUND OF REVENUE IS REJECTED. 15. GROUND NO.2 RELATES TO ADDITION ON ACCOUNT OF P AYMENT OF ADDITIONAL EXCISE DUTY WHICH WAS TREATED AS PENALTY BY LD. AO. IN OUR CONSIDERED VIEW THE STAND TAKEN BY LD. CIT(A) IS CO RRECT. THE PAYMENT OF 9 RS.45 319/- IS IN THE NATURE OF DUTY AND NOT IN THE NATURE OF PENALTY. THERE IS ALSO FINDING BY THE AO THAT ASSESSEE HAS PAID AS ADDITIONAL EXCISE DUTY BUT HE INFERS THAT IT IS IN THE NATURE OF PENALTY. WE ARE UNABLE TO AGREE WITH THIS PROPOSITION AS THERE IS NO MATERIAL TO UP HOLD THIS VIEW. AS A RESULT THIS GROUND OF REVENUE IS ALSO REJECTED. 16. OTHER TWO GROUNDS ARE GENERAL IN NATURE AND THE Y NEED NO SPECIFIC ADJUDICATION HENCE REJECTED. 17. THE CROSS OBJECTION FILED BY THE ASSESSEE IS NO T PRESSED AND HENCE IT IS ALSO DISMISSED AS NOT PRESSED. 18. IN THE RESULT BOTH THE APPEAL FILED BY THE REV ENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DISMISSED. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 16.4.2010 MAHATA/- ORDER PRONOUNCED IN OPEN COURT ON 16/4/2010 10 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD