Chordiya Manoj Shantilal, v. ACIT, Cir-3, Nashik,

ITA 130/PUN/2007 | misc
Pronouncement Date: 31-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 13024514 RSA 2007
Assessee PAN ACPPC4344B
Bench Pune
Appeal Number ITA 130/PUN/2007
Duration Of Justice 3 year(s) 7 month(s) 6 day(s)
Appellant Chordiya Manoj Shantilal,
Respondent ACIT, Cir-3, Nashik,
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 31-08-2010
Assessment Year misc
Appeal Filed On 25-01-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 130/PN/2007 ( BLOCK PERIOD (1.4.1995 TO 27.12.2001 ) SHRI. CHORDIYA MANOJ SHANTILAL APPELLANT 1 & 2 GITASHREE APPTARTMENT CANADA CORNER NASHIK-5 PAN : ACPPC4344B VS. ACIT CENTRAL CIRCLE 3 R ESPONDENT GADKARI CHOWK NASHIK APPELLANT BY: SHRI KISHORE PHADKE RESPONDENT BY: SHRI A.S. SINGH ORDER PER D. KARUNAKARA RAO AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER OF THE CIT(A)-I NASIK DT. 30.11.2006 FOR THE BLOCK PERIOD 1.4.1995 TO 27.12.2001. 2. GROUND 1 RELATE TO ADDITION OF RS.1.75 LAKHS ON ACCOUNT OF CASH FOUND DURING THE SEARCH ON 27.12.2001 WHICH WAS H ELD AS UNACCOUNTED CASH BY THE A.O. DURING THE SEARCH ASSESSMENT PROC EEDINGS AS PER PARA 8.1 OF THE ORDER PASSED U/S. 158 BC ASSESSEE SUBMI TTED THAT THE ASSESSEE MAINTAINED THE BOOKS OF ACCOUNT TILL DATE OF THE SEARCH AND PRODUCED THE SAME DURING THE ASSESSMENT PROCEEDINGS AND THE IMPUGNED CASH WAS FULLY EXPLAINABLE. HOWEVER THE A.O DID N OT ACCEPT THE SAID SUBMISSION FOR THE REASON THAT THE SEARCH ACTION DI D NOT RESULT IN DISCOVERING THE IMPUGNED THE CASH BOOK AND THE ASSE SSEE FAILED TO PRODUCE THE BOOKS BEFORE THE INVESTIGATION WING. AG GRIEVED WITH THE ADDITION ASSESSEE FILED AN APPEAL BEFORE CIT(A)-I NASIK AND SUBMITTED THAT THE IMPUGNED CASH TALLIES WITH THE ENTRIES IN THE BOOKS OF ACCOUNT PAGE 2 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) WHICH WERE PRODUCED FOR VERIFICATION AND THE A.O DI D NOT FIND ANY DEFECT IN THE SAID BOOKS. THE COUNSEL ALSO RELIED ON THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES. IN THE RE MAND PROCEEDINGS A.O STATED THAT THE CASH BOOK FOR THE RELEVANT PERIOD W AS NOT AVAILABLE DURING THE TIME OF SEARCH AND IT WAS AN ADMITTED POSITION THAT THE BOOKS ARE MAINTAINED ONLY UPTO 31 ST MARCH 2001. FURTHER THE BOOKS PRODUCED BY THE ASSESSEE FOR VERIFICATION DURING THE ASSESSMENT PRO CEEDING SHOWING RELEVANT CASH ENTRIES ARE NOT ACCEPTABLE AS CREDIB LE BOOKS AS THEY ARE NOT AVAILABLE DURING THE SEARCH ACTION. CIT(A) DID NOT ACCEPT THE ASSESSEES SUBMISSIONS AND CONFIRMED THE ADDITION M ADE BY THE A.O. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A) ASSESS EE FILED THE IMPUGNED APPEAL WITH THE SAID GROUND. THE LD COUNSEL FOR TH E ASSESSEE ESSENTIALLY RELIED ON THE SUBMISSIONS MADE BY THE ASSESSEE DURI NG THE PROCEEDINGS BEFORE THE REVENUE AUTHORITIES. FURTHER HE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF MS. AISHARYA K. RAI 104 IT D 166 (TM) FOR THE PROPOSITION THAT THE BOOKS OF ACCOUNTS THOUGH NO FOUND DURING THE SEARCH WHEN SUBMITTED SUBSEQUENTLY SHOULD NOT BE R EJECTED WITHOUT FINDING DISCREPANCY IF ANY IN THE SAID CASH BOOK. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AND THE JUDGMENTS RELIED UPON BY THE COUNSE L. IT IS AN UNDISPUTED FACT THAT THE BOOKS OF ACCOUNTS ARE MAIN TAINED UP-TO 31 ST MARCH 2001. WITH REGARD TO THE CASH BOOK OR BOOKS PRODUCED BY THE ASSESSEE FOR THE PERIOD COMMENCING FROM 1.4.2001 TI LL THE DATE OF SEARCH ON 27.12.2001 THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE PRODUCED THE BOOKS FOR THE RELEVANT PERIOD AND THE AO DID NO T FIND FAULT WITH THE SAME. AS PER THE ASSESSEE IN SUCH CIRCUMSTANCE TH E BOOKS CANNOT BE REJECTED WITHOUT GIVING REASONS. IN THIS REGARD TH E ASSESSEES COUNSEL RELIED ON THE JUDGMENT IN THE CASE OF MS. AISHARYA K.RAI (SUPRA). WE HAVE PERUSED THE ORDERS OF THE REVENUE AND THE OTHER DOC UMENTS AVAILABLE BEFORE US. FURTHER WE HAVE ALSO PERUSED THE JUDGME NT IN THE CASE OF THE MS. AISHARYA K.RAI (SUPRA). CONSIDERING THE SAID JU DGMENT WE ARE OF THE OPINION THAT THE CASH BOOKS CANNOT BE REJECTED WITH OUT FINDING MISTAKES OR DISCREPANCIES IF ANY IN THE SAID CASH BOOK. T HUS THE ORDER OF THE CIT(A) HAS TO BE REVERSED ON THIS ISSUE. ACCORDINGL Y THE ASSESSEE SUCCEEDS ON THIS ISSUE. IN THE RESULT GROUND NO. 1 IS ALLOWED . PAGE 3 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) 4. THE SECOND ISSUE RELATES TO THE ADDITION OF RS. 4 00 000/- WHICH IS HELD AS UNACCOUNTED INVESTMENT. DURING THE ASSESSM ENT PROCEEDINGS IT IS SUBMITTED THAT THE SAID AMOUNT WAS PAID IN CONNE CTION WITH THE PURCHASE OF LAND ADMEASURING 3000 SQ.FT. AND THE SA ID TRANSACTION WAS DISCLOSED IN THE RETURN OF INCOME. THIS IS AN AMOU NT PAID BY THE ASSESSEE IN CASH TO SHRI PRAVIN TATHED. IN SO FAR AS THE SOU RCE OF THESE PAYMENT IS CONCERNED THIS AMOUNT HAS TWO COMPONENTS OF RS. 2. 5 LAKHS AND RS. 1.5 LAKHS. REGARDING THE SOURCE FOR THE SAID AMOUN T IT IS MENTIONED THAT RS. 2.5 LAKHS WAS RECEIVED BY THE ASSESSEE IN ADVAN CE IN CONNECTION WITH THE SALE OF A TANKER AND THE SAME CONSTITUTES PART OF PAYMENT OF RS. 4 00 000/-. IT WAS ALSO MENTIONED THAT RS. 1.5 LAKH S WAS OUT OF REALIZATION OF SALE OF HIS CAR (MARUTI ESTEEM). AFTER CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESEE A.O. REJECTED THE SAME AND AO WAS OF THE OPINION THAT THE SAID EXPLANATION IS UNACCEPTAB LE FOR THE REASON THAT ASSESSEE DID NOT FURNISH ANY PROOF FOR RECEIPTS OF THE SAID AMOUNTS FROM MR. MUDLIAR AND MR. RAO WHO PURCHASED TANKER AND CA R RESPECTIVELY. HE ACCORDINGLY MADE ADDITION OF RS. 4 00 000/-. AGGRI EVED WITH THE SAME ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE MENTIONED THAT THE TRANS ACTION OF PURCHASE OF THE IMPUGNED LAND IS BORNE OUT OF THE RETURNED INCO ME FOR THE A.Y. 1999- 2000 AND THEREFORE THE ISSUE IS OUTSIDE THE SCOPE OF THE SEARCH PROCEEDIINGS. DURING THE SEARCH PROCEEDINGS ASSES SEE SUBMITTED THE REQUISITE EXPLANATION REGARDING THE SOURCE OF SUM O F RS. 4 00 000/- ALSO. THE PAYER IE MR. MUDLIAR ALSO CONFIRMED THE PAYMENT OF RS.2.5 LAKHS FOR PURCHASE OF THE TANKER WHICH WAS PRIOR TO THE PURCH ASE OF THE LAND I.E. 4.8.2008. AS PER THE ASSESSEE THE DATE OF SALE OF THE CAR ALSO FALLS PRIOR TO THE PAYMENT OF RS. 4 LAKHS. DURING THE REMAND P ROCEEDINGS THE A.O HELD THAT THE DATE OF PAYMENTS FROM MR MUDLIAR AND MR. RAO FALL SUBSEQUENT TO THE PURCHASE TRANSACTION OF THE LAND. IT IS ALSO COMMENTED BY THE A.O THAT THE PAYMENTS MADE BY THE ASSESSEE WAS NOT DISCLOSED IN THE PERSONAL BALANCE-SHEET FILED WITH THE RETURN OF INCOME. IN THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ADD ITION HOLDING THAT THE ASSESSEE DID NOT FURNISH OR PRODUCE ANY MATERIAL TO PROVE THAT THE SAID PAYMENTS ARE REFLECTED IN THE RETURNS FILED PRIOR T O THE DATE OF SEARCH. AGGRIEVED WITH THE SAME ASSESSEE FILED THE APPEAL BEFORE US WITH THIS GROUND WHILE ASSESSEES COUNSEL RELIED ON THE SUBM ISSION MADE BY HIM PAGE 4 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) BEFORE THE REVENUE AUTHORITIES. ON THE OTHER HAND LD D.R. TRIED TO DEMONSTRATE THAT THE AMOUNT IN QUESTION WERE RECEIV ED BY THE ASSESSEE ON 28.8.98 AND 4.8.99; WHEREAS THE SALE CONSIDERATI ON OF RS. 4 00 000/- TO PRAVIN TATHED FOR LAND WAS PAID ON 4.8. 98. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. WE FIND THERE IS MISLEADING FACTS WITH REGARD TO PAYMENTS RECEIVED BY THE ASSESSEE FR OM MR. MUDLIAR AND MR. RAO IN CONNECTION WITH THE SALE OF THE TANKER A ND CAR RESPECTIVELY IE WHETHER THESE RECEIPTS FALL PRIOR TO THE PAYMENTS O F RS. 4 00 000/- OR OTHERWISE. FOR WANT OF CLARITY OF THE FACTS WE ARE OF THE OPINION THAT THIS HAS TO BE REFERRED TO THE FILE OF THE A.O. THE A.O IS DIRECTED TO GIVEN AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE F RESH PROCEEDINGS IN THIS REGARD. THE A.O SHALL DECIDE THE ISSUE AFTER C ONSIDERING THE FACT RELATING TO APPROPRIATION OF PROCEEDS RECEIVED FROM MR. MUDLIAR AND MR. RAO. IF THE SAID RECEIPTS ARE RECEIVED PRIOR TO TH E PURCHASE TRANSACTION OF LAND AND THEY WERE NOT ELSEWHERE APPROPRIATED WE F IND NO REASON WHY THE SAID AMOUNT SHOULD NOT BE CONSIDERED AS A SOURC E FOR PAYMENT OF RS. 4 LAKHS TO MR. PRAVIN TATHED. ON THE OTHER HAND I F THESE AMOUNTS ARE RECEIVED BY THE ASSESSEE SUBSEQUENT TO THE TRANSACT ION OF PURCHASE OF LAND LOGICALLY THE ONUS IS ON THE ASSESSEE AND TH E ASSESSEE HAS TO DEMONSTRATE WITH EVIDENCES AS TO HOW THESE AMOUNTS CONSTITUTE SOURCES FOR PAYMENT OF RS. 4 LAKHS. IT GOES WITHOUT SAYING THAT THE INITIAL ONUS IS ON THE ASSESSEE TO DEMONSTRATE THE ABOVE PARTICULAR S. IN SO FAR AS THE ASSESSEE CONTENTION FOR NOT TREATING THIS ISSUE AS SEARCH RELATED ONE WE FIND THAT THE ADDITIONS SINCE HAS SUPPORT OF THE SE IZED MATERIAL WE REJECT THIS PART OF THE ARGUMENT OF THE ASESSEES COUNSEL. WE DISTINGUISH THE DISCLOSURE OF PURCHASE TRANSACTION FROM THE NEED FO R DISCLOSURE OF SOURCE OF FUNDS FOR EXPLAINING RS 4 LAKHS OF INVESTMENT. ACCORDINGLY THIS PART OF THE GROUND IS SET ASIDE . 6. GROUND NO. 3 RELATES TO ADDITION OF RS. 1 18 333 /- ON ACCOUNT OF DIFFERENCE IN WORKING OR COMPUTATION OF CAPITAL GA INS. THIS ADDITION RELATES TO THE DIFFERENT METHOD OF CALCULATION OF C APITAL GAIN. RELEVANT FACTS AS EMANATING FROM PARA 8.5 OF THE ASSESSMENT ORDER READS AS UNDER: TOTAL CONSIDERATION OF 3000 SQFT CONSTRUCTED AREA SOLD TO PAGE 5 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) THANE JANATA SHAKARI BANK IS RS.61 39 650/-. THE AS SESSEES SHARE IS 2/3 RD AND ITS COMES TO 40 93 060/- LESS :COST OF ACQUISITION THE TOTAL COST OF 4000 SQFT CONSTRUCTED AREA IS RS.32 00 000/- AS MOU DATED 25.5.1996 THE COST OF 3000 SQFT COMES TO RS. 24 00 000/- THE ASSESSEES SHARE IS 2/3 RD AND HENCE HIS SHARE IN THE COST COMES TO RS. 16 00 000/-. HOWEVER IN ORDER TO GET 1/3 RD SHARE FROM SHRI PRAVEEN THATED AS AGAINST AMOUNT OF RS 2 83 333/- PAID BY SHRI PRAVEEN THATED OUT OF THE TOTAL COST OF RS.32 00 0 00/-. THUS THE ASSESSEE HAD PAID RS. 1 16 667/- AS THE ADDITIONAL COST FOR ACQUIRING SUCH 1/3 RD SHARE OF SHRI PRAVEEN THATED. AS THE AREA SOLD IS ONLY 2/4 THE PRORATE AMOUNT OF RS 87500/- (I.E. 75% OF RS.1 16 667) IS ALLOWABLE IN THE HANDS OF ASSESSEE . THUS THE TOTAL ALLOWABLE COST IN THE HANDS OF THE ASSESSEE IS RS 16 00 000 + 87 500 = RS 16 87 500/- COST OF TRANSFER AS SHOWN BY THE ASSESSEE RS 2 57 300/- 19 44 800 CAPITAL GAINS RS 21 48 260/- THUS THE CORRECT CAPITAL GAINS COMES TO RS 21 48 26 0/- AS AGAINST RS.20 29 927/- SHOWN BY THE ASSESSEE IN THE RETURN OF AY 1999-00. THUS THE ASSESSEE HAD UNDERSTATED THE CAPITAL GAIN S BY RS. 1 18 333/-. IN THE RETURN OF INCOME AY 1999-00 TH E ASSESSEE HAD GIVEN THE WORKING OF COST OF ACQUISITION BY ADOPTIN G WEIGHTED RATE IN RESPECT OF LOWER GROUND FLOOR AND UPPER GROUND F LOOR. HOWEVER THE SEIZED DOCUMENT AVAILABLE AT THE PAGES DISCUSSED ABOVE SHOW THAT NO SUCH DISTINCTION WAS MADE AT AN Y TIME IN THE AGREEMENTS MADE WITH M/S SBPL AND M/S THE THANE JAN ATA SAHAKARI BANK LTD. THUS THE SEIZED DOCUMENT HAVE SHOWN THAT THE ASSESSEE HAD UNDERSTATED THE CAPITAL GAINS IN THE R ETURN HENCE THE DIFFERENCE OF RS. 1 18 333/- IS TAXED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE AY 1999- 00. 7. AS SEEN FROM THE ABOVE A.O PERUSED CERTAIN SEIZ ED DOCUMENTS REFERRED TO PARA 8.5 OF THE ASSESSMENT ORDER THAT WEIGHTED RATE OF VALUATION FOR ARRIVING AT THE COST OF ACQUISITION I S NOT THE CORRECT WAY OF WORKING OUT COST OF ACQUISITION. HE ACCORDINGLY COMPUTED THE CORRECT CAPITAL GAINS AT RS. 2148260/- AS AGAINST RS. 20299 27/- DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. SEIZED PAPERS IN QUESTION ARE PAGE NOS. 93 TO 102 OF BUNDLE NO. A1 SEIZED FROM UTTAM A PARTMENT PREMISES . AGGRIEVED WITH THE SAME ASSESSEE FILED THE APPE AL BEFORE CIT(A)-I. DURING THE FIRST APPELLATE PROCEEDINGS ASSESSEE MADE THE FOLLOWING SUBMISSIONS. (I) TRANSACTION DISCLOSED AL ONG WITH ROI; (II) NO PAGE 6 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) MATERIAL TRANSACTION BROUGHT ON RECORD BY AO TO SHO W UDI; (III) DETAILED METHOD ADOPTED IN COMPUTING CAPITAL GAIN. WEIGHTED AVERAGE METHOD IS USED FOR COMPUTING COST OF SALE. AT THE END OF THE FIRST APPELLATE PROCEEDINGS CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O AND FOUND NO REASON TO INTERFERE WITH THE ORDER OF THE A.O WITH REGARD TO THE METHOD OF C OMPUTING THE CAPITAL GAINS. DURING THE PROCEEDINGS BEFORE US THE LD COUNSEL RELIED ON THE SUBMISSIONS MENTIONED IN THE ORDERS OF THE REVENUE. FURTHER HE HIGHLIGHTED THE FACT THAT THE SEIZED MATERIAL IS NOT INDICATING SUCH COMPUTATION AS ADOPTED BY THE A.O. D.R. FOR REVENUE ARGUED STATING THAT IN THE ABSENCE OF THE REASONS FOR DIFFERENTIAL VALUATION OF COST ACQUISITION OF DIFFERENT FLOORS THE WEIGHTED RATE OF COST OF ACQU ISITION CANNOT BE APPROVED. THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THE CLAIMS OF THE ASSESSEE WHICH HE FAILED TO DISCHARGE. 8. WE HAVE HEARD BOTH THE PARTIES AND ARE OF THE OP INION THAT ALL THE INFORMATION IN THE SEIZED DOCUMENTS HAVE TO BE GIVEN WEIGHTAGE AND THEY DO NOT INDICATE ANY DISTINCTION BETWEEN THE DIFFERENT FLOORS OF THE BUI LDING. THEREFORE WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY THE RELEVANT GROUND IS DISMISSED . 9. GROUND NO. 4 RELATED TO THE ADDITION OF RS. 8 41 500/- I.E. THE UNEXPLAINED INVESTMENT MADE BY WAY OF EXPENDITURE FOR SETTING U P OF NEW BUSINESS. THE RELEVANT FACTS ARE THAT SUCH RESULTED IN SEIZURE OF THE DOCU MENT AT PAGE NO. 6 OF BUNDLE NO. 16. THE A.O CONSIDERED THAT AS THE PAYMENTS TOWARDS EXP ENDITURE INCURRED IN CONNECTION WITH SETTING UP NEW BUSINESS. THE ENTRIES ON THE S AID SEIZED PAPER READS AS UNDER : 52500=00 SALVE ROKH (I.E.CASH) 10000=00 BHAGAT SAHEB 10000=00 MSEB SAHEB 2000=00 PHONE DEPOSITS 22500=00 LIGHT DEPOSITS 5 69 500=00 20000=00 CABLE VA LIGHT KHARCH 589500=00 5000=00 ROKH 594500=00 247000=00 HOTEL VA ETAR 841500=00' PAGE 7 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) 10. AS PER THE ASSESSEE THESE AMOUNTS CONSTITUTE ROUGH ESTIMATE AND NOT ACTUAL EXPENDITURE. THE SAID PAPER WAS NOT IN THE HANDWRI TING OF THE ASSESSEE ALTHOUGH IT IS FOUND IN THE POSSESSION OF THE ASSESSEE. ON CONSID ERING THE SUBMISSION OF THE ASSESSEE THE A.O MADE THE ADDITION GIVING THE FOLL OWING REASON : SINCE THIS PAPERS IS FOUND IN THE POSSESSION OF T HE ASSESSEE THE DOCUMENTS FOUND IN THE POSSESSION OF THE ASSESSEE THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH ACTION AS PER SECTION 132(4A) OF THE I.T. ACT 1961 SAME SHALL BE BELONGING TO THE ASSESSEE AND SAME SHALL B E DEEMED TO BE IN RESPECT OF THE TRANSACTIONS OF THE ASSESSEE. HE HAS ALSO NOT PROVED THAT THE SAID PAPER CONTAIN A MERE ESTIMATE. FROM THE ENTRIES MADE ON THIS PAPER NO.6 AND PAPER NO. 7 OF BUNDLE NO.16 IT IS CLEAR THAT PAYMENTS W ERE ACTUALLY MADE. ON PAGE NO.7 OF THE SAID BUNDLE SUMMARY HAS BEEN WRITTEN WH EREIN AGAINST THE FIGURE OF RS. 4 05 000/-. SALVE ROKH HAS BEEN WRITTEN AND TH E FIGURES OF CAPITAL INTRODUCED (I.E.BHANDWAL) ARE ALSO WRITTEN. IT IND ICATES THAT PAYMENT HAS ALREADY BEEN INCURRED BY THE ASSESSEE FR SETTING UP OF HIS BUSINESS AND IT IS NOT A MERE ESTIMATE AS STATED BY THE ASSESSEE. THE ASSESSEE H AS NOT EXPLAINED THE SOURCE FOR THE PAYMENTS OF RS. 8 41 500/-. THEREFORE THE AMOUNT OF RS. 8 41 500/- IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE FO R THE BLOCK PERIOD. 11. AGGRIEVED WITH THE SAME ASSESSEE FILED AN APPE AL BEFORE THE CIT(A) AND THE SUBMISSION IN BRIEF ARE: ESTIMATES ARE MERE CONJECT URES AND NOT IN ASSESSEES HANDWRITING; ROUND FIGURES CANNOT BE ACTUAL EXPEND ITURES BUT COULD BE AN ESTIMATE; ACTUAL TRANSACTION NOT FOUND; REPAYMENT OF RS. 10 8 00*29 INSTALLMENTS WAS WRITTENNO SUCH LOAN TAKEN AND HENCE IT IS AN ESTIMATE. DURING THE REMAND PROCEEDINGS THE A.O REITERATED THAT THE ONUS IS ON THE ASSESSEE AND HE HAS FAILED TO PROVE THAT THE SAID ENTRIES ARE MERE ESTIMATES. ON CONSIDERING THE ABO VE SUBMISSIONS AS WELL AS THE REMAND REPORT OF THE A.O THE CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O. AGGRIEVED WITH THE SAME ASSESSEE FILED THE PRESEN T APPEAL WITH THE SUBJECT GROUND ARGUING FOR RELIEF IN THIS REGARD. LD D.R. RELIED ON THE ORDERS OF THE REVENUE. AS PER THE DR THE SUMS ARE ACTUAL AMOUNTS INCURRED BY THE ASS ESSEE. AS PER HIM THE ASSESSEE FAILED TO DEMONSTRATE THAT THEY ARE MERE ESTIMATES. DR ARGUED STATING THAT THE ASSESSEE FAILED FILED THE LETTERS FROM PEOPLE SUCH SALVE BHAGAT MSEB SAHIB HOTEL VA ETAR ETC TO THAT EXTENT. THE AMOUNTS ARE ROUNDED OF F TO THE NEAREST HUNDREDS. ON THE OTHER HAND LD COUNSEL ARGUED VEHEMENTLY STATING TH AT THE KIND OF ENTRIES APPEARING ON THE ABOVE DOCUMENT SUGGEST THAT THEY ROUND SUM FIGU RES AND THEREFORE THEY ARE MERE ESTIMATES. 12. WE HAVE PERUSED THE IMPUGNED PAPER PAGE NO. 6 O F BUNDLE NO. 16 FOUND AT THE PREMISES OF THE ASSESSEE AND THE ENTRIES ARE QUALIF IED BY THE EXPRESSIONS ROCH PAGE 8 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) DEPOSITS AND KHARCH. THE ENTRIES ARE UNDISPUTE DLY SUGGEST THAT THEY ARE EXPENSES I.E. OUTFLOW TO THE ASSESSEE. FURTHER THE APPEARA NCE OF WORDS SUCH AS ROKH THE EXPRESSION REFERS TO THE MODE OF EXPENDITURE AND SU CH MODE IS KNOWN ONLY AFTER THE EXPENDITURE IS ACTUALLY INCURRED. IT IS ALSO THE FACT THAT THE PAPER IS FOUND IN THE PREMISES OF THE ASSESSEE AND THE ASSESSEE HAS NOT D EMONSTRATED THAT THE CONTAINS BE MERE ESTIMATES. IT IS EXPECTED THAT THE ASSESSEE SH OULD HAVE SUPPLIED TO THE AO RELATING TO WHO IS SALVE OR BHAGAT OR FIND OTHER MI NIMUM DETAILS BEFORE THE AO. IT IS NOT DONE BY THE ASSESSEE. THUS THE ASSESSEE FAILED TO D ISCHARGE THE ONUS IMPLIED AS PER SECTION 132(4) OF THE INCOME TAX ACT. THUS WE ARE OF THE OPINION THAT ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. THUS TH E RELEVANT GROUNDS ARE DISMISSED . 13. GROUND NO. 5 RELATES TO THE ADDITION OF RS. 3 1 5 000/- ON ACCOUNT OF CAPITAL LOSS. RELEVANT FACTS AND REASONS FOR MAKING ADDITION BY T HE A.O ARE GIVEN IN PARA 8.9 OF THE ASSESSMENT ORDER AND THE SAME IS REPRODUCED AS FOLL OWS :- 8.9 BOGUS SHORT TERM LOSS OF RS. 3 15 000/- THE PAGE NO 7 OF BUNDLE NO. A 93 SEIZED FROM THE RESIDENCE IS TH E AGREEMENT DATED 02.05.1998 BETWEEN SHRI MANOJ CHORDIA AND SHR I SHANTILAL CHORDIYA FOR THE PURCHASE OF FORD CAR BEARING NO MH-15-F 9633 FOR THE CONSIDERATION OF R S. 5 15 000/-. THE ASSESSEE HAS PURCHASED THIS CAR FROM SHRI SHANT ILAL CHORDIA. THE ASSESSEE HAS PAID RS. 1 00 000/- IN CASH BEFORE THE DATE OF AGREEMENT FROM TIME TO TIME AND BALANCE WAS TO BE PAID IN THREE MONTHS. AS PER PAGE NO 6 OF BUNDLE NO A-93 THE SAID VEHICLE WAS SOLD BY THE ASSESSEE WITHIN LESS THAN SIX MONTH S TO SHRI VIJAY TILLUMAL MANGANANI FOR RS.2 00 000/- VIDE AGREEMENT DATED 15.10.1998. AS PER THIS AGREEMENT DATED 15.10.1998 THE CHEQUE OF RS. 2 00 000/- WAS GIVEN BY SHRI VIJAY TILLUMAL MANGHANANI DIRECTLY TO SHRI SHANTILAL CHORDIYA THE FATHER OF THE ASSESSEE. THUS THE ASSESSEE HAS CLAIMED LOSS OF 3 15 000/- IN THIS TRANSACTION BEIN G THE DIFFERENCE BETWEEN PURCHASE COST OF RS. 5 15 000/- AND SALE PRICE OF RS. 2 00 000/-. THE ASSESSEE HAS CLAIMED CAPITAL LOSS OF RS. 3 15 000/- IN THE RETURN OF INCOME FOR ASSTT . YEAR 1999-2000. IN RESPECT OF THIS CAPITAL LOSS OF RS. 3 15 000/- THE SET OFF WAS CLA IMED AGAINST THE CAPITAL GAINS IN THE THE SHARES IN GALAS G-2 L-2 SOLD TO THE THANE JANATA SAHAKARI BANK LTD IN THE SAME YEAR. ON THE PERUSAL OF RETURN OF INCOME OF AY 99-2000 IT IS FOUND THAT THE ASSESSEE HAS SHOWN THE WORKING OF SUCH LOSS IN THE DETAILS OF FIXED ASSETS AND DEPRECIATION AS ON 31.3.1999. HOWEVER THE NAME OF THE PERSON FROM WHOM FORD CAR WAS PURCHASED AND THE DATE OF PURCHASE AND DATE OF SALE ARE NOT MENTIONED. IT IS FROM THE SEIZED DOCUMENTS THAT IT IS FOUND THAT THE CAR WAS PURCHASED BY THE ASSESSEE FROM HIS FATHER AND SOLD WITHIN THE PERIOD OF SIX MONTHS THE ASSESSEE WAS ASKED TO EXPLAIN THE REASON FOR SUCH TRANSACTION AND FOR THE PURCHAS E OF CAR AT SUCH HIGHER PRICE FROM HIS FATHER. THE AMOUNT OF RS. 2 15 000/- REMAINING PAY ABLE TO SHRI S.M. CHORDIYA IS SHOWN AS LIABILITY AND IT IS ADDED TO THE UNSECURED LOAN. THE ASSESSEE HAS NOT FILED ANY EXPLANATION IN THIS RESPECT. THE ASSESSEE HAS NOT EXPLAINED A S TO WHY THE CAR WAS PURCHASED AT HIGHER PRICE OR WHY IT WAS SOLD FOR LO W PRICE. HENCE LOSS OF RS 3 15 000/- CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FOR A.Y. 1999- 2000 IS TREATED AS BOGUS AND NOT GENUINE. SINCE TH E CORRECT NATURE OF THE TRANSACTION IS REVEALED BY THE SEIZED DOCUMENT THE AMOUNT OF RS. 3 15 000/- CLAIMED AS LOSS IN THE RETURN IS TREATED AS HIS UND ISCLOSED INCOME OF THE ASSESSEE FOR A YR. 1999-2000 FOR THE BLOCK-PERIOD. PAGE 9 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) 14. THUS THE A.O MADE ADDITION STATING THAT BUT FO R THE SEIZED DOCUMENT IT COULD NOT HAVE BEEN INFERRED THAT THE ASSESSEE PURCHASED THE CAR FROM HIS FATHER AT SUCH HIGH PRICE AND SOLD WITHIN SIX MONTHS FOR A LESSER PRICE AND GENERATED CAPITAL LOSS. FURTHER THE ASSESSEE FAILED TO OFFER ANY EXPLANATI ON TOO. AGGRIEVED WITH THE SAME ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND MADE THE FOLLOWING SUBMISSIONS : (I) SEIZED RECORDS SHOW TRANSACTION OF PURCHASE & SALE OF FORD CAR AND THEREFORE IT IS DISCLOSED TRANSACTION AND HENCE OUT SIDE THE SCOPE OF THE SEARCH ASSESSMENT; (II) TRANSACTION APPEARS IN REGULAR RETURN; (III) AGREEM ENTS FOR PURCHASE & SALE OF FORD CAR ENCLOSED WITH ROI; (IV) NO MATERIAL RECORD TO TRE AT TRANSACTION AS BOGUS. 15. DURING THE REMAND PROCEEDINGS A.O MADE THE VAR IOUS SUBMISSIONS WHICH ARE AS FOLLOWS: 1) REGULAR RETURN SHOWS THIS LOSS. HOWEVE R IN REGULAR RETURN NAMES OF THE PERSONS FROM WHOM FORD CAR PURCHASED ETC. NOT STAT ED. (II)THE CAPITAL LOSS WAS SET- OFF AGAINST THE CAPITAL GAIN OF SHARES SOLD TO SUY OJIT SANKUL. (III) ASSESSEE NOT EXPLAINED AS TO WHY THE CAR WAS PURCHASED AT HIGHER PRICE OR IT WAS SOLD AT LOW PRICE AND HENCE LOSS. ON CONCLUSION OF THE FIRST APPELLATE PROCEEDI NGS THE CIT(A) HELD THAT THE LOSS IN QUESTION IS BOGUS ONE AND NOT A GENUINE ONE. 16. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. FROM THE ABOVE EXTRACT IT IS EVIDENT THAT THE IMPUGNED CAR WAS ORIGINALLY SOLD BY THE FATHER OF THE ASSESSEE TO TH E ASSESSEE-SON FOR THE SUM OF RS 5.15 LAKHS AND THE SAME CONSIDERATION WAS NOT FULLY PAID . ASSESSEE SOLD THE CAR TO SHRI VIJAY TILLUMAL MANGANANI FOR RS.2 00 000/- VIDE AGREEMENT DATED 15.10.1998 IE WITH IN THE PERIOD OF 6 MONTHS. SRI MANGANANI PAID THE SUM TO ORIGINAL OWNER OF THE CAR AND TO TH E ASSESSEE. IT IS NOT KNOW IF THE CAR WAS REGISTERED AS PER THE PROCEDURE IN THE NAME OF THE ASSESSEE-SON AND SRI MANGANANI GIVING EFFECT TO THE RESPECTIVE SALE TRANSACTIONS. IT IS NOT KNOWN WHO IS THE USER OF THE CAR AT THE RELE VANT POINT OF TIME AND IF THE ASSESSEES FAMILY IS JOINT FAMILY SO FAR AS THE USE OF THE CAR IS CONCERNED. IT IS THE NEED OF THE ASSESSMENT THAT ALL THESE IMPORTANT AND BASI C FACTS HAVE TO BE BROUGHT ON TO THE RECORDS FOR CONCLUSIVELY DRAW AN INFERENCE THAT THE TRANSACTION IS BOGUS. FOR THIS PURPOSE WE REFER THE MATTER TO THE FILES OF THE AO WHO SHALL ADJUDICATE THE ISSUE AFRESH AFTER GRANTING REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ACCORDINGLY THIS PART OF THE GROUND ARE SET ASIDE. PAGE 10 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) 17. GROUND 6 RELATES TO ADDITION OF RS. 2 37 332/- BEING 30% OF THE UNACCOUNTED SALES OF RS. 6 03 428/- I.E. (80434/- + 522994/- = 6 03 428/-). THE DETAILS OF THE UNACCOUNTED SALES AS PER BUNDLE NO. 60 PERTAINING TO THE PERIOD 9.8.2000TO 15.9.2000 IS AS FOLLOWS : ITEM QUANTITY (LTRS) AMOUNT (RS) DIESEL 18325 3 01 198/- PETROL 10797 2 92 357/- OIL - 9 873/- TOTAL 6 03 428/- A.O. ESTIMATED THE 30% OF THE ABOVE UNRECORDED SALE S AS THE UNDISCLOSED INCOME OF THE ASSESSEE AND MADE THE ADDITION OF RS. 2 37 332/ - FOR THE A.Y. 2001-02 OF THE BLOCK PERIOD. DURING THE FIRST APPEAL THE ASSESSEE MADE VARIOUS SUBMISSIONS WHICH ARE AS FOLLOWS: (I) 30% RATE APPLIED BY ASSUMING ADULTERA TION BASED SALES; (II) THE REASON GIVEN BY THE AO AS BASE FOR ADDITION IS PURELY HYPO THETICAL; (III) ASSESSEE PLEADED FOR LOWER RATE AS THE RATE CHARGED IS MUCH HIGHER. 18. DURING THE REMAND PROCEEDINGS THE A.O RE-ITERA TED THAT THE SAID UNACCOUNTED SALES RELATE TO TRIMBAKESHWAR PETROLEUM AND RATE AD OPTED BY THE A.O AT THE RATE OF 30% IS FAIR BUT ON CONSIDERING THE ABOVE SUBMISSIONS OF BOTH THE ABOVE PARTIES THE CIT(A) HELD 20% OF THE UN-RECORDED SALES IS FAIR AND ACCORDINGLY GAVE A PART RELIEF OF RS.52 299/- TO THE ASSESSEE. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AND THE PAPER BOOKS CITED IN THIS REGARD. ISSUE FOR ADJUDIC ATION RELATES TO IF THE ESTIMATION OF THE PROFITS @ 20% OF THE IMPUGNED SALES CONSTITUTES FAI R OR NOT. CIT(A) FIXED THE SAME AS FAIR ESTIMATION ON CONSIDERING THE FACT OF HIGHER P ERCENTAGE OF PROFITS IN THE CASE OF THE STOCK WITH ADULTERATION. ON CONSIDERING THE FACT T HAT THE FACT OF ADULTERATION IS NOT UNDISPUTED CONCLUSIVELY BY THE ASSESSEE WE ARE OF THE OPINION THAT THE ORDER CIT(A) DOES NOT CALL FOR INTERFERENCE IN THIS REGARD. ACCO RDINGLY THIS PART OF THE GROUND IS DISMISSED . 20. GROUND NO. 7 RELATE TO SET OFF OF THE MISCELLA NEOUS DISCREPANCIES THAT MAY COME UP DURING THE ASSESSMENT PROCEEDINGS AGAINST THE BU FFER DISCLOSURE OF RS. 12 77 215/-. ON FACTS ASSESSEE MADE OWN DECLARATION OF RS. 16 0 6 500/- IN THE BLOCK RETURN OF INCOME UNDER THE NARRATION CONTINGENCIES THE ERRO R IF ANY. CIT(A) GRANTED BENEFIT OF TELESCOPY AGAINST DECLARATION TO THE EXTENT OF RS. 3 29 285/-. NOW ASSESSEE WANTS THE PAGE 11 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) BALANCE OF RS. 12 77 215/- TO BE CONSIDERED FOR SET OFF AGAINST THE ABOVE ADDITION IF ANY CONFIRMED BY THE CIT(A) OR BY THE TRIBUNAL. I N THIS REGARD THE COUNSEL SUBMITTED BEFORE US THAT THE SAID AMOUNT WAS DISCLOSED ESSENT IALLY TO TAKE CARE OF CONTINGENCIES LIKE THE ONES CONFIRMED BY THE APPELLATE AUTHORITI ES. THE SAID DEMAND WAS NOT ALLOWED BY THE A.O STATING THAT - ADDITION ON THIS COUNT MAY BE SET OFF AGAINST OTH ER UNDISCLOSED INCOME. HOWEVER ASSESSED UNDISCLOSED INCOME OUGHT NOT TO B E LESS THAN RETURNED UNDISCLOSED INCOME. 21. THE FINDING OF THE CIT(A) IN THIS REGARD IS THA T THE ADDITIONS MADE IN GROUND NO. 4 AND 5 SHALL EXHAUST THE BALANCE AND CONFIRM THE BALANCE OF RS. 1 20 715. THE FINDINGS OF THE CIT(A) AS GIVEN IN PARA NO. 10.4 AND 10.5 ARE AS UNDER : 10.4 HOWEVER THE REQUEST OF THE APPELLANT FOR GR ANTING BENEFIT OF TELESCOPING/SET-OFF WARRANTS CONSIDERATION. THE A .O. HAS ALSO ACCEDED TO THE SAME VIDE HIS REMAND REPORT. THE NARRATION OF THE DISCLOSURE OF RS. 16 06 500/- INDICATES THE ANTICIPATION OF THE APPELLANT OF POSS IBLE ADDITIONS THAT THE DEPARTMENT MIGHT BE ABLE TO MAKE FURTHER VERIFICATI ON OF THE SEIZED DOCUMENTS DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS A ND SUCH DECLARATIONS WOULD FUNCTION AS A SAFEGUARD. ON THE CAREFUL CONSIDERAT ION OF THE ABOVE I AM OF THE OPINION THAT THE APPELLANT DESERVES SET-OFF OF THE SAID DECLARATION AGAINST THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSE D INCOME. 10.5 IN THE GROUND NO. 17 WHICH IS AN OFF SHOOT OF GROUND NO. 16 IT IS STATED BY THE APPELLANT THAT THE A.O IS NOT JUSTIFIED IN NOT TELESCOPING THE ADDITIONS MADE ON ACCOUNT OF INCOME OR BOGUS LOSS WITH THE IN VESTMENTS/PAYMENTS ETC. IT IS STATED FURTHER THAT THE A.O HAS ERRED IN NOT GI VING SET OFF OF THE SAME AGAINST THE ADDITION MADE BY HIM ON ACCOUNT OF INVESTMENT. THE STATEMENT OF THE APPELLANT IS NOT SPECIFIC. HOWEVER KEEPING IN MIN D THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE I DIRECT THE A.O TO SET OFF (I) THE ADDITION OF RS. 8 41 500/- ON ACCOUNT OF EXPENDITURE INCURRED FOR SETTING UP OF THE APPELLANTS BUSINESS (PARA 8.6 OF THE ASSESSMENT ORDER) AND (I I) BOGUS SHORT TERM LOSS OF RS.3 15 000/- ON SALE OF FORD CAR (PARA 8.9 OF THE ASSESSMENT ORDER) AGAINST THE BALANCE DECLARATION OF RS. 12 77 215/- BY THE APPEL LANT IN THE BLOCK RETURN UNDER NARRATION CONTINGENCIES ERRORS AND OMISSIONS IF ANY. THE APPELLANT GETS A RELIEF OF RS. 11 56 500/- (8 41 500 + 3 15 000). H OWEVER IT MAY BE MENTIONED THAT TOTAL INCOME SO COMPUTED SHOULD NOT BE BELOW T HE RETURNED INCOME AFTER ALLOWING SUCH RELIEF. THE GROUNDS NOS 16 AND 17 STAND PARTLY ALLOWED. 22. FROM THE ABOVE IT IS EVIDENT THAT THE CIT(A) HAS GRANTED TELESCOPING FACILITIES AND WE FIND NO REASON TO INTERFERE WITH THE SAME. ACCORDINGLY THIS PART OF THE GROUNDS IS DISMISSED . 23. GROUND NO. 8 RELATES TO LEVY OF INTEREST OF RS. 43 136/- U/S. 158BFA(1) OF THE ACT. DURING THE FIRST APPELLATE PROCEEDINGS ASSES SEE PRAYED THAT THE INTEREST IS NOT LEVIABLE AS ASSESSEE FILED THE RETURN OF INCOME WI THIN THE EXTENDED PERIOD OF 45 DAYS. PAGE 12 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) CONSIDERING THE FACT THAT THE ACT DOES NOT PROVIDE FOR FILING THE RETURN IN THE EXTENDED PERIOD THE CASE OF THE ASSESSEE ATTRACTS LEVY OF I NTEREST U/S. 158BFA(1) OF THE ACT. THE CIT(A) CONFIRMED THE PENALTY BY STATING THAT THE PR OVISIONS ARE CLEAR ABOUT THE LEVY OF INTEREST IN CASE IF THE RETURN IS FURNISHED AFTER EXPIRY OF THE PERIOD SPECIFIED IN THE NOTICE. RELEVANT PARA IN THIS REGARD ARE PARA 13 & 13.1 WHICH READ AS UNDER : 13. THE GROUND NO. 20 RELATES TO LEVY OF INTEREST U/S 158BFA(1) OF THE I.T. ACT 1961. IT IS STATED BY THE APPELLANT THAT THE A.O IS NOT JUSTIFIED IN LEVYING INTEREST WHEN THE A.O. HIMSELF ADMITTED IN THE ORD ER THAT THE EXTENSION OF 20 DAYS WAS ALLOWED TO THE APPELLANT FOR FILING OF THE RETURN AND WHEN THE RETURN OF INCOME FOR THE BLOCK PERIOD IS FILED WITHIN 45 DAYS FROM THE DATE OF SERVICE OF NOTICE U/S 158BC OF THE I.T. ACT. 13.1 THE NOTICE U/S 158BC DATED 10.05.2002 WAS SERV ED ON THE ASSESSEE ON 21.05.2002 REQUIRING THE APPELLANT TO FILE THE RET URN WITHIN 25 DAYS. IN TERMS OF THE SAID NOTICE THE RETURN WAS DUE ON OR BEFORE 1 5.06.2002. THE RETURN WAS FILED ON 01.07.2002. THE PROVISIONS OF SECTION 158 BFA(1) ARE FREE FROM AMBIGUITY ACCORDING TO WHICH THE APPELLANT SHALL B E LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE AND ONE-FOURTH PERCENT IF THE R ETURN IS FURNISHED AFTER THE EXPIRY OF THE PERIOD SPECIFIED IN SUCH NOTICE. THE EXTENSION GRANTED BY THE A.O. IS IMMATERIAL AS TO THE LEVY OF INTEREST U /S 158BFA(1). ON PERUSAL OF RECORDS IT IS SEEN THAT THE A.O HAS LEVIED INTERES T STRICTLY WITHIN THE PROVISIONS OF SECTION 158BFA(1) OF THE I.T. ACT. HENCE I SEE NO INFIRMITY IN THE MATTER. THE LEVY OF INTEREST IS CONFIRMED. HOWEVER THE A.O IS DIRECTED TO RECALCULATE THE INTEREST ON GIVING EFFECT TO THIS ORDER. 24. THE PROVISIONS OF SECTION 158BFA(1) MENTIONS T HAT WHERE THE RETURN OF TOTAL INCOME AS REQUIRED BY THE A NOTICE UNDER CLAUSE (A ) OF SECTION 158BC IS FURNISHED AFTER THE EXPIRY OF THE PERIOD SPECIFIED IN SUCH NOTICE . THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PE RCENT OF THE TAX ON UNDISCLOSED INCOME DETERMINED UNDER CLAUSE (C) OF SECTION 15 8 BC . IT IS TRUE THE RELEVANT PROVISIONS IE THE PERIOD SPECIFIED IN SUCH NOTICE ARE FREE FROM AMBIGUITY WHEN THE LITERAL INTERPRETATION IS CONSIDERED. BUT IN THE INSTANT CASE THE AO HAS EXTENDED THE PERIOD SPECIFIED IN SUCH NOTICE AND SUCH EXTENSION IS GIVEN BY THE AO AFTER DUE CONSIDERATION OF THE REASONS MENTIONED BY THE ASSES SEE . IN THESE CIRCUMSTANCES THE EXTENDED DATE SHALL REPLACE THE EARLIER DATE SPE CIFIED OR PERIOD SPEICIFED IN THE SAID NOTICE. CONSEQUENTLY THE ORDER OF THE CIT(A) HAS T O BE REVERSED ON THIS ISSUE AND THE ASSESSEE IS ENTITLED TO RELIEF. THUS THE RELEVAN T GROUNDS ARE ALLOWED . PAGE 13 OF 13 ITA NO.130/PN/2007 SHRI CHORDIYA MANOJ SHANTILAL (BLOCK PERIOD 1.4.95 TO 27.12.01) 25. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST AUG UST 2010. SD/- SD/- ( I.C. SUDHIR) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 31ST AUGUST 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- I NASHIK 4. THE CIT- (CENTRAL) NASHIK 5. THE D.R B BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE