Shri Deven Dineshbhai Sanghvi,, RAJKOT-GUJARAT v. The Income Tax Officer (OSD), Range-1,, RAJKOT-GUJARAT

ITA 259/RJT/2011 | 2005-2006
Pronouncement Date: 25-11-2011 | Result: Allowed

Appeal Details

RSA Number 25924914 RSA 2011
Bench Rajkot
Appeal Number ITA 259/RJT/2011
Duration Of Justice 5 month(s) 18 day(s)
Appellant Shri Deven Dineshbhai Sanghvi,, RAJKOT-GUJARAT
Respondent The Income Tax Officer (OSD), Range-1,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-11-2011
Date Of Final Hearing 14-11-2011
Next Hearing Date 14-11-2011
Assessment Year 2005-2006
Appeal Filed On 07-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.259/RJT/2011 (ASSESSMENT YEAR 2005-06) DEVEN DINESHBHAI SINGHVI VS THE ITO (OSD) SANJAY & CO RANGE-1 RAJKOT PREMJEES FIRST FLOOR RAJPUT PARA MAIN ROAD RAJKOT PAN : AKWPS679D (APPELLANT) (RESPONDENT) DATE OF HEARING : 21-11-2011 DATE OF PRONOUNCEMENT : 25-11-2011 APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY : SHRI CJ MANIAR O R D E R PER AL GEHLOT (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) GANDHIDHAM AHMEDABAD DATED 07-04-2011 FOR THE ASSESSMENT YEAR 2005-06. 2. THE GROUND RAISED IN THIS APPEAL PERTAIN TO ADDI TION OF RS.4 29 517 MADE U/S 69A OF THE ACT. ITA NO.259/RJT/2011 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM RENT BANK INTEREST ETC. DURING THE ASSESSME NT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT CASH BALANCE AS ON 3 1 ST MARCH 2005 IN THE CASH BOOK PRODUCED BEFORE HIM WAS RS.7 50 000 WHERE AS AS PER THE BALANCE-SHEET THE CASH BALANCE AS ON 31 ST MARCH 2005 WAS REFLECTED AT RS.3 20 483.31. THE ASSESSING OFFICER ASKED THE AS SESSEE TO EXPLAIN THE DIFFERENCE. THE ASSESSEE FILED REPLY VIDE LETTER D ATED 04-12-2007 ALONG WITH COPY OF CASH BOOK AS AT 31 ST MARCH 2005 IN WHICH CASH BALANCE WAS SHOWN AT R.3 20 483.31. THE ASSESSING OFFICER MADE ADDITION OF THE DIFFERENCE AMOUNTING TO RS.4 29 517 ON THE GROUND T HAT THE ASSESSEE HAS FAILED TO PRODUCE SUPPORTING EVIDENCE. THE CIT(A) CONFIRMED THE SAID ADDITION ON THE GROUND THAT THE ASSESSEE DID NOT SU BMIT ANYTHING ON THE ISSUE AS TO WHY THE ASSESSEE HAD NOT REFUTE TO THE NOTINGS IN THE ORDER SHEET WHEN HE SIGNED THE ORDER SHEET AND THAT THE A SSESSEE HAD RELIED ON THE AUDITED ACCUN5S FOR PROVING HIS CLOSING BALANCE BUT THAT WAS THE VERY BASIS OF ALLEGATION. THE BALANCE AS PER BOOKS WHEN PRODUCED SHOULD MATCH THE BALANCE IN THE AUDITED ACCOUNTS. FURTHER AGGRIEVED THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE PART IES RECORD PERUSED. THE CASE OF THE REVENUE IS THAT AS PER THE CASH BOO K PRODUCED BEFORE THE ASSESSING OFFICER THE CASH BALANCE AS ON 31-03-200 5 WAS RS.7 50 000 ITA NO.259/RJT/2011 3 WHEREAS AS PER THE BALANCE SHEET IT WAS RS.3 20 483 .31. THE ASSESSING OFFICER STATED THAT THE AASSESSEE HAS FAILED TO PRO DUCE SUPPORTING EVIDENCE. THE CIT(A) STATES THAT THE BALANCE AS PE R BOOKS WHEN PRODUCED SHOULD MATCH WITH THE AUDITED ACCOUNTS. T HE SUBMISSION OF THE LD.AR THAT THIS FACT NOTED BY THE CIT(A) IS INCORRE CT AS THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS NOT SUBJECTED TO ANY AUDIT. AF TER HEARING THE LD.DR WE FIND THAT WHEN THE ASSESSEE PRODUCED CASH BOOK S HOWING CASH BALANCE OF RS.7 50 000 AS ON 31 ST MARCH 2007 AT THE VERY SAME MOMENT THE ASSESSING OFFICER HAD TO POINT OUT THE CORRESPO NDING ENTRY OR ITEM FROM THE CASH BOOK PARTICULARLY WHEN THE ASSESSEE HAS CA RRIED FORWARD THE CASH BALANCE AS ON 01 ST APRIL 2005 AS THE OPENING CASH BALANCE OF THE SUBSEQUENT ASSESSMENT YEAR SHOWING IT AT ONLY RS.3 20 483.31. IN THE ABSENCE OF SUCH CATEGORICAL FINDING IT CANNOT BE H ELD THAT IN FACT THE CASH BALANCE IN THE CASH BOOK WAS RS.7 50 000. MERELY M AKING ENTRY IN THE ORDER SHEET BY THE ASSESSING OFFICER IS NOT SUFFICI ENT. THE ASSESSING OFFICER HAS TO APPLY THE CORRECT PRINCIPLE OF ACCOUNTANCY A ND MUST HAVE TO PUT ON RECORD WITH SPECIFIC CORRESPONDING DIFFERENTIAL AMO UNTS IN THE CASH MAINTAINED BY THE ASSESSEE AND BOOK BEFORE HIM. IT IS SETTLED PRINCIPLE OF ACCOUNTANCY THAT WHEN THE CASH BALANCE AS ON 31 ST MARCH 2005 IS RS.7 50 000 AND THE ASSESSEE HAS REDUCED THIS AMOUN T TO RS.3 20 483.31 WHILE FILING THE RETURN OF INCOME IN THE BALANCE-SH EET THE CORRESPONDING CREDIT ENTRIES OF THE TRANSACTION ARE BOUND TO BE R EDUCED THERE IS NO SUCH ITA NO.259/RJT/2011 4 FINDING ON RECORD. IN ADDITION TO ABOVE WE FIND TH AT UNDER THE CIRCUMSTANCES OF CASE SECTION 69A IS NOT APPLICABLE AS CONDITION LAID DOWN FOR APPLICATION OF THAT SECTION ARE NOT SATISFIED. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY M ONEY BULLION JEWELLERY OR OTHER VALUABLE WHICH IS NOT RECORDED IN BOOKS OF ACCOUNT. IN THE LIGHT OF ABOVE DISCUSSION WE ARE OF THE CONSIDERED VIEW THAT ADDITION OF RS.4 29 517/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE CIT(A) U/S 69A FO THE ACT CANNOT BE UPHELD. THEREFORE WE DELETE THE ADDITION. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-11-2011. SD/- SD/- (T.K. SHARMA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : 25 TH NOVEMBER 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A) GANDHINAGAR AHMEDABAD 4. THE CIT GANDHINAGAR 5. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT