M/s. M.M. Finance, Anand v. The Income tax Officer, Ward-1,, Anand

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'SMC' (BEFORE SHRI N S SAINI ACCOUNTANT MEMBER) ITA NO.2769/AHD/2009 (ASSESSMENT YEAR:- 1999-2000) M/S M. M. FINANCE CIVIL COURT ROAD JIVANDHARA BUILDING OUTSIDE SARDARGUNJ ANAND PAN: AADFM 0842 R V/S THE INCOME-TAX OFFICER WARD-1 ANAND [APPELLANT] [RESPONDENT] ITA NO.2770/AHD/2009 (ASSESSMENT YEAR:- 1999-2000) M/S M. M. FINANCE CIVIL COURT ROAD JIVANDHARA BUILDING OUTSIDE SARDARGUNJ ANAND PAN: AADFM 0842 R V/S THE INCOME-TAX OFFICER WARD-1 ANAND [APPELLANT] [RESPONDENT] ITA NOS.2771 AND 2772/AHD/2009 (ASSESSMENT YEARS:- 2001-2002 AND 2002-03) M/S M. M. FINANCE CIVIL COURT ROAD JIVANDHARA BUILDING OUTSIDE SARDARGUNJ ANAND PAN: AADFM 0842 R V/S THE INCOME-TAX OFFICER WARD-1 ANAND [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI N C AMIN RESPONDENT BY:- SHRI GOVIND SINGHAL SR. DR 2 O R D E R THE APPEAL [ITA NO.2769/AHD/2000] HAS BEEN FILED B Y THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIO NER OF INCOME- TAX (APPEALS) DATED 05-08-2009 FOR ASSESSMENT YEAR 1999-2000. ITA NO.2769/AHD/2000 FOR AY 1999-2000: 2 THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS AP PEAL RELATES TO CONFIRMATION OF AN ADDITION OF RS.75 000/- HOLDING IT AS UNEXPLAINED CASH CREDITS. 3 THE BRIEF FACTS OF THE CASE ARE THAT EARLIER WHIL E DECIDING THE APPEAL THROUGH A COMBINED ORDER BEARING ITA NOS.956 957/AHD/2004 AND 1686/AHD/2005 DATED 16-12-2005 FO R AYS 1999- 2000 AND 2000-01 VIDE PARA-7 OF THE AFORESAID ORDE R IN RESPECT OF THE ABOVE AMOUNT OF RS.75 000/- BEING PART OF ORIGI NAL ADDITION OF RS.1 67 001/- IN THE ASSESSMENT ORDER DATED 28-03-2 002 THE TRIBUNAL DIRECTED THE AO TO FIND OUT WHETHER THE INCOME IS A SSESSED IN THE HANDS OF SHRI ALLARAKHA AS CLAIMED BY THE ASSESSEE AND GRANT NECESSARY RELIEF TO THE ASSESSEE ON THIS ACCOUNT. T HE LEARNED ASSESSING OFFICER ACCORDINGLY PROVIDED OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM IN RESPONSE TO WHICH IT WAS SUBMITTED BY THE ASSESSEE THAT THE DISCLOSURE MADE BY SHRI ALLAR AKHA I VOHRA FOR THE BLOCK PERIOD 1988-89 TO 31-3-1999 INCLUDED DEPO SITS OF RS.75 000/- IN DIFFERENT NAMES WITH THE ASSESSEE FI RM. IN SUPPORT OF SUCH CONTENTION COPY OF APPELLATE ORDER IN THE CAS E OF SHRI ALLARAKHA VOHRA FOR THE CONCERNED BLOCK ASSESSMENT WAS FILED. THE LEARNED ASSESSING OFFICER OBSERVED THAT THERE WERE DISCREPANCIES IN THE NAMES OF PARTIES CONSTITUTING RS.75 000/- BETWE EN SUBMISSIONS MADE BY THE ASSESSEE BEFORE DIFFERENT AUTHORITIES A T DIFFERENT STAGES. 4 THE ASSESSING OFFICER ALSO OBSERVED THAT ON VERIFICATION OF ENTRIES FROM ANNEXURE-A (STATEMENT OF SHORTAGE O F CASH OR 3 NEGATIVE CASH BALANCE PREPARED IN THE CASE OF SHRI ALLARAKHA I. VOHRA ANNEXED TO BLOCK ASSESSMENT/APPELLATE ORDER) CERTA IN ENTRIES STATED TO BE OF THE NAMES CONSTITUTING RS.75 000/- WERE NO T MATCHING WITH THE DATES. THE ASSESSING OFFICER ALSO OBSERVED THAT SHRI ALLARAKHA VOHRA DID NOT ACCEPT SUCH AMOUNT IN THE BLOCK ASSES SMENT PROCEEDINGS NOR SUCH DEPOSITS WERE CONFIRMED BY SHR I ALLARAKHA VOHRA IN THE STATEMENT RECORDED U/S. 132(4) OF THE ACT. THROUGH OFFICE LETTER DATED 18.8.2006 ASSESSING OFFICER SP ECIFICALLY ASKED THE APPELLANT TO PRODUCE EVIDENCE THAT THE AFORESAI D INCOME HAD ALREADY BEEN ASSESSED IN THE HANDS OF SHRI ALLARAKH A I. VOHRA BUT NO SUPPORTING EVIDENCE WAS PRODUCED. ASSESSING OFFICER FURTHER OBSERVED THAT FROM CHART OF NEGATIVE CASH BALANCE PREPARED IN CASE OF SHRI ALLARAKHA I. VOHRA I.E. ANNEXURE-A IT WAS NOT CLEAR THAT THE FIGURES AND DATES WERE SAME WHICH WERE CONSIDERED F OR ADDITION OF RS.75 000/- IN THE CASE OF APPELLANT FIRM. SINCE TH E APPELLANT COULD NOT PROVE THAT THE VERY SAME AMOUNT HAD BEEN ADDED IN ITS HANDS AS HAD BEEN TAXED ALREADY IN THE HANDS OF SHRI ALLARAK HA VOHRA THE ASSESSING OFFICER DECLINED TO GRANT RELIEF ON THIS COUNT AND DID NOT DISTURB ADDITION OF RS.75 000/- MADE EARLIER. 5 DURING THE APPELLATE PROCEEDINGS APPELLANT SUBMI TTED COPIES OF ACCOUNTS OF FIVE DEPOSITORS IN THE BOOKS OF M/S. M. M. FINANCE I.E. THE APPELLANT CLAIMED TO BE DULY CONFIRMED BY SHRI ALLARAKHA VOHRA UNDER HIS NAME ADDRESS AND PAN. IT WAS SUBMI TTED THAT IN THE STATEMENT RECORDED U/S.132(4) IN ANSWER TO Q. NO.2 9 SHRI ALLARAKHA VOHRA HAD ADMITTED THESE AMOUNTS TO BE SAVINGS OF T HOSE FIVE PARTIES. APPELLANT REFERRED TO THE BLOCK ASSESSMENT ORDER DATED 27.2.2002 IN ITS OWN CASE SPECIFICALLY TO PAGE.3 T HAT SHRI ALLARAKHA I. VOHRA CONFIRMED THESE DEPOSITS BEING MADE WITH A PPELLANT FIRM BY HIM AND FURTHER RECORDING A FINDING THAT ON VERIFIC ATION OF CASH BOOKS AND LEDGER PRODUCED IN BLOCK ASSESSMENT PROCE EDINGS IT WAS NOTED THAT ALL THE ENTRIES WERE RECORDED IN THE BOO KS OF ACCOUNTS. AS PER APPELLANT SUCH RECORDING IN THE BLOCK ASSESSME NT ORDER PROVED 4 THAT ADDITION WAS MADE BY THE A.O. IGNORING SPECIFI C DIRECTIONS OF THE ITAT I.E. WITHOUT MAKING ANY EFFORT TO VERIFY CASE RECORD OF SHRI ALLARAKHA I. VOHRA. APPELLANT REFERRED TO THE C OPY OF BLOCK ASSESSMENT APPELLATE ORDER IN CASE OF SHRI ALLARAKH A I. VOHRA WHERE ON PAGE.4 PARA-V CLEAR CUT ADMISSION ON PART OF S HRI ALLARAKHA VOHRA WAS RECORDED STATING THAT THERE WERE UNACCOUN TED TRANSACTIONS AND ON PAGE.5 PARA.VI WHEREIN HE HAD DECLARED UN DISCLOSED INCOME OF RS.32 62 989/-. APPELLANT POINTED OUT THAT THE F IVE ENTRIES CONSTITUTING RS.75 000/- WERE APPEARING AS UNDER IN ANNEXURE A TO THE BLOCK ASSESSMENT APPELLATE ORDER OF SHRI ALLARA KHA VOHRA:- (I) SI.NO.94 DATED 5.3.1998 RS.15 000/- IS MATCHIN G WITH THE STATEMENT U/S. 132(4) WHICH AMOUNT IS IN THE NAME O F MONTUBHAI VORA. (II) SL NO 96 DATED 11.03.1998 RS.15 000/-. THIS- ENTRY IS MATCHING WITH THE STATEMENT U/S. 132(4) WHICH AMOUN T IS IN THE NAME OF FARIDABEN A VORA. (III) SI NO.144 DATED 28.11.1998 RS.13 000/- AND S T.NO.153 DATED 4.1.99 RS.14 000/-. THESE ENTRIES ARE MATCHING WITH THE STATEMENT U/S.132(4) WHICH AMOUNTS ARE IN THE NAME OF FAROOQ ALIARAKHA VORA. (IV) SI. NO. 170 DATED 5.3 1999 RS.18 000/-. THIS E NTRY IS MATCHING WITH THE STATEMENT U/S. 132(4) WHICH AMOUNT IS IN T HE NAME OF SACHIN ISMAIIBHAI VORA. AS PER APPELLANT SINCE THE ABOVE ENTRIES ARE MATCH ING WITH STATEMENT OF SHRI ALLARAKHA VOHRA AT THE TIME OF SEARCH APPE LLANT HAD PROVED BEYOND REASONABLE DOUBT THAT THE AMOUNTS WERE ALREA DY TAXED IN THE HANDS OF SHRI ALLARAKHA VOHRA. A CONFIRMATORY LETTE R DATED 1.12.2007 FROM SHRI ALLARAKHA VOHRA AND ZEROX COPIE S OF ACCOUNTS OF APPELLANT FROM THE BOOKS OF ACCOUNTS DULY CERTIF IED BY ITO WD. L ANAND WERE ALSO FILED. 6 REFERENCE WAS MADE TO THE ASSESSING OFFICER T O MAKE VERIFICATION FROM THE ASSESSING OFFICER OF SHRI ALL ARAKHA VOHRA 5 WHETHER THE SUM OF RS.75 000/- ADDED IN APPELLANT'S CASE WAS ASSESSED AS SHRI ALLRAKHA VOHRA'S INCOME OR NOT DUE TO HIS ADMISSION. COPY OF CONFIRMATION FROM SHRI ALLAR AKHA VOHRA FILED BY THE APPELLANT WAS ALSO FORWARDED TO THE ASSESSIN G OFFICER. THE ASSESSING OFFICER AFTER MAKING VERIFICATION FROM T HE ASSESSING OFFICER OF SHRI ALLARAKHA VOHRA I.E. ACIT CIRCLE. 3 BARODA INFORMED THAT AS REPORTED BY AO OF SHRI ALLARAKHA V OHRA CASH DEPOSITS OF RS.75 000/- WERE NOT TAXED IN THE HANDS OF SHRI ALLRAKHA VOHRA WHILE PASSING THE BLOCK ASSESSMENT ORDER IN H IS CASE. COPY OF AO'S REPORT WAS SUPPLIED TO APPELLANT FOR COMMEN TS. THE APPELLANT THROUGH LETTER DATED 3.8.2009 SUBMITTED THAT THE AS SESSING OFFICER OF SHRI ALLARAKHA VOHRA HAS NOT THOROUGHLY GONE THROUG H THE ASSESSMENT RECORDS OF SHRI ALLARAKHA VOHRA AND MERE LY FURNISHED COPY OF ASSESSMENT ORDER. APPELLANT AGAIN REITERATE D ITS SUBMISSIONS ABOUT BLOCK APPELLATE ORDER IN CASE OF ALLARAKHA VO HRA RECORDING THE SAID AMOUNT OF RS.75 000/- AS ALLARAKHA VOHRA'S UND ISCLOSED INCOME. THE APPELLANT WAS HEARD ABOUT THIS SUBMISSION AS WE LL. 7 AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASS ESSEE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) DEALT WITH THE ISSUE AS UNDER:- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE BLOCK ASSESSMENT ORDER IN THE CASE IN THE CASE OF SHRI ALLARAKHA I. VOHRA CIT(APPEALS)'S ORDER IN RESPECT OF BLOCK ASSESSMENT PROCEEDINGS OF SHRI ALL ARAKHA VOHRA OTHER EVIDENCE ON RECORD AND APPELLANT'S SUBMISSIONS. AT THE TIME OF SEARCH AT SHRI ALLARAKHA VOHRA'S RESIDENCE ON 31 3 1999 PASS BOOKS ISSUED BY THE APPELLANT FIRM IN THE FOLLOWING NAMES SHOWING DEPOS ITS AS UNDER WERE FOUND: - SHRI SAHIN I VOHRA 5-3-1999 RS.18 000 SHRI FAROOQH A VOHRA 28-11-1998 RS.13 000 SHRI FAROOQH A VOHRA 4-1-1999 RS.14 000 SMT. FARIDABEN A VOHRA 11-3-1998 RS.15 000 SHRI MUNAFBHAI VOHRA 5-3-198 RS.15 000 6 IN HIS STATEMENT U/S.132(4) IN ANSWER TO Q.NO.29 SHRI ALLARAKHA I. VOHRA DESCRIBED RELATIONSHIP OF THE ABOVE MENTIONED PERSO NS WITH HIM. SOURCE OF ABOVE DEPOSIT WAS NOT MENTIONED BY HIM EXCEPT IN RE SPECT OF FAROOQH WHO WAS HIS SON AND THE AMOUNT WAS STATED TO BE OUT OF FARUQH'S SAVINGS. APPELLANT'S CONTENTION THAT AT THE TIME OF SEARCH I TSELF SHRI ALLARAKHA 1. VOHRA HAD ACCEPTED THESE AMOUNTS AS HIS OWN OR HAD PROVIDED NECESSARY EXPLANATION ABOUT THESE AMOUNTS IS THEREFORE NOT C ORRECT. IN ACCORDANCE WITH DIRECTIONS OF HON'BLE ITAT IN ORDER DATED 16.1 2.2005 IN APPELLANT'S CASE THE LIMITED ISSUE TO BE EXAMINED IS WHETHER T HE AMOUNTS TOTALLING TO RS.75 000/- AS ABOVE WERE TAXED IN THE HANDS OF SHR I ALLARAKHA I. VOHRA AS HIS UNDISCLOSED INCOME OR NOT. SINCE SUCH A CLAIM W AS MADE BY THE APPELLANT ONLY ONUS TO ESTABLISH IT WAS SQUARELY O F THE APPELLANT. IN THIS REGARD APPELLANT HAS REFERRED TO THE BLOCK ASSESSM ENT ORDER IN THE CASE OF SHRI ALLARAKHA VOHRA AND ALSO APPELLATE ORDER BY CI T(APPEALS) IN THE CASE OF SHRI ALLARAKHA VOHRA FOR BLOCK PROCEEDINGS. AS P ER THE ASSESSING OFFICER OF SHRI ALLARAKHA VOHRA THE SAID ENTRIES O F RS.75 000/- HAVE NOT BEEN TAXED IN THE HANDS OF SHRI ALARAKHA VOHRA IN T HE BLOCK ASSESSMENT. I HAVE THEREFORE CAREFULLY GONE THROUGH THE BLOCK A SSESSMENT ORDER OF SHRI ALLARAKHA VOHRA THE SPECIFIC REFERENCES BY APPELLA NT TO VARIOUS PAGES / PARAS OF THE BLOCK ASSESSMENT ORDER ARE THOSE WHER E SOME REFERENCE TO APPELLANT DIRECTLY OR OBLIQUELY IS MADE. HOWEVER ON THE BASIS OF THESE ONE CANNOT COME TO A CONCLUSION THAT THE SUM OF RS 75 7 000/- IS TAXED AS SHRI ALLARAKHA VOHRA'S INCOME. THE ONLY RELEVANT PARAGRA PH POINTED OUT BY THE APPELLANT IN THIS REGARD COULD BE SAID TO BE THE BO TTOM PARA OF PAGE 44 IN THE BLOCK ASSESSMENT ORDER OF SHRI ALLARAKHA VOHRA WHEREIN IT IS STATED THAT AS PER ANNEXURE-A PEAK CREDIT IS WO RKED OUT AT RS 24 63 ; 000/- ON 31.05.1996 AND SUBSEQUENT TO THIS DATE TILL THE DATE OF SEARCH TURNOVER IS OF RS.86 09 502/-. AFTER CONSID ERING THE APPELLANT'S SUBMISSION THE ASSESSING OFFICER MADE ADDITION OF THE PEAK CREDIT OF RS 24 63 000/- ; TO WHICH THE APPELLANT ALSO AGREED. THE ASSESSING OFFICER ALSO TAXED G.P. @ 20% OF THE TURNOVER OF RS.86 09 5 02/- I.E. THE TURNOVER FOR THE PERIOD SUBSEQUENT TO 31.5.1996 AND TILL THE DATE OF SEARCH. THE SAME ANNEXURE-A WAS MADE PART OF THE ORDER OF CIT(APPEAL S) FOR BLOCK PROCEEDINGS IN THE CASE OF SHRI ALLARAKHA VOHRA WH ICH HAS BEEN REFERRED TO FROM TIME TO TIME BY THE APPELLANT. THE CIT(APPE ALS) IN PARA.5 TO 10 OF HIS ORDER DATED 14.6.2002 COPY OF WHICH HAS BEEN F ILED BY THE APPELLANT FOUND THE ADDITION OF RS.24 63 000/- ON THE BASIS O F PEAK CREDIT METHOD TO BE ON SOUND BASIS AND CONFIRMED THE SAME. THE CIT(A PPEALS) DIRECTED TO APPLY RATE OF 17% INSTEAD OF 20% ON FIGURE OF RS.86 09 502/- WHICH WORKED OUT TO RS.14 63 000/- AND DIRECTED TO TAX TH E SAME. THE IMPORTANT ASPECT SEEN FROM THE BLOCK ASSESSMENT ORDERS AND BL OCK APPELLATE ORDER IN THE CASE OF SHRI ALLARAKHA VOHRA IS THAT THE ENTRIE S CONSTITUTING RS.75 000/- ARE AT SI.NOS. 94 (RS. 15 000 DATED 5.3.98) SI.NO. 96 (RS. 15 000 DATED 11.3.98) SI.NO.144 (RS.13 000 DATED 28.11.98) SI. NO.153 (RS.14 000/- DATED 4.1.1999) AND SI.NO.170 (RS.18 000/- DATED 5. 3.1999). ALL THESE ENTRIES WERE CONSIDERED AS PART OF THE TURNOVER OF RS. 86 09 502/- OF SHRI ALLARAKHA VOHRA ON WHICH GP RATE OF 17% WAS APPLIE D AS PER CIT (APPEALS)'S DIRECTIONS TO TAX THE INCOME IN HIS HAN DS. APPELLANT'S CONTENTION THAT THE ENTRIES OF RS.75 000/- WERE OFF ERED AS INCOME BY SHRI 7 ALLARAKHA VOHRA OR WERE TAXED AS HIS INCOME IS THE REFORE NOT CORRECT. AS MENTIONED THESE ENTRIES WERE CONSIDERED AS PART OF BUSINESS TURNOVER OF SHRI ALLARAKHA VOHRA WHICH IS NOT THE SAME THING A S BEING HIS INCOME WHICH COULD BE CONSIDERED AS COMPLETE SOURCE OF DEP OSITS IN APPELLANT'S HANDS. THE CONFIRMATORY LETTER BY SHRI ALLARAKHA VO HRA DATED 1.12.2007 IS OF NO RELEVANCE FOR THE ISSUE AT HAND I.E. THAT TH E SUM OF RS.75 000/-WAS TAXED AS SHRI ALLARAKHA VOHRA'S INCOME OR NOT. THIS COULD ONLY BE SEEN WITH REFERENCE TO THE BLOCK ASSESSMENT ORDERS IN SH RI VOHRA'S CASE. APPELLANT'S REFERENCE TO THE BLOCK ASSESSMENT ORDER IN ITS OWN CASE IS ALSO NOT RELEVANT. IN THIS BLOCK ASSESSMENT ORDER ASSES SING OFFICER'S FINDING IS THAT THE ENTRIES OF RS.75 000/- WERE IN APPELLANT'S BOOKS AND HENCE HE DID NOT CONSIDER THE SAME TO BE APPELLANT'S UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE ENTRIES RECORDED IN THE BOOKS OF ACCOUN TS WERE RIGHTLY CONSIDERED BY THE A.O. IN THE REGULAR ASSESSMENT PR OCEEDINGS. SINCE THE CLAIM OF APPELLANT REGARDING SUM OF RS.75 000/- HAV ING BEEN TAXED AS INCOME OF SHRI ALLARAKHA VOHRA IS FOUND TO BE NOT SUBSTANTIATED IN ACCORDANCE WITH ITAT'S DIRECTIONS THE ADDITION MAD E BY THE ASSESSING OFFICER IS CONFIRMED . 8 THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSE SSEE ARGUED THAT THE CIT(APPEALS) IN PARA.5 TO 10 OF HIS ORDER DATED 14.6.2002 FOUND THE ADDITION OF RS.24 63 000/- ON THE BASIS O F PEAK CREDIT METHOD TO BE ON SOUND BASIS AND CONFIRMED THE SAME. THE CIT(APPEALS) DIRECTED TO APPLY RATE OF 17% INSTEAD OF 20% ON FIGURE OF RS.86 09 502/- WHICH WORKED OUT TO RS.14 63 000 /- AND DIRECTED TO TAX THE SAME. THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) HAS FURTHER OBSERVED THAT THE IMPORTANT ASPECT SEEN FROM THE BLOCK ASSESSMENT ORDERS AND BLOCK APPELLATE ORDER IN THE CASE OF SHRI ALLARAKHA VOHRA IS THAT THE ENTRIES CONSTITUTING RS .75 000/- ARE AT SI.NOS. 94 (RS. 15 000 DATED 5.3.98) SI.NO.96 (RS. 15 000 DATED 11.3.98) SI.NO.144 (RS.13 000 DATED 28.11.98) SI. NO.153 (RS.14 000/-DATED 4.1.1999) AND SI.NO.170 (RS.18 00 0/- DATED 5.3.1999). ALL THESE ENTRIES WERE CONSIDERED AS PAR T OF THE TURNOVER OF RS. 86 09 502/- OF SHRI ALLARAKHA VOHRA ON WHIC H GP RATE OF 17% WAS APPLIED AS PER CIT (APPEALS)'S DIRECTIONS TO TA X THE INCOME IN HIS HANDS. THEREFORE IT WAS THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE THAT THE SUM OF RS.75 000/- WAS TAXED IN THE HANDS OF SHRI ALLARAKH A VOHRA AND AS 8 PER THE DIRECTION OF THE TRIBUNAL NO ADDITION SHOUL D BE MADE IN THE HANDS OF THE ASSESSEE FOR THE SAID SUM OF RS.75 000 /-. 9 THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE SH RI GOVIND SINGHAL SUBMITTED THAT AS SEEN FROM THE ORDER OF TH E LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) THAT RS.75 000 /- WAS CONSIDERED AS PART OF TOTAL TURNOVER OF RS.86 09 50 2/- WHOSE PEAK CREDIT OF RS.24 63 000/- WAS TAXED WHICH AT THE GRO SS PROFIT RATE OF 17% IN THE HANDS OF SHRI ALLARAKHA VOHRA. THEREFORE AFTER ALLOWING CREDIT FOR THIS 17% ON RS.75 000/- THE BALANCE AMO UNT SHOULD BE TAXED IN THE HANDS OF THE ASSESSEE. 10 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE O N RECORD. IN THE INSTANT CASE THE ASSESSEE HAS CLAIMED TO HAVE RECE IVED CHEQUES OF RS.75 000/- FROM SHRI ALLARAKHA I VOHRA. THIS CHEQU E AMOUNT WAS TREATED AS UNEXPLAINED CASH CREDIT ORIGINALLY BY TH E REVENUE. ON APPEAL THE TRIBUNAL IN THE FIRST ROUND SET ASIDE T HE ISSUE BACK TO THE FILE OF THE AO WITH THE FOLLOWING DIRECTIONS: IT IS ALSO SUBMITTED BY THE ASSESSEE THAT A SUM OF RS.75 000/- WAS ASSESSED IN THE HANDS OF SHRI ALLARAKHA I VOHRA WHO HAS ADMI TTED THIS AS HIS INCOME AND THEREFORE THE SAID AMOUNT SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. THE CONTENTION OF THE ASSESSEE APPEARS TO BE CORRECT. IF THE SAME AMOUNT HAS BEEN ADDED IN THE HANDS OF SHRI ALLARAKH A THE SAME SHOULD NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE BECAUSE TH AT AMOUNT WOULD BE A SOURCE OF RECEIPT IN THE HANDS OF THE ASSESSEE. I ACCORDINGLY SET ASIDE THE ADDITION AND DIRECT THE AO TO FIND OUT WHETHER THE INCOME IS ASSESSED IN THE HANDS OF SHRI ALLARAKHA AS CLAIMED BY THE ASSESSEE AND GRANT NECESSARY RELIEF TO THE ASSESSEE ON THIS ACCOUNT. THE LEARNED ASSESSING OFFICER IN PURSUANCE TO THE A BOVE ORDER OF THE TRIBUNAL AGAIN ADDED RS.75 000/- TO THE INCOME OF THE ASSESSEE ON THE GROUND THAT NO EVIDENCE WAS PRODUCED BEFORE HIM TO SHOW THAT THE ABOVE RS.75 000/- WAS ASSESSED IN THE HAND S OF SHRI ALLARAKHA I VOHRA. ON APPEAL THE LEARNED COMMISSIO NER OF INCOME- TAX (APPEALS) OBSERVING THAT IN THE HANDS OF SHRI A LLARAKHA I VOHRA 9 UNDISCLOSED SALES OF RS.86 09 502/- WAS FOUND AND T HE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN HIS CASE HA S ESTIMATED GROSS PROFIT AT THE RATE OF 17% OF THE ABOVE SALES. ACCORDING TO THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) THE NA ME OF THE ASSESSEE APPEARED IN THE ORDER OF SHRI ALLARAKHA I VOHRA AND RS.75 000/- WAS INCLUDED IN THE UNDISCLOSED TURNOVE R OF SHRI ALLARAKHA I VOHRA. FROM THE ABOVE THE LEARNED COMM ISSIONER OF INCOME-TAX (APPEALS) CONCLUDED THAT RS.75 000/- WAS INCLUDED IN THE TURNOVER OF SHRI ALLARAKHA I VOHRA AS ITS BUSINESS TURNOVER AND NOT AS DEPOSIT GIVEN TO THE ASSESSEE. THUS CONFIRMED T HE ORDER OF THE LEARNED ASSESSING OFFICER ON THE GROUND THAT RS.75 000/- WAS NOT TAXED IN THE HANDS OF SAID SHRI ALLARAKHA I VOHRA O N ACCOUNT OF GIVING OF DEPOSIT TO THE ASSESSEE AND THE CONFIRMAT ORY LETTERS OF SHRI ALLARAKHA I VOHRA ALSO DOES NOT EVIDENCE THE SAME. BEFORE ME THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE E XPLAINED THAT THE ASSESSEE FIRM WAS ENGAGED IN THE BUSINESS OF CH EQUE DISCOUNTING. SHRI ALLARAKHA I VOHRA DEPOSITED RS.75 000/- WHICH WAS RECEIVED BY THE SAID SHRI ALLARAKHA I VOHRA FROM ITS CUSTOMERS. THE SAID SHRI ALLARAKHA I VOHRA WAS TAXED IN RESPECT OF INCOME IN CLUDED IN THE RECEIPT OF RS.75 000/- AND THE TOTAL UNDISCLOSED IN COME ASSESSED IN THE HANDS OF SHRI ALLARAKHA I VOHRA WAS MORE THAN R S.14 63 000/-. THEREFORE IN VIEW OF THE TRIBUNALS ORDER THE LEAR NED COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIR MING THE ADDITION OF RS.75 000/- IN THE HANDS OF THE ASSESSEE. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE ADMITTED THAT R S.75 000/- IN QUESTION FORMED PART OF THE UNDISCLOSED TURNOVER AS SESSED IN THE HANDS OF SAID SHRI ALLARAKHA I VOHRA. HOWEVER HE C ONTENDED THAT AS IN THE HANDS OF SAID SHRI ALLARAKHA I VOHRA TAX WAS CHARGED ONLY ON 17% OF THE SAID AMOUNT OF RS.75 000/- THEREFORE T HE BALANCE 83% SHOULD BE ASSESSED IN THE HANDS OF THE ASSESSEE. I FIND FROM THE ABOVE THAT IT IS NOT IN DISPUTE THAT RS.75 000/- WA S RECEIVED BY THE ASSESSEE FROM SAID SHRI ALLARAKHA I VOHRA WHICH WAS PART OF HIS UNRECORDED TURNOVER ALSO. IN OTHER WORDS SAID SHRI ALLARAKHA I 10 VOHRA ADVANCED RS.75 000/- TO THE ASSESSEE OUT OF H IS RECEIPTS FROM HIS UNDISCLOSED TURNOVER. THE SAID UNDISCLOSED TURN OVER FORMED PART OF HIS TOTAL UNDISCLOSED TURNOVER OF RS.86 09 502/- IN RESPECT OF WHICH INCOME OF RS.14 63 000/- WAS ASSESSED IN HIS HANDS. IN VIEW OF THE ABOVE FACTS IN MY CONSIDERED OPINION THE L EARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION OF RS.75 000/- IN THE HANDS OF THE ASSESSE E AS UNEXPLAINED CASH CREDIT. THE ARGUMENT OF THE LEARNED DEPARTMENT AL REPRESENTATIVE HAS ALSO NO FORCE AS SHRI ALLARAKHA I VOHRA EARNS 17% ON HIS TURNOVER DOES NOT IMPLY THAT BALANCE 83% COULD BE ASSESSED IN THE HANDS OF THE ASSESSEE.THE FACTS ON RECORD SHOW THAT SHRI ALLARAKHA I VOHRA ADVANCED RS.75 000/- TO THE ASSESSEE OUT OF HIS UNRECORDED SALE PROCEEDS AND THE TOTAL INCOME O F UNRECORDED SALE PROCEEDS IN THE HANDS OF SAID SHRI ALLARAKHA I VOHR A WAS MORE THAN RS.14 63 000/-. ON THE ABOVE FACTS I DO NOT FIND A NY JUSTIFICATION IN ADDING RS.75 000/- AGAIN TO THE INCOME OF THE ASSES SEE AS UNEXPLAINED CASH CREDIT. I THEREFORE DELETE THE A DDITION OF RS.75 000/- AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. ITA NO.2770/AHD/2009 FOR AY 1999-2000 : 11 IN THIS APPEAL THE FOLLOWING GROUNDS ARE TAKEN BY THE ASSESSEE: 1. THE SOLE GROUND OF APPEAL TAKEN IS THAT THE PENALTY ORDER LEVYING PENALTY U/S 271(1)(C) OF RS.85 942/- IS BAR RED BY LIMITATION AND HENCE DESERVES TO BE CANCELLED. 2 THE ASSESSEE HAS VOLUNTARILY OFFERED RS.1 96 690/ - FOR TAXATION AND MATERIAL FACTS WERE LYING ON THE RECORD OF THE LEARNED ASSESSING OFFICER REGARDING THE CASH CREDIT OF RS.2 6 437/- AND NOT RS.42 005/- APPELLANT HAVING NOWHERE ADMITTED T HAT AMOUNT U/S 68 WAS ITS CONCEALED INCOME AND BALANCE AMOUNT OF RS.6854/- IS ON ACCOUNT OF CARRIED FORWARD TOTALING MISTAKE AND THEREFORE PENALTY ORDER CONFIRMED BY THE LEARNE D COMMISSIONER OF INCOME-TAX (APPEALS) BE CANCELLED. 11 12 THE FACTS OF THE CASE AS PER PENALTY ORDER ARE T HAT THE ORIGINAL RETURN OF INCOME WAS FILED ON 31.8.1999 DECLARING T OTAL INCOME OF RS.12 060/-. THEREAFTER REVISED RETURN WAS FI LED ON 29.2.2000 DECLARING SAME TOTAL INCOME TO CLAIM ADDITIONAL TDS CREDIT. ASSESSMENT U/S.143(3) WAS COMPLETED ON 28.3 2002 I N WHICH PENALTY PROCEEDINGS U/S.271(L)(C) WERE INITIATED THROUGH NO TICE DATED 28.3.2002 WHICH WAS NOT RESPONDED TO BY THE APPELL ANT. THEREAFTER ASSESSMENT WAS REOPENED AND FRESH ASSESSMENT FINALI ZED U/S.143(3) R.W.S. 147 ON 30.9.2004 BY ENHANCING TOTAL INCOME W ITH AN ADDITION OF RS.1 96 690/- BEING UNEXPLAINED PEAK CASH CREDIT AND PENALTY PROCEEDINGS WERE INITIATED FOR FURNISHI NG INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. APPELLATE ORDER AGAINST ORDER U/S. 143(3) WAS GIVEN EFFECT TO O N 25.8.2004 AND PENALTY NOTICE DATED 3.7.2004 WAS AGAIN ISSUED AS A GAINST WHICH APPELLANT REQUESTED FOR KEEPING THE PENAL TY PROCEEDINGS IN ABEYANCE DUE TO APPEAL FILED BEFORE THE ITAT FOR VARIOUS ADDITIONS INCLUDING THE GROUND OF ENHANCED INCOME O F RS.1 96 690/-. AFTER TTAT'S DECISION FRESH NOTICE DATED 13.7.2006 WAS ISSUED. APPELLANT'S REPLY TO THE NOTICE WAS THAT APPEAL EFF ECT BE FIRST GIVEN IN ITS CASE. APPELLANT ALSO RAISED THE CONTENTION T HAT SINCE CIT(APPEALS) HIMSELF HAD WORKED OUT INCOME OF THE A PPELLANT AND LEARNED ASSESSING OFFICER HAD ONLY GIVEN EFFECT TO THE SAID ORDER PENALTY PROCEEDINGS INITIATED WERE WITHOUT JURISDI CTION AND ONLY LEARNED CIT(APPEALS) HAD THE JURISDICTION TO INITIA TE THE PROCEEDINGS BEFORE WHOM ADDITIONAL INCOME OF RS.1 96 690/- THE PEAK AS PER CASH BOOK ON 28.8.1998 WAS WORKED OUT. AS PER APPE LLANT REOPENING OF ASSESSMENT U/S. 148 AFTER VOLUNTARY OF FER OF ADDITIONAL INCOME COULD NOT RESULT INTO PENALTY PR OCEEDINGS. APPELLANT ALSO SUBMITTED THAT NO CONCEALMENT PENA LTY COULD BE LEVIED ON ADDITION OF RS.42 500/- RETAINED BY ITAT IN ORDER DATED 16.12.2005 AS THERE WAS NO' FINDING IN THE ASSESS MENT ORDER FOR INITIATING PENALTY PROCEEDINGS IN RESPECT OF THE S AME. THE ASSESSING OFFICER OBSERVED THAT APPELLANT FIRM WAS NOT MAINTA INING BOOKS OF 12 ACCOUNTS AND WAS HAVING UNACCOUNTED TRANSACTIONS AN D UNEXPLAINED CASH CREDITS. REGARDING THE CLAIM THAT DISCLOSURE OF RS.1 96 690/- BEFORE THE APPELLATE AUTHORITY WAS VOLUNTARY ASSES SING OFFICER'S OBSERVATION WAS THAT APPELLANT DID NOT COME FORWARD WITH ANY SUCH DISCLOSURE IN THE ORIGINAL RETURN FILED ON 31.8 199 9 REVISED RETURN ON 29 2 2000 AND TILL THE FINALIZATION OF FIRST ASSESSMENT ON 28.3 2002. AS PER ASSESSING OFFICER IT WAS ONLY DU E TO THE ASSESSMENT PROCEEDINGS FOR A.Y.2000-01 WHICH WERE IN PROGRESS THAT NUMBER OF DISCREPANCIES AND CASH DEPOSITS IN T HE BANK ACCOUNTS WITH SARDARGANJ MERCANTILE CO-OP. BANK LTD. BARODA AND ANAND MERCANTILE CO-OP. BANK LTD. BARODA WERE NOTICED W HICH WAS FOLLOWED BY IMPOUNDING OF CASH BOOK AND LEDGER U/S. 131(3) ON 22.1.2003. AS PER ASSESSING OFFICER DUE TO THIS T HE APPELLANT OFFERED AND DISCLOSED AMOUNT OF RS.1 96 690/- FOR A .Y.1999-2000 THROUGH A LETTER FIRST TIME ON 10.2.2003 BEFORE A. O. AND SUBSEQUENTLY VIDE SUBMISSIONS DATED 21.2.2003 BEFORE CIT(APPEALS). ASSESSING OFFICER ALSO NOTED THAT IN EARLIER SUBMISSION BEFORE CIT(APPEALS) ON 26 .11.2002 APPELLANT HAD MADE NO SUCH DISCLOSURE. REGARDING A DDITION OF RS.6 854/- ASSESSING OFFICER NOTED THAT IT WAS DUE TO DIFFERENCE BETWEEN INTEREST DETAILS SUBMITTED BY THE APPELLANT TOTALLING TO RS.4 26 623/- AS AGAINST ENTRY IN THE P & L ACCOUNT AT RS.4 19 769/-. REGARDING ADDITION OF RS.42 085/- ASSESSING OFFICE R HELD THAT NEITHER AT THE ASSESSMENT STAGE NOR AT THE APPELLA TE STAGE APPELLANT COULD BRING ANY MATERIAL ON RECORD TO PROVE GENUINE NESS OF THE TRANSACTION DUE TO WHICH HON'BLE ITAT UPHELD THE ADDITION. ASSESSING OFFICER THEREFORE HELD THAT APPELLANT HA D FURNISHED INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEAL ED INCOME TO THE TUNE OF RS.2 45 549/- AND LEVIED PEN ALTY U/S.271(L)(C) OF RS.85 942/-. 13 BEFORE THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) THE APPELLANT SUBMITTED THAT THE PENALTY LEVIED BY THE LEARNED 13 ASSESSING OFFICER WAS AB-INITIO-VOID SINCE THE INCOME OF RS.3 53 206/- WAS ASSESSED BY THE ASSESSING OFFICER IN PURSUANCE TO APPEAL ORDER WHEREAS THE INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ON 28.3.2002 WAS RS.2 26 556/- ONLY. AS PER APPELLANT INCOME IS ENHANCED U/S 251(L)(A) BY CIT(APPEALS) W HO ONLY HAD THE JURISDICTION TO INITIATE THE PROCEEDINGS AND LEVY P ENALTY. RELIANCE WAS PLACED ON THE DECISION OF CIT (UP) VS. SHADIRAM BALMUKUND 84 ITR 183 (ALLAHABAD) AND CIT WEST BENGAL VS. ANAND BAZAR PATARIKA PVT. LTD. 116 ITR 416 THE APPELLANT ALS O SUBMITTED THAT PENALTY ORDER PASSED IS NOT AS PER SECTION 275 SIN CE THE LEARNED ASSESSING OFFICER PASSED ORDER U/S. 143(3) R.W.S. 2 54 THROUGH ORDER DATED 13.10.2006 WHEREIN HE INITIATED PENALTY PROC EEDINGS WHICH WERE BAD-IN-LAW ILLEGAL AND VOID. AS PER APPELLANT PENALTY PROCEEDINGS HAD BEEN INITIATED VIDE ORDER DATED 28. 3.2002 AFTER WHICH APPEAL ORDER WAS PASSED BY CIT(APPEALS) ON 9. 3.2004 AND AS PER PROVISIONS OF SECTION 275 ASSESSING OFFICER HA D TO PASS PENALTY ORDER ON OR BEFORE 31.3.2005/31.3.2006. THEREFORE THE PENALTY ORDER ITSELF WAS BARRED BY LIMITATION U/S.275. ON MERITS APPELLANT RELIED UPON SUBMISSIONS MADE BE FORE THE ASSESSING OFFICER THROUGH LETTER DATED 25.7.2006. RELIANC E WAS FURTHER PLACED ON THE DECISIONS VIZ; NEW SORATHIA ENGG. CO. VS. CIT (GUJ) 282 ITR 642 T. ASHOK PAI VS. CIT 292 ITR 11 DILIP N. SHROFF VS. CIT 210 CTR 228 CIT VS. SURESH CHANDRA MITTAL 251 ITR 9 TO CLAIM THAT MENS-REA WAS ESSENTIAL BEFORE P ENALTY U/S.271(L)(C) COULD BE LEVIED. 14 AFTER CONSIDERING THE SUBMISSIONS MADE BY THE AS SESSEE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) UPHELD THE LEVY OF PENALTY BY OBSERVING AS UNDER:- 2.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND APPELLANT'S SUBMISSIONS. APPELLANT'S CONTENTION THAT THE ASSESS ING OFFICER HAD NO JURISDICTION TO INITIATE THE PENALTY PROCEEDINGS AN D CIT(A) ONLY HAD SUCH JURISDICTION IS TAKEN UP. FIRST. THE ORIGINAL ASSES SMENT HAD BEEN FINALIZED U/S 143(3) ON 28.3.2002 ASSESSING TOTAL INCOME AT RS.2 26 556/-. IN THIS 14 ASSESSMENT INCOME OF RS.1 96 960/- COULD NOT BE TA XED SINCE APPELLANT HAD NOT REFLECTED THE SAME IN THE RETURNS FILED. TH EREAFTER AS RECORDED BY THE ASSESSING OFFICER IN THE PENALTY ORDER DURING THE ASSESSMENT PROCEEDINGS FOR A.Y.2000-01 FROM VERIFICATION OF C ASH BOOK FOR A.Y. 1999- 2000 AND ITS RECONCILIATION WITH BANKS IT WAS DETE CTED BY THE A.O. THAT SOME OF THE ENTRIES WERE NOT PROPERLY RECORDED DUE TO WHICH ADDITIONAL INCOME OF RS.1 96 690/- WAS REQUIRED TO BE INCLUDED FOR A.Y 1999-2000. THE APPELLANT FIRST FILED LETTER DATED 8.2.2003 A B EFORE THE ASSESSING OFFICER ADMITTING ADDITIONAL INCOME OF RS.1 96 694/ -AND THEREAFTER ON 21.2.2003 FILED SIMILAR LETTER BEFORE THE CIT(APPEA LS). ASSESSING OFFICER ISSUED NOTICE U/S.148 BEFORE PASSING OF THE ORDER B Y CIT( APPEALS). EVEN THOUGH CIT(APPEALS) DISCUSSED THE OFFER OF ENHANCEMENT BY THE APPELLANT IN THE ORDER DATED 9 3.2004 AND DIRECTED TO INCLUDE RS.1 96 690/- THE REASSESSMENT PROCEEDINGS U/S.147 WERE ALREADY UNDER PROGRESS BY THEN AND THE ASSESSING OFFICER DULY COMPLETED REASS ESSMENT PROCEEDINGS VALIDLY INITIATED ON 30.9.2004 DETERMINING THE INC OME AT RS.3 53 210/-. APPELLANT IN ITS SUBMISSIONS HAS NEVER CO NTROVERTED AO'S FINDING IN THE PENALTY ORDER THAT THE ADDITIONAL INCOME OF RS. 1 96 690/- SURRENDERED WAS AGREED TO ONLY DUE TO EXAMINATION OF APPELLANT' S ACCOUNTS BY THE ASSESSING OFFICER DURING PROCEEDINGS FOR A.Y.2000-0 1. THE OFFER BY THE APPELLANT CANNOT BE THUS SAID TO BE VOLUNTARY. IN ANY CASE THE ASSESSMENT OF ADDITIONAL INCOME OF RS.1 96 690/- UNDER SECTION 147 HAD NO LACUNAE LEGALLY THE PROCEEDINGS U/S.147 HAV ING BEEN VALIDLY INITIATED DURING THE COURSE OF WHICH PENALTY PROCE EDINGS U/S.271(L)(C) WERE ALSO VALIDLY INITIATED. MERELY BECAUSE THE INCOME I N THE ORDER DATED 30.9.2004 WAS SAME AS INCOME AS PER ORDER GIVING EF FECT TO CIT(APPEALS)'S ORDER ON 25.8.2004 CANNOT BE A REASON TO SAY THAT REASSESSMENT PROCEEDINGS WERE NOT VALID OR THE ASSESSING OFFIC ER DID NOT HAVE JURISDICTION TO INITIATE PENALTY PROCEEDINGS. THE C ONTENTION OF THE APPELLANT REGARDING PENALTY PROCEEDINGS BEING BAD-IN-LAW DUE TO INITIATION OF THE SAME BY THE ASSESSING OFFICER INSTEAD OF CIT (APPEA LS) IS NOT FOUND TO BE VALID AND IS REJECTED. APPELLANTS NEXT CONTENTION THAT THE PENALTY PROCEEDINGS WERE BARRED BY LIMITATION AS PER PROVISIONS OF SECTION 275 IS NOW TAKEN UP. AS PER APPELLANT THE PENALTY PROCEED INGS WERE BARRED BY LIMITATION SINCE PENALTY ORDER COULD BE PASSED WIT HIN ONE YEAR FROM THE END OF FINANCIAL YEAR IN WHICH ORDER OF CIT(APPEALS ) WAS RECEIVED BY THE CIT OR BEFORE THE EXPIRY OF FINANCIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY WE RE INITIATED WHICHEVER IS LATER. SINCE THE CIT(A)'S ORDER WAS PASSED ON 9. 3.2004 AND ORIGINAL ASSESSMENT ORDER WAS PASSED ON 28.3.2002 AS PER AP PELLANT PENALTY PROCEEDINGS SHOULD HAVE BEEN FINALIZED ON OR BEFORE 31.3.2006 I.E. ONE YEAR FROM THE END OF FINANCIAL YEAR IN WHICH CIT(A) S ORDER WAS RECEIVED BY THE CIT. FURTHER AS PER APPELLANT PENALTY ORDE R PASSED BY AO ON THE BASIS OF ASSESSMENT ORDER DATED 13.10.2006 IS NOT VALID AND LEGAL. APPELLANT'S CONTENTION THAT PENALTY ORDER IS PASSED ON THE BASIS OF ORDER DATED 13.10.2006 U/S. 143(3) R.W.S. 254 IS FACTUALL Y INCORRECT FOR THE SIMPLE REASON THAT THE PENALTY ORDER IS DATED 28 7 2006 I .E. IT IS PASSED BEFORE 13.10.2006. AS RECORDED IN THE PENALTY ORDER ON RECEIPT OF CIT(A)'S ORDER AFTER GIVING APPEAL EFFECT ON 2J5.8.J2004 P ENALTY PROCEEDINGS WERE 15 KEPT IN ABEYANCE ONLY DUE TO APPELLANT'S REQUEST DA TED 13.9.2004 TO KEEP THE PENALTY PROCEEDINGS IN ABEYANCE DUE TO PENDING APPEAL OF APPELLANT BEFORE ITAT. SINCE THE PENALTY PROCEEDINGS WERE KEP T IN ABEYANCE ON APPELLANT'S REQUEST ON THE GROUND OF PENDING PROCEE DINGS BEFORE ITAT THE SAME COULD NOT BE FINALIZED WITHIN THE TIME PRESCRI BED UNDER PROVISO TO SECTION 275(L)(A) AND WERE INSTEAD FINALIZED WITHIN THE PRESCRIBED TIME U/S.275(L)(A) ON RECEIPT OF ITAT'S ORDER. ON ONE HAND APPELLANT REQUESTED THE A.O. TO KEEP PENALTY PROCEEDINGS IN A BEYANCE DUE TO ITS APPEAL PENDING BEFORE ITAT AND ON THE OTHER HAND A PPELLANT IS NOW CONTENDING THAT THE PENALTY PROCEEDINGS GOT TIME BA RRED DUE TO NOT HAVING BEEN FINALIZED AFTER RECEIPT OF CIT(A)'S ORDER. IN ANY CASE THE PENALTY PROCEEDINGS HAVING BEEN COMPETED WITHIN SIX MONTHS FROM THE DATE OF RECEIPT OF ITATS ORDER BY THE COMMISSIONER THE PENALTY PROCEEDINGS WERE NOT TIME BARRED HAVING BEEN COMPL ETED WITHIN THE TIME PRESCRIBED UNDER SECTION 275(L)(A). THIS CONTENTION OF THE APPELLANT ALSO FAILS. ON MERITS AS REGARDS ADDITION OF RS.1 96 690/-; IN THE ASSESSMENT ORDER DATED 30.9.2004 ASSESSING OFFICER HAS CLEARLY RECORDED THE CIRCUMSTANCES LEADING TO SURRENDER OF ADDITIONAL INCOME OF RS.1 96 690/- BY THE APPELLANT. AS MENTIONED IN THE PENALTY ORDER AS WELL AS THE ASSESSMENT ORDER AMOUNT OF RS.1 96 690/- WAS O FFERED AS INCOME FOR A.Y. 1999-2000 BY THE APPELLANT AFTER DETECTION B Y THE ASSESSING OFFICER OF A NUMBER OF DISCREPANCIES AND CASH DEPOSITS IN A PPELLANT'S BANK ACCOUNTS AND IMPOUNDING OF THE BOOKS U/ S.L31(3) ON 22.1.2003. MOREOVER THE VERY FACT THAT INCOME OF RS.1 96 690/ - WAS NOT REFLECTED IN THE ORIGINAL RETURN FILED ON 31.8.1999 AS WELL AS REVISED RETURN ON 29.2.2000 ITSELF ESTABLISHES THAT THE SUM OF RS.1 96 690/- REPRESENTED CONCEALED INCOME. REGARDING OTHER ADDITIONS APPELL ANT MADE NO SPECIFIC SUBMISSIONS IN REPLIES FILED BEFORE A.O. DURING PEN ALTY PROCEEDINGS WHICH ARE RELIED UPON DURING APPELLATE PROCEEDINGS EXCEP T STATING THAT THERE WAS NO FINDING IN THE ASSESSMENT ORDER FOR INITIATING P ENALTY PROCEEDINGS AND ITAT HAD SET ASIDE THE MATTER TO THE AO'S FILE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS IN THE ORIGINA L ASSESSMENT ORDER DATED 28 3.2002 SPECIFICALLY IN RESPECT OF ADDITION OF RS.1 67 001/-; HENCE APPELLANT'S CONTENTION IS NOT VALID. AS FAR AS SETT ING ASIDE BY ITAT IS CONCERNED THE SAME WAS IN RESPECT OF ADDITION OF R S.75 000/- ONLY. IN THE PENALTY ORDER DATED 28.7.2006 ASSESSING OFFICER LE VIED PENALTY IN RESPECT OF ADDITIONS OF RS.42 005/- AND RS.6 854/- AND NOT IN RESPECT OF ADDITION OF RS.75 000/- WHICH WAS THE SUBJECT MATTER OF SETTIN G ASIDE BY ITAT. AS MENTIONED BY THE ASSESSING OFFICER IN THE P ENALTY ORDER ADDITION OF RS.6 854/- WAS ON THE BASIS OF DIFFERENCE BETWEEN I NTEREST FIGURES SUBMITTED BY THE APPELLANT AND FIGURES AS PER PROFIT AND LOSS ACCOUNT. IN RESPECT OF ADDITION OF RS.42 005/- BEING ADDED AS UNEXPLAINED CASH CREDITS THE APPELLANT COULD NOT BRING ANY MATERIAL ON RECORD EITHER AT APPELLATE STAGE OR AT ASSESSMENT STAGE TO PROVE GENUINENESS OF THE TRANSACTIONS. THIS ADDITION WAS UPHELD BY THE ITAT AS WELL. THUS THERE IS NO MERIT IN APPELLANT'S CONTENTIONS FILED BEFORE TH E ASSESSING OFFICER AT THE TIME OF PENALTY PROCEEDINGS. AS FAR AS APPELLANT'S RELIANCE ON DECISIONS IN THE CASE OF T. ASHOK PAI DILIP N. SHROFF ETC. REG ARDING MENS-REA BEING AN ESSENTIAL PRE REQUISITE FOR LEVY OF PENALTY U/S.271 (L)(C) IS CONCERNED THE 16 SAME IS NOT TENABLE IN VIEW OF DECISION OF THE SUPR EME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & OTHERS (2008) 306 ITR 277 (SC). IT THUS STANDS ESTABLISHED THAT APPELLANT CO NCEALED INCOME OF RS.2 45 549/- BY NOT INCLUDING THE SAME IN THE ORIG INAL AS WELL AS IN THE REVISED RETURNS OF INCOME AND THEREBY FURNISHED INA CCURATE PARTICULARS OF INCOME AS WELL. ONCE THE STATUTORY DEFAULT IS ESTAB LISHED WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT \L FOR LEVY OF PENALTY U/S.271(L)(C) AS HELD BY HON'BLE SUPREME COURT IN T HE CASE OF DHARMENDRA TEXTILE PROCESSORS (SUPRA). IN VIEW OF ABOVE PENAL TY OF RS.85 942/- LEVIED U/S.271(L)(C) IS UPHELD . 15 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE THE LEARNED ASSESSING OFFICER VIDE HI S ORDER 28-07- 2006 LEVIED PENALTY U/S 271(1)(C) OF RS.85 942/- ON ACCOUNT OF CONCEALMENT OF INCOME OF RS.2 45 549/-. THE ABOVE O RDER OF THE AO WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS). THE ALLEGED CONCEALED INCOME OF RS.2 45 549/- CONSISTS OF THREE INCOMES. INCOME OF RS.1 96 690/- ON ACCOUN T OF ADDITIONAL INCOME RS.6 854/- ON ACCOUNT OF DIFFERENCE IN INTE REST INCOME AND RS.42 005/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE AT THE OU TSET CHALLENGED THE VALIDITY OF THE PENALTY ORDER PASSED BY THE AO ON 28-07-2006 AND SUBMITTED THAT THE ORDER WAS BARRED BY LIMITATI ON AS PER THE PROVISO TO SECTION 275(1)(A). ACCORDING TO THE LEAR NED ASSESSING OFFICER IN THE INSTANT CASE THE LEARNED COMMISSIONE R OF INCOME-TAX (APPEALS) HAS PASSED THE ORDER ON 09-03-2004 AND TH EREFORE PENALTY ORDER U/S 271(1)(C) COULD NOT HAVE BEEN PASSED AFTE R 31-03-2006 AND THEREFORE THE IMPUGNED ORDER BEING PASSED ON 28-07- 2006 IS BARRED BY LIMITATION AS PER PROVISO TO SECTION 275(1)(A). I FIND THAT IN THE INSTANT CASE A SECOND APPEAL WAS PREFERRED BY THE A SSESSEE BEFORE THE TRIBUNAL AND THE TRIBUNAL PASSED THE ORDER ON 16-12 -2005. THUS IN MY CONSIDERED VIEW THE INSTANT CASE IS COVERED BY THE PROVISIONS OF MAIN SECTION 275(1)(A) AND NOT BY THE PROVISO TO SE CTION 275(1)(A). FURTHER THE ASSESSEE HIMSELF AFTER PASSING OF THE CIT(A)S ORDER REQUESTED THE LEARNED ASSESSING OFFICER NOT TO PASS PENALTY ORDER 17 TILL THE DISPOSAL OF THE QUANTUM APPEAL BY THE ITAT . IN THE ABOVE CIRCUMSTANCES IN MY CONSIDERED VIEW THE APPELLANT CANNOT BE ALLOWED TO TURNAROUND AND ALLEGE THAT THE ORDER KEP T IN ABEYANCE ON HIS REQUEST WAS BARRED BY LIMITATION. THIS APPROACH OF THE ASSESSEE CANNOT BE APPRECIATED. THUS I DO NOT FIND ANY MERI T ON THIS PLEA OF THE ASSESSEE. 16 THE ASSESSEE FURTHER ARGUED THAT ADDITION OF RS.1 96 690/- FOR THE FIRST TIME IN HIS CASE WAS MA DE BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) VIDE HIS ORDER DATED 09-03- 2004 AND NOT BY THE LEARNED ASSESSING OFFICER AND T HEREFORE THE JURISDICTION TO LEVY THE PENALTY U/S 271(1)(C) WAS NOT WITH THE LEARNED ASSESSING OFFICER AND THEREFORE LEVY OF PEN ALTY U/S 271(1)(C) WITH RESPECT TO RS.1 96 690/- IS WITHOUT JURISDICTION. I FIND THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) IN HIS APPELLATE ORDER DATED 09-03-2004 HELD AS UNDER: IN THE LIGHT OF THESE SUBMISSION AND FACTS OF THE CASE THE AO IS DIRECTED TO ADD ADDITIONAL INCOME TO THE EXTENT OF RS.1 96 690/- SUBJECT TO REMEDIAL AND PENAL ACTION IF ANY TAKEN BY THE DEPARTMENT. 17 THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDE D THAT TO ASSESS THIS INCOME OF RS.1 96 690/- PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED BY THE AO BEFORE PASSING OF THE ORDE R BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND THE AO ALS O ASSESSED THIS INCOME IN THE HANDS OF THE ASSESSEE VIDE ORDER DATED 30-9-2004 PASSED U/S 147 R.W.S 143(3) OF THE ACT AND THEREFOR E THE LEARNED ASSESSING OFFICER HAD JUSTIFICATION TO LEVY PENALTY U/S 271(1)(C) IN RESPECT THEREOF. I FIND THAT THE ORDER U/S 147 READ WITH SECTION 143(3) WAS PASSED BY THE LEARNED ASSESSING OFFICER ON 30-9 -2004 I.E. AFTER THE AFORESAID INCOME WAS ALREADY DIRECTED TO BE ADD ED TO THE INCOME OF THE ASSESSEE BY THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS). IN MY CONSIDERED OPINION AS BEFORE PASS ING OF THE ORDER BY THE LEARNED ASSESSING OFFICER THIS INCOME WAS A LREADY ASSESSED 18 TO TAX BY THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) THE SAME AFTER PASSING OF THE ORDER BY THE LEARNED COMM ISSIONER OF INCOME-TAX (APPEALS) DID NOT REMAIN AN INCOME WHICH ESCAPED ASSESSMENT AND WITH REFERENCE TO WHICH A VALID ORDE R U/S 147 COULD HAVE BEEN PASSED. BE THAT AS IT MAY FROM THE RECOR DS IT IS CLEAR THAT THE INCOME OF RS.1 96 690/- WAS BROUGHT TO TAX FOR THE FIRST TIME BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) VI DE HIS ORDER DATED 9-3-2004. ON THE ABOVE UNDISPUTED FACTS AS PE R THE PROVISIONS OF SECTION 271(1)(C) THE JURISDICTION TO LEVY PENAL TY WAS WITH THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND NO T WITH THE LEARNED ASSESSING OFFICER. IN THE INSTANT CASE IT I S NOT IN DISPUTE THAT NO PENALTY IN RESPECT OF THIS INCOME OF RS.1 9 6 690/- WAS LEVIED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) . THEREFORE IN MY CONSIDERED OPINION THE LEVY OF PENALTY IN RESPE CT OF INCOME OF RS.1 96 690/- BY THE LEARNED ASSESSING OFFICER WAS WITHOUT JURISDICTION AND THEREFORE BAD IN LAW. I THEREFORE DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) IN RESPECT OF THE AFORESAID INCOME OF RS.1 96 690/-. 18 THE PENALTY U/S 271(1)(C) WAS ALSO LEVIED BY THE LEARNED ASSESSING OFFICER IN RESPECT OF RS.6894/- BEING DIF FERENCE IN INTEREST INCOME AND RS.42 005/- BEING UNEXPLAINED CASH CREDI T. WE FIND THAT THE ASSESSEE BEFORE THE LOWER AUTHORITIES SUBMITTE D EXPLANATION IN RESPECT OF THE ABOVE TWO ISSUES AS UNDER:- REGARDING SECOND ADDITION OF RS.6 854/- THE APPELL ANT HAS SPECIFICALLY BROUGHT TO THE NOTICE OF THE HON'BLE CIT(A) VIDE WR ITTEN SUBMISSION DATED 26.11.02 WHEREIN ON PAGE 5 IT WAS SPECIFICALLY STAT ED THAT THERE IS A TOTALING MISTAKE IN INTEREST ACCOUNT AND DETAILED N ARRATION IS AS UNDER: THERE IS NOTHING BUT A CARRIED FORWARD MISTAKE IN T HE LIST SUBMITTED TO THE LEARNED ASSESSING OFFICER REGARDING INTEREST ACCOUN T. THE SAME CAN BE RECONCILED. THE ORIGINAL BOOKS OF ACCOUNTS ARE LYIN G IN YOUR CUSTODY AND THEREFORE WE COULD NOT RECONCILE THE SAID MISTAKE A ND THEREFORE THE LEARNED AO IS NOT JUSTIFIED IN MAKING THE SAID ADDITIONS AN D REQUESTED TO CIT(A) TO DELETE THE SAME. EVEN THOUGH IN APPELLATE ORDER THE LEARNED CIT(A) HAS 19 GIVEN FINDING THAT APPELLANT HAS NOT PRESSED IS CON TRARY TO THE WRITTEN SUBMISSIONS SUBMITTED BY US. YOU ARE THEREFORE KI NDLY VERIFY FROM YOUR BOOKS OF ACCOUNTS AND THE TOTALING MISTAKE BE CONFI RMED AND PENALTY ON THIS AMOUNT IS NOT LEVIABLE CONSIDERING THE FACTS A ND MATERIALS LYING ON YOUR RECORD. AFTER PROPER VERIFICATION FROM THE MAT ERIAL LYING IN YOUR CUSTODY THE DECISION MAY PLEASE BE TAKEN IN THE INT EREST OF JUSTICE. THE ADDITION OF RS.42 005 RETAINED BY HON'BLE TRIBU NAL IN PARA 7 OF THE FACTS NARRATED ARE THE SAME AS FACTS NARRATED IN PA RA 11 OF THE APPELLATE ORDER FOR AY 2000-01. ON IDENTICAL FACTS THE HON'BL E ITAT HAS DELETED THE ADDITIONS IN THE ACCOUNT OF CASH CREDITORS ON IDENT ICAL FACTS FOR AY 2000- 01 AND THEREFORE THE ADDITIONS RETAINED BY HON'BLE ITAT. REGARDING THESE GIFTS TO VARIOUS MINORS IS APPEARING ON THE RECORD OF THE LEARNED AO AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WHICH ARE IDENTICAL FOR BOTH THE YEARS I.E. 1999-2000 AND 2000-01 AND THERE FORE NO CONCEALMENT PENALTY CAN BE LEVIED ON RS.42 005/- RETAINED BY HO N'BLE ITAT IN HIS ORDER DATED 16.12.05 . 19 I FIND THAT THE LOWER AUTHORITIES HAVE NOT CONSI DERED THE ABOVE SUBMISSIONS OF THE ASSESSEE AND HAVE LEVIED AND CON FIRMED THE PENALTY WITHOUT CONTROVERTING THE ABOVE SUBMISSIONS OF THE ASSESSEE. THE LOWER AUTHORITIES DECIDED THE ISSUE OF PENALTY PURELY ON THE BASIS OF FINDING IN THE ASSESSMENT PROCEEDINGS INCL UDING APPELLATE PROCEEDINGS AND BY IGNORING THE ABOVE SUBMISSIONS O F THE ASSESSEE. IN MY CONSIDERED VIEW THE ABOVE ACTION OF THE LOWE R AUTHORITIES CANNOT BE UPHELD. HOWEVER I ALSO FIND THAT THE LEA RNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS BROUGHT NO MATER IAL BEFORE ME TO SUBSTANTIATE THE ABOVE SUBMISSIONS WHICH WERE MADE BEFORE THE LOWER AUTHORITIES. IN THE ABOVE CIRCUMSTANCES I AM NOT IN A POSITION TO DECIDE THE ISSUE COMPLETELY EITHER ONE WAY OR TH E OTHER. THEREFORE IN MY CONSIDERED OPINION IT SHALL BE IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE OF LEVY OF PENALTY IN RESPECT OF INCOME OF RS.6 854/- AND RS.42 005/- TO THE FILE OF THE AO FO R FRESH ADJUDICATION. THE AO IS DIRECTED TO PASS THE ORDER AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE AND B Y PASSING A SPEAKING ORDER IN RESPECT OF THE SUBMISSIONS OF THE ASSESSEE AND CONSIDERING THE FULL FACTS WHICH MAY BE AVAILABLE T O HIM TILL THE DATE OF PASSING OF THE ORDER AFRESH. NEEDLESS TO MENTION THAT THE AO 20 SHALL ALLOW REASONABLE OPPORTUNITY OF HEARING TO TH E ASSESSEE BEFORE PASSING THE ORDER AFRESH. THEREFORE THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOD.2771 AND 2772/AHD/2009 FOR AYS 2001-02 2002 -03 : 20 THE SOLE ISSUE INVOLVED IN APPEAL NO.2771/AHD/20 09 FOR ASSESSMENT YEAR 2001-02 AND THE FIRST ISSUE INVOLVE D IN ITA NO.2772/AHD/2009 FOR ASSESSMENT YEAR 2002-03 IS THA T THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW A ND IN FACTS IN CONFIRMING THE DISALLOWANCE OF RS.6 788/- IN ASSESS MENT YEAR 2001- 02 AND RS.7 604/- IN ASSESSMENT YEAR 2002-03 PAID T O VOHRA GROUP OF CASES AS MENTIONED IN THE ASSESSMENT ORDERS. 21 IN APPEAL NO.2771/AHD/2009 FOR ASSESSMENT YEAR 2 001-02 AND ITA NO.2772/AHD/2009 FOR ASSESSMENT YEAR 2002-03 TH E GROUNDS RELATE TO THE DISALLOWANCE OF INTEREST OF RS.6 788/ - AND RS.7 604/- PAID TO SHRI ALLARAKHA I VOHRA IN RESPECT OF DEPOSI T OF RS.75 000/-. 22 I FIND THAT THE INTEREST OF RS.6 788/- AND RS.7 604/-FOR AYS 2001-02 AND 2002-03 WERE DISALLOWED AS DEPOSIT OF R S.75 000/- WAS NOT ACCEPTED BY THE REVENUE AS GENUINE IN THE ASSES SMENT OF ASSESSMENT YEAR 1999-2000 AND 2000-01. I HAVE WHILE DECIDING THE ONLY GROUND OF APPEAL OF THE ASSESSEE IN ASSESSMEN T YEAR 1999- 2000 HAVE HELD THAT THE SAID DEPOSIT OF RS.75 000/- AS GENUINE AND CONSEQUENTLY THERETO I DELETE THE DISALLOWANCE OF R S.6 788/- IN ASSESSMENT YEAR 2001-02 AND RS.7 604/- IN ASSESSMEN T YEAR 2002- 03 BEING INTEREST PAID TO SHRI ALLARAKHA I VOHRA. T HUS THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED IN BOTH THE YE ARS UNDER CONSIDERATION. 23 THE ONLY OTHER ISSUE INVOLVED IN ASSESSMENT YEAR 2002-03 IS THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN 21 CONFIRMING THE ADDITION OF RS.20 004/- ON ACCOUNT O F UNEXPLAINED CASH CREDIT. 24 IN THE INSTANT CASE THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED LOANS FROM THE FOLLOWING PERSONS: NAME OF PERSON AMOUNT DATE NATURE OF A/C ------------------ --------- --------- ----------- -------- CHANDINIBEN PATEL RS.5001 16.11.2001 CURRENT A/C CHANDINIBEN PATEL RS.5001 16.11.2001 F.D. PRIYANKA M PATEL RS.5001 16.11.2001 F.D. JANAKIBEN J PATEL RS.5001 16.11.2001 F.D. THE AO ADDED THE AFORESAID AMOUNT TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT ON THE GROUND THAT THE CONF IRMATIONS FILED SHOW THAT THE CREDITORS WERE MINOR AND THE AMOUNT W AS RECEIVED BY THEM FROM THE AGRICULTURE INCOME AND THEY WERE NOT ASSESSED TO TAX. ON APPEAL THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) CONFIRMED THE ABOVE ADDITIONS. 25 BEFORE ME THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT LOANS RECEIVED FROM THE AFO RESAID CREDITORS ON SIMILAR FACTS IN THE ASSESSMENT YEAR 2000-01 WAS ACCEPTED BY THE TRIBUNAL. AS THE FACTS ARE IDENTICAL THE LOANS IN QUESTION SHOULD BE ACCEPTED. I FIND THAT THE TRIBUNAL IN THE ASSESSMEN T YEAR 2000-01 VIDE ITS ORDER DATED 16-12-2005 PASSED IN ITA NO.95 6 AND 957/AHD/.2004 AND 1686/AHD/2005 HAS HELD AS UNDER: 12 THE PARTIES WERE HEARD AND THEIR RIVAL CONTENTI ONS CONSIDERED. AS CONTENDED BEFORE THE CIT(A) THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IT IS A CUSTOM IN THE SOCIETY OF PATELS TO GIVE CER TAIN AMOUNT ON A PARTICULAR OCCASION OR FUNCTION LIKE DIWALI LABH-PANCHAM BIR THDAY ETC. THE ASSESSEE HAD ALSO FURNISHED CONFIRMATIONS REGARDING SUCH DEPOSITS BEFORE THE AO. NECESSARY DETAILS ARE ALSO APPEARING ON PAG ES 16 TO 29 OF PAPER BOOK. ON PERUSAL OF THE DETAILS AND MATERIAL ON REC ORD I AM OF THE OPINION THAT THE ADDITION SHOULD NOT HAVE BEEN MADE PARTICU LARLY IN VIEW OF THE FACT THAT THE ASSESSEE HAS FURNISHED CONFIRMATIONS OF SU CH DEPOSITS BEFORE THE AO. THE ADDITION IS ACCORDINGLY DELETED . 22 26 I FIND THAT THE LEARNED DEPARTMENTAL REPRESENTAT IVE COULD NOT POINT OUT ANY GOOD REASON AS TO WHY THE AFORESAID O RDER OF THE TRIBUNAL SHOULD NOT BE FOLLOWED IN THE YEAR UNDER A PPEAL ALSO AND WHY THE LOAN OF RS.20004/- SHOULD NOT ACCEPTED AS G ENUINE. I FIND THAT THE CONFIRMATIONS FROM THE CREDITORS WERE DULY FILED BY THE ASSESSEE BEFORE THE LEARNED ASSESSING OFFICER WHICH WAS REJECTED BY THE AO WITHOUT VERIFICATION. I THEREFORE FOLLOWIN G THE ABOVE ORDER OF THE TRIBUNAL PASSED IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2000-01 DELETE THE ADDITION OF RS.2 0004/- AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 27 IN THE RESULT THE APPEAL IN ITA NO.2769/AHD/200 9 ITA NO.2771/AHD/2009 AND ITA NO.2772/AHD/2009 ARE ALLO WED AND THE APPEAL IN ITA NO.2770/AHD/2009 IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 29-01-2010 SD/- (N S SAINI) ACCOUNTANT MEMBER DATE : 29-01-2010 COPY OF THE ORDER FORWARDED TO : 1. M. M. FINANCE CIVIL COURT ROAD JIVANDHARA BUIL DING OUTSIDE SARDARGUNJ ANAND 2. THE ITO WARD-1 ANAND 3. CIT CONCERNED 4. CIT(A)-IV BARODA 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABA