The ACIT, Central Circle-1,, Baroda v. Shri Rajendra A.Amin, Baroda

ITA 3058/AHD/2008 | 2001-2002
Pronouncement Date: 18-03-2011 | Result: Dismissed

Appeal Details

RSA Number 305820514 RSA 2008
Assessee PAN ADBPP3489L
Bench Ahmedabad
Appeal Number ITA 3058/AHD/2008
Duration Of Justice 2 year(s) 6 month(s) 20 day(s)
Appellant The ACIT, Central Circle-1,, Baroda
Respondent Shri Rajendra A.Amin, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 18-03-2011
Date Of Final Hearing 07-03-2011
Next Hearing Date 07-03-2011
Assessment Year 2001-2002
Appeal Filed On 28-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA NO.3050 3051 3052 AND 3053/AHD/2008 [ASSTT. YEAR : 2000-2001 2001-2002 2002-2003 AND 2003-2004] ACIT CC-1 BARODA. VS. SHRI DINESH B. PATEL PROP. M/S. G.K. & CO. VASNA ROAD BARODA. PAN : ADBPP 3489 L ITA NO.3057 3058 AND 3059/AHD/2008 [ASSTT. YEAR : 2000-2001 2001-2002 AND 2003-2004] ACIT CC-1 BARODA. VS. SHRI RAJENDRA A. AMIN B-1 VAIKUNTHADHAM B/H GIRLS HIGH SCHOOL PADRA BARODA. PAN : AHYPA 3872 B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI D.C. PATWARI ASSESSEE BY : SHRI MUKUND BAKSHI O R D E R PER G.D. AGARWAL VICE-PRESIDENT : THESE ARE SEVEN APPEALS BY THE REVENUE AGAINST TWO ASSESSEES AND ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV AHMEDABAD A RISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT 1961. SINCE THE ISSUES RAISED IN TH ESE APPEALS ARE INTER-RELATED FOR THE SAKE OF CONVENIENCE WE DISPOSE OF ALL THES E APPEALS BY THIS COMMON ORDER. 2. FIRST WE SHALL TAKE UP ITA NO.3050/AHD/2008 FOR A.Y.2000-2001 IN THE CASE OF SHRI DINESH B. PATEL. THE FIRST GROUND RAI SED IN THIS APPEAL READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1 10 000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -2- ATLADRA LAND ON THE BASIS OF EVIDENCES WHICH WERE N OT FILED BEFORE THE AO. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD PURCHASED ATLADRA LAND DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMEN T 2002-2003 AND HAVE SOLD IT IN THE SAME YEAR. THE TOTAL COST OF LAND INCLUDING THE STAMP DUTY WAS RS.18 15 000/-. FROM THE PERUSAL OF THE SALE DEED THE AO NOTICED THAT AGAINST THE PURCHASE CONSIDERATION OF THE LAND THE ASSESSE E MADE PART PAYMENT IN CHEQUE AND PART PAYMENT IN CASH. CASH PAID DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR 2000-2001 WAS RS.1 10 000/-. SINCE THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE OF SUCH C ASH PAYMENT FOR PURCHASE OF THE LAND THE AO MADE THE ADDITION OF RS.1 10 000/- . ON APPEAL THE CIT(A) DELETED THE ADDITION WITH THE FOLLOWING FINDINGS: 3.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. ON PERUSAL OF AS SESSMENT ORDER IT HAS BEEN NOTICED THAT THE AO MADE ADDITION ON THE G ROUND THAT THIS AMOUNT WAS PAID BY CASH. HOWEVER THIS AMOUNT WAS A PART OF THE CONSIDERATION PAID BY CHEQUES DETAILS OF WHICH ARE GIVEN IN THE PLEADINGS BY LEARNED COUNSEL WHICH HAS NOT BEEN REB UTTED BY THE AO WHILE FURNISHING THE COMMENTS. HENCE THE ADDITION OF RS.1 10 000/- IS HEREBY DELETED. KEEPING IN VIEW OF ABOVE FACTS A ND CIRCUMSTANCES OF THE CASE THE SECOND GROUND OF APPEAL IS HEREBY ALLOWED. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SI DES AND THE FACTS OF THE CASE WE ARE UNABLE TO AGREE WITH THE FINDINGS OF THE CIT (A). AT PAGE NO.20 ONWARDS OF THE PAPER BOOK THE ASSESSEE HAS GIVEN THE ENGLIS H TRANSLATION OF PURCHASE DEED. AS PER THIS DEED THERE IS A SEPARATE PAYMEN T BY CASH AS WELL AS CHEQUE. THE TOTAL CASH PAYMENT OF RS.1 10 000/- DURING THE FINANCIAL YEAR 1999-2000 IS AS UNDER: 28/04/1999 : RS.93 000.00 06/11/1999 : RS.10 000.00 19/02/2000 : RS.07 000.00 RS.1 10 000/- ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -3- THIS IS IN ADDITION TO VARIOUS PAYMENTS MADE BY THE ASSESSEE BY CHEQUE THEREFORE THE FINDING OF THE CIT(A) THAT THE CASH PAYMENT WAS PART OF THE CONSIDERATION PAID BY THE CHEQUE IS INCORRECT. AS AGAINST THE TOTAL PURCHASE CONSIDERATION OF RS.17 LAKHS PART OF THE PAYMENT WA S BY CHEQUE AND PART BY CASH. THEREFORE IT WAS THE DUTY OF THE ASSESSEE T O EXPLAIN THE SOURCE OF CASH PAYMENT SINCE THE ASSESSEE WAS UNABLE TO EXPLAIN TH E SOURCE OF CASH PAYMENT OF RS.1 10 000/- IN OUR OPINION THE AO RIGHTLY MA DE THE ADDITION THEREFOR. WE THEREFORE REVERSE THE ORDER OF THE CIT(A) ON THI S POINT AND RESTORE THAT OF THE AO. ACCORDINGLY THE GROUND NO.1 OF THE REVENU ES APPEAL IS ALLOWED. 5. GROUND NO.2 AND 3 OF THE REVENUES APPEAL ARE IN TER-RELATED THEREFORE THEY ARE DEALT WITH TOGETHER WHICH READ AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5 00 000/- UNDISCLOSED PROFITS FROM PETROL PUMP OF HPCL AT KARELIBAUG BARODA BEING BENAMI INCOME OF THE A SSESSEE. 3. THE LD.CIT9A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.7 50 000/- ON ACCOUNT OF SECURITY DE POSIT AND MARGIN MONEY. 6. THE FACTS OF THE CASE ARE THAT THERE WAS PETROL PUMP AT KARELIBAUG BARODA IN THE NAME OF SHRI RAJENDRA AMIN. SHRI AMI N HAS CLAIMED TO HAVE TAKEN ON HIRE THE PETROL PUMP FROM HPCL W.E.F. 1-11 -2000. FOR TAKING SUCH PETROL PUMP HE HAD PAID A SUM OF RS.2 50 000/- AS S ECURITY DEPOSITS AND ALSO PROVIDED BANK GUARANTEE OF RS.5 00 000/-. THE AO H ELD SHRI RAJENDRA AMIN TO BE BENAMI OF THE ASSESSEE WITH THE FOLLOWING FINDINGS: DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF SHRI DINESH B. PATEL DETAILS OF BANK ACCOUNT NO.697 OF CENTRAL BA NK OF INDIA STATION ROAD BARODA WERE FOUND. A COPY OF THIS BANK ACCOU NT WAS CALLED FOR FROM THE BANK. THIS BANK ACCOUNT IS FOR A SHORT PE RIOD FROM 08.01.2000 TO 25.05.2004 THEREAFTER ONLY NOMINAL ENTRIES ARE FOUND IN THIS ACCOUNT. THIS BANK ACCOUNT HAS TOTAL CREDITS OF RS .9 73 44 615/- WITH TOTAL CASH DEPOSITS OF RS. 38 19 930/-. THIS STAND S IN THE NAME OF THE ASSESSEE SHRI RAJENDRA A. AMIN. A STATEMENT OF SHR I RAJENDRA AMIN ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -4- WAS RECORDED ON 14.05.2005 IN THE COURSE OF SEARCH PROCEEDINGS. IT IS SEEN FROM THE STATEMENT THAT I) HE IS AN EMPLOYEE OF M/S.G.K. & CO. A PETROL PUMP OWNED BY SHRI DINESH B. PATEL AT KARJAN AND HAS NO OTHER SOURCE OF INCOME. II) HE IS NOT ASSESSED TO TAX AND NEVER FILED THE RETUR NS. III) HE STATED THAT SINCE 1998 HE WAS WORKING WITH ONE PETROL PUMP OF G.K. & CO. AT A MONTHLY SALARY OF RS.3000 T O 4000 PER MONTH; IV) WITH EFFECT FROM 1.11.2000 HE TOOK ON HIRE A PETRO L PUMP FROM HPCL FOR RETAIL BUSINESS AT KARELIBAUG BARODA ; V) HE FURTHER STATED THAT HE MADE INVESTMENT OF RS.2.5 0 LACS IN SECURITY DEPOSITS AND RS.5.00 LACS WAS DEPOSITED AS BANK GUARANTEE; VI) HE FURTHER STATED THAT THE ABOVE AMOUNTS WERE GIVEN BY SHRI DINESH B. PATEL; VII) IN REPLY TO Q.10 HE REPLIED THAT RS.3.00 LACS WAS TRANSFERRED TO SHRI BHAILAL B. PATEL ON 01.12.2000 FROM HIS A/C.NO.697. IT IS CLEAR FROM THE ABOVE THAT THIS PETROL PUMP WA S A BENAMI PUMP OF SHRI DINESH B. PATEL AS ENTIRE INVESTMENTS WAS MADE BY HIM THROUGH SHRI RAJENDRA A. AMIN WHO IS MERELY HI S SMALL TIME EMPLOYEE. THE PROFIT FROM THIS PARTICULAR PETROL P UMP AND THE ACCOUNT NO.697 HAS NOT BEEN DECLARED IN THE RETURN. THE AO ESTIMATED THE INCOME OF RS.5 LAKHS FROM THE PETROL PUMP AND ASSESSED THE SAME AS INCOME OF THE ASSESSEE. SIMILARLY HE ALSO MADE ADDITION OF RS.7.50 LAKHS WHICH WAS THE SECURITY DEPOSITS GIVEN TO HPCL BY SHRI RAJENDRA AMIN OF RS.2.50 LAKHS AND BANK GUARANTEE OF RS.5.00 LAKHS. 7. ON APPEAL THE CIT(A) DELETED THE ADDITION WITH THE FOLLOWING FINDINGS: 4.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. THE STATEMENT OF SHRI RAJENDRA AMIN WAS RECORDED ABOUT BANK ACCOUNT NO. 697 OF CENTRAL BANK OF INDIA STATION ROAD BARODA IN HIS NAME. HE EXPLAINED THAT THIS AC COUNT PERTAINED TO THE OPERATIONS OF THE KARELIBAUG PETROL PUMP WHICH WAS ALLOTTED IN HIS NAME BY M/S. HINDUSTAN PETROLEUM (HP). HE FURTHER E XPLAINED THAT THE ENTRIES IN RESPECT OR CASH CREDITED IN THIS ACCOUNT ARE THE CASH RECEIVED ON SALE OF PETROL AND DIESEL. AS PER THE CONTRACT W ITH THE COMPANY LIE HAD TO SEND PAY ORDERS TO THE COMPANY AGAINST THE S ALE PROCEEDS. ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -5- AGAINST THIS THE COMPANY REIMBURSES THE EXPENSES L IKE SALARY MAINTENANCE CHARGES LIGHT BILLS ETC. ENTRIES OF WH ICH ARE ALSO REFLECTED IN THIS ACCOUNT. HPCL HAS ALSO ISSUED TDS CERTIFICA TE TO HIM. HE FURTHER STATED THAT THIS PETROL PUMP WAS RUN BY HIM AND THE PROFIT DERIVED FROM IT WAS ALSO BELONGED TO HIM. IN THIS PETROL PUMP AL L THE INVESTMENTS WERE MADE BY HPCL COMPANY ONLY. THIS IS ALSO REFLEC TED IN THE CONTRACT WITH HPCL AND THE OWNERSHIP OF ALL THESE A SSETS ARE WITH HPCL. IT HAS BEEN NOTICED THAT THE PETROL PUMP WAS ALLOTTED TO SHRI RAJENDRA AMIN UNDER THE SCHEME OF THE GOVERNMENT. SHRI RAJENDRA AMIN CONDUCTED BUSINESS ON COMPANY OWNED PREMISES. THE APPELLANT IS NOT RELATED TO SHRI REJENDRA AMIN. FURTHER THE POSSESSION AND ALLOTMENT OF THE PUMP CONTINUES TO BE IN THE NAME O F SHRI RAJENDRA AMIN BY THE HPCL TILL DATE OF SEARCH. NEXT SHRI R AJENDRA AMIN WAS OPERATING THE PUMP INDEPENDENTLY. THERE IS NO MATER IAL AVAILABLE ON RECORD TO PROVE THAT THE PUMP IS THE BENAMI OWNERSH IP OF THE APPELLANT. KEEPING IN VIEW ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE SHRI RAJENDRA AMIN IS REAL OWNER THEREFORE THE APPELLA NT IS NOT THE BENAMI OWNER OF THE PUMP ALLOTTED IN THE NAME OF SHRI RAJE NDRA AMIN. THEREFORE THE ADDITION MADE ON ACCOUNT OF BENAMI B USINESS IS HEREBY DELETED. HENCE THIRD GROUND OF APPEAL IS HEREBY AL LOWED. THE CIT(A) ALSO ACCEPTED THE EXPLANATION OF SHRI RA JENDRA AMIN FOR THE SOURCES OF SECURITY DEPOSITS AS WELL AS THE BANK GU ARANTEE PROVIDED BY HIM TO HPCL AND ALSO DELETED THE ADDITION OF R.7 50 000/- MADE BY THE AO IN THE HANDS OF THE ASSESSEE. THE REVENUE AGGRIEVED WITH THE ORDER OF THE CIT(A) IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. AT PAGE NO.67 TO 75 OF THE ASSESSEES PAPER BO OK THERE IS AN AGREEMENT DATED 1-11-2000 BETWEEN THE HPCL (A GOVERNMENT OF I NDIA UNDERTAKING) AND SHRI RAJENDRA AMIN. AS PER THIS AGREEMENT THE HPC L IS THE OWNER OF THE PLOT OF THE LAND AT KARELIBAUG BARODA AND HAS INSTALLED AT THE SAID PREMISES BUILDING EQUIPMENT ETC. ; THAT THE CORPORATION APP OINTED SHRI RAJENDRA AMIN AS THE CONTRACTOR FOR RUNNING OF RETAIL OUTLET. IN THE AGREEMENT IT WAS SPECIFIED THAT HIS APPOINTMENT AS CONTRACTOR WAS PURELY A TEM PORARY ARRANGEMENT PENDING SELECTION OF REGULAR DEALER THROUGH DEALER SELECTIO N BOARD. AS PER THIS AGREEMENT SHRI RAJENDRA AMIN WAS TO PROVIDE ONE MA NAGER AND SEVEN NUMBERS OF PUMP ATTENDANTS. ALL PAYMENTS TO THESE EMPLOYEES WERE TO BE ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -6- MADE BY THE CONTRACTOR I.E. SHRI RAJENDRA AMIN. HI S REMUNERATION WAS RS.24 800/- PER MONTH AND THE COMMISSION ON THE SAL E OF LUBRICANTS AT RS.10 800/- PER THOUSAND LITERS OF LUBRICANTS. FOR HIS APPOINTMENT AS A CONTRACTOR HE PAID RS.2 50 000/- AS SECURITY DEPOS ITS AND BANK GUARANTEE OF RS.5 00 000/-. THAT THE AGREEMENT WITH THE HPCL WAS WITH SHRI RAJENDRA AMIN AND NOT ASSESSEE; THAT THE AO HAS HEAVILY RELI ED UPON THE STATEMENT OF SHRI RAJENDRA AMIN SO AS TO ARRIVE AT THE CONCLUSIO N THAT SHRI AMIN WAS THE BENAMIDHAR OF THE ASSESSEE. SUCH STATEMENT IS AT PAGE NO.55 OF THE ASSESSEES PAPER BOOK. IN REPLY TO QUESTION NO.2 SHRI AMIN S TATED THAT HE WAS WORKING IN THE PETROL PUMP SINCE 1998 AND SAID PETROL PUMP WAS IN THE NAME OF G.K. & COMPANY. HOWEVER FROM NOVEMBER 2000 TO FEBRUARY 2002 HE WAS RUNNING KARELIBAUG PETROL PUMP ON CONTRACT BASIS WITH HPCL. IN QUESTION NO.6 THE AO ASKED HIM TO EXPLAIN THE SOURCE OF CREDIT IN THE BANK ACCOUNT NO.697 WHICH WAS IN THE NAME OF SHRI RAJENDRA AMIN. IN REPLY HE EXPLAINED THAT THIS ACCOUNT WAS PERTAINED TO HIS PETROL PUMP AT KARELIBAUG. CR EDIT IN THE BANK ACCOUNT IS FROM THE SALE OF PETROL/DIESEL. DEBIT IS MAINLY FO R PAYMENT MADE TO HPCL AGAINST THE MATERIAL SUPPLIED BY THE HPCL. OTHER W ITHDRAWALS WERE FOR SALARY MAINTENANCE CHARGES ETC. QUESTION NO.9 WAS WITH RE GARD TO THE INVESTMENT IN THE PETROL PUMP AND THE SOURCE OF INVESTMENT. IN R EPLY HE HAS STATED THAT FOR SECURITY DEPOSIT OF RS.2 50 000/- HE BORROWED THE M ONEY FROM SHRI DINESHBHAI PATEL AND THE BANK GUARANTEE WAS ALSO GIVEN AGAINST THE DEPOSIT OF SHRI DINESHBHAI PATEL WITH THE CENTRAL BANK. THEREAFTER IN QUESTION NO.12 OFFICER ASKED THAT WHEN THE AMOUNT OF SECURITY DEPOSIT AS W ELL AS BANK GUARANTEE IS PROVIDED BY THE DINESH PATEL WHY IT SHOULD NOT BE P RESUMED THAT PETROL PUMP BELONGS TO SHRI DINESH PATEL. IN REPLY HE HAS STA TED THAT THE PETROL PUMP WAS RUN BY HIM AND PROFIT OF THE PETROL PUMP ALSO BELON GS TO HIM. SINCE HE HAD VERY OLD RELATIONS WITH SHRI DINESH PATEL THEREFOR E THEY HAVE PROVIDED THE AMOUNT FOR MAKING THE SECURITY DEPOSITS WITH THE HP CL. QUESTION NO.13 WAS WITH REGARD TO THE INVESTMENT AND THE PLANT & MACHI NERY ETC. IN REPLY IT IS STATED THAT ALL THE INVESTMENT IN THE PETROL PUMP I S BY HPCL AND THIS FACT IS ALSO ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -7- MENTIONED IN THE CONTRACT BETWEEN HIM AND THE HPCL. FROM THE PERUSAL OF THE AGREEMENT WE DO NOT FIND ANY JUSTIFICATION FOR HOL DING THAT THE PETROL PUMP BELONGS TO THE ASSESSEE VIZ. DINESH PATEL. THE AGR EEMENT WAS BETWEEN THE HPCL AND SHRI RAJENDRA AMIN. SHRI RAJENDRA AMIN IN HIS STATEMENT ADMITTED THAT HE WAS RUNNING PETROL PUMP AS A CONTRACTOR. H E WAS WELL AWARE ABOUT THE DETAILS OF THE AGREEMENT BETWEEN HIMSELF AND THE HP CL. THE BANK ACCOUNT WITH REGARD TO SUCH PETROL PUMP IS IN HIS NAME AND HE WAS ABLE TO EXPLAIN THE ENTRIES IN SUCH BANK ACCOUNT. THEREFORE MERELY BE CAUSE HE WAS WORKING EARLIER IN THE ASSESSEES ANOTHER PETROL PUMP WOULD NOT BE SUFFICIENT TO HOLD HIM AS BENAMI OF THE ASSESSEE. THE FACT THAT HE WAS AN OLD EMPL OYEE OF THE ASSESSEE EXPLAINS THE REASON WHY THE ASSESSEE GAVE HIM MONEY AS A LOAN WHICH ENABLE HIM TO GIVE SECURITY DEPOSITS TO HPCL. THERE FORE MERELY BECAUSE THE ASSESSEE HAS GIVEN HIM LOAN OR HELPED HIM IN OBTAIN ING THE BANK GUARANTEE WILL NOT MAKE THE ASSESSEE AS THE REAL OWNER OF THE PETR OL PUMP. THE OWNER OF THE PETROL PUMP WAS HPCL AND IT WAS OPERATED BY SHRI RA JENDRA AMIN. PROFIT/LOSS FROM OPERATING SUCH PETROL PUMP WOULD BELONG TO SHR I RAJENDRA AMIN AND NOT THE ASSESSEE. IN VIEW OF THE ABOVE WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(A) THAT SHRI RAJENDRA AMIN WAS THE BENAMI OF THE ASSESSEE. 9. SIMILARLY WITH REGARD TO THE INVESTMENT OF RS.7 50 000/- (RS.2 50 000/- AS SECURITY DEPOSITS PLUS RS.5 00 000/- AS BANK GUA RANTEE) THE CIT(A) HAS RECORDED THE FOLLOWING FINDINGS. 5.2 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORD. SHRI RAJENDRA AMIN FOR OBTAINING THE CONTRACT OF HPCL WAS REQUIRED TO GIVE A BANK GUARAN TEE AND DEPOSIT OF RS.7.50 LAKH. SHRI RAJENDRA AMIN EXPLAINED THE SOU RCES IN HIS ASSESSMENT PROCEEDINGS. THE STATEMENT OF SHRI RAJE NDRA AMIN WAS RECORDED DURING THE COURSE OF SEARCH AND HE EXPLAIN ED THAT M/S.HINDUSTAN PETROLEUM (HP) HAD ALLOTTED PETROL PU MP IN HIS NAME. HE FURTHER STATED THAT THIS PETROL PUMP WAS RUN BY HIM AND THE PROFIT DERIVED FROM IT WAS ALSO BELONGED TO HIM. IN THIS PETROL PUMP ALL THE INVESTMENTS WERE MADE BY HPCL COMPANY ONLY. THIS I S ALSO REFLECTED IN THE CONTRACT WITH HPCL AND THE OWNERSHIP OF ALL THESE ASSETS ARE WITH HPCL. SHRI RAJENDRA AMIN CONDUCTED BUSINESS ON COM PANY OWNED ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -8- PREMISES. THE APPELLANT IS NOT RELATED TO SHRI RAJ ENDRA MIN. NEXT SHRI RAJENDRA AMIN WAS OPERATING THE PUMP INDEPENDENTLY. THERE IS NO MATERIAL AVAILABLE ON RECORD TO PROVE THAT THE PUMP IS THE BENAMI OWNERSHIP OF THE APPELLANT. SHRI RAJENDRA AMIN FOR OBTAINING THE CONTRACT OF HPCL WAS REQUIRED TO GIVE A BANK GUARAN TEE AND DEPOSIT OF RS.7.50 LAKH. SHRI RAJENDRA AMIN EXPLAINED THE SOU RCES IN HIS ASSESSMENT PROCEEDINGS. HE HAD CLARIFIED IN HIS C ASE THAT HE HAD PAID RS.2 50 000/- AS SECURITY DEPOSIT FOR OBTAINING THE LABOUR CONTRACT FROM HPCL. IT WAS PAID BY CHEQUES FROM HIS BANK ACCUNT. THE ASSESSEE HAS ALSO FURNISHED BANK GUARANTEE AGAINST DEPOSIT BY SH RI B.B. PATEL OF RS.3 00 000/- AND BY SHRI RAJESH A. PATEL OF RS.2 0 0 000/-. CONFIRMATIONS OF BOTH OF THEM WERE OBTAINED. MOREO VER SHRI BHAILALBHAI PATEL AND SHRI RAJESH PATEL ARE INDEPEN DENTLY ASSESSED TO TAX. AT THE TIME OF HEARING BEFORE US THE LEARNED DR WA S UNABLE TO CONTROVERT THE ABOVE FINDINGS. ON THE OTHER HAND THE ASSESSEE PR ODUCED THE EVIDENCES BY WAY OF CONFIRMATIONS FROM THE PERSONS WHOSE FDRS. W ERE UTILISED BY SHRI RAJENDRA AMIN FOR OBTAINING BANK GUARANTEE. IN VI EW OF THE ABOVE WE DO NOT FIND ANY MERIT IN THE GROUND NO.2 AND 3 RAISED BY T HE REVENUE IN ITS APPEAL THE SAME ARE REJECTED. 10. GROUND NO.4 READS AS UNDER: 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.50 000/- ON ACCOUNT OF ADVANCES TO M /S.G.K. & CO. BY THE BENAMI PERSONS OF THE ASSESSEE SHRI RAJENDRA AMIN. THE AO MADE THE ADDITION OF RS.50 000/- WITH THE FO LLOWING FINDINGS RECORDED AT PAGE NO.7: SRI AMIN HAD MADE THE FOLLOWING ADVANCES TO M/S.G. K.& COMPNAY A PROPRIETARY CONCERN OF SHRI DINESH B. PATEL. A.Y.2000-01 = RS.50 000/- A.Y.2003-04 = RS.30 000/- AS SRI AMIN IS HELD TO BE A BENAMI OF SHRI DINESH B . PATEL THEREFORE AN ADDITION OF RS.50 000/- IS MADE TO THE INCOME OF TH E ASSESSEE IN THE PRESENT ASSESSMENT YEAR. ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -9- 11. THE CIT(A) DELETED THE SAME WITH THE FOLLOWING FINDINGS: 6.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. THE STATEMENT OF SHRI RAJENDRA AMIN WAS RECORDED DURING THE COURSE OF SEARCH AND HE EXPLAIN ED THAT M/S.HINDSUTAN PETROLEUM (HP) HAD ALLOTTED PETROL PU MP IN HIS NAME. HE FURTHER STATED THAT THIS PETROL PUMP WAS RUN BY HIM AND THE PROFIT DERIVED FROM IT WAS ALSO BELONGED TO HIM. IN THIS PETROL PUMP ALL THE INVESTMENTS WERE MADE BY HPCL COMPANY ONLY. THIS I S ALSO REFLECTED IN THE CONTRACT WITH HPCL AND THE OWNERSHIP OF ALL THESE ASSETS ARE WITH HPCL. SHRI RAJENDRA AMIN CONDUCTED BUSINESS ON COM PANY OWNED PREMISES. THE APPELLANT IS NOT RELATED TO SHRI RAJ ENDRA AMIN. NEXT SHRI RAJENDRA AMIN WAS OPERATING THE PUMP INDEPENDE NTLY. THERE IS NO MATERIAL AVAILABLE ON RECORD TO PROVE THAT THE PUMP IS THE BENAMI OWNERSHIP OF THE APPELLANT. THE GENUINENESS OF THE TRANSACTIONS WAS NOT DOUBTED. SHRI RAJENDRA AMIN CANNOT BE HELD TO BE A BENAMI OF SHRI DINESH B. PATEL. HOWEVER THERE IS A CREDIT BALANC E OF RS.1 20 000/- IN HIS BOOKS WHICH CORRESPONDS WITH SIMILAR BALANCE IN THE BOOKS OF ACCOUNTS OF SHRI RAJENDRA AMIN. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE SHRI RAJENDRA AMIN IS RE AL OWNER THEREFORE THE APPELLANT IS NOT THE BENAMI OWNER OF THE PUMP A LLOTTED IN THE NAME OF SHRI RAJENDRA AMIN. HENCE THE ADDITION MADE ON ACCOUNT OF ADVANCES TO M/S.G.K. & CO. IS HEREBY DELETED. HENC E FIFTH GROUND OF APPEAL IS HEREBY ALLOWED. 12. AT THE TIME OF HEARING BEFORE US THE LEARNED D R WAS FAIR ENOUGH TO STATE THAT THIS GROUND WOULD BE CONSEQUENTIAL TO THE GROU ND NO.2 OF THE REVENUES APPEAL. WHILE ADJUDICATING THE GROUND NO.2 OF THE REVENUES APPEAL WE HAVE ALREADY HELD THAT SHRI RAJENDRA AMIN IS NOT BENAMI OF THE ASSESSEE AND HE IN HIS INDEPENDENT CAPACITY WAS RUNNING THE PETROL PUM P AT KARELIBAUG BARODA. IN VIEW OF THE ABOVE WE DO NOT FIND ANY MERIT IN T HE GROUND NO.4 RAISED BY THE REVENUE IN ITS APPEAL. THE SAME IS REJECTED. ITA NO.3051/AHD/2008 IN THE CASE OF SHRI DINESH B. PATEL FOR A.Y.2001- 2002: 13. THE ONLY SUBSTANTIVE GROUND RAISED IN THIS APPE AL BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.6 21 786/- M ADE BY THE AO ON ACCOUNT OF UNDISCLOSED PROFIT FROM PETROL PUMP. THIS GROUND I S IDENTICAL TO THE GROUND NO.2 OF THE REVENUES APPEAL FOR A.Y.2000-2001 AND FOR THE DETAILED ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -10- DISCUSSION ABOVE IN PARA-8 WE FIND NO MERIT IN THI S APPEAL OF THE REVENUE. ACCORDINGLY WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THIS APPEAL FOR THE REVENUE FOR A.Y.2001-2002. ITA NO.3052/AHD/2008 IN THE CASE OF SHRI DINESH B. PATEL FOR A.Y.2002- 2003: 14. GROUND NO.1 OF THE REVENUES APPEAL IS AGAINST THE ADMISSION OF ADDITIONAL EVIDENCES BY THE CIT(A). HOWEVER AT TH E TIME OF HEARING BEFORE US IT WAS NOT SPECIFIED BY THE REVENUE WHICH ADDITIONA L EVIDENCE WAS ADMITTED BY THE LEARNED CIT(A). MOREOVER WE FIND THAT THE CIT (A) CALLED FOR THE REMAND REPORT FROM THE AO AND ADJUDICATED THE APPEAL ONLY AFTER CONSIDERING THE REMAND REPORT OF THE AO. THEREFORE EVEN IF ANY AD DITIONAL EVIDENCE WAS ADMITTED BY THE CIT(A) HE HAD DULY ALLOWED OPPORTU NITY TO THE AO TO EXAMINE SUCH ADDITIONAL EVIDENCES AND FURNISH HIS COMMENTS THEREON. ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE GROUND NO.1 OF THE RE VENUES APPEAL THE SAME IS DISMISSED. 15. GROUND NO.2 OF THE REVENUES APPEAL READS AS UN DER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4 00 000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN DABHOI LAND. 16. AT THE TIME OF HEARING BEFORE US IT WAS POINTE D OUT BY THE LEARNED COUNSEL THAT THIS ADDITION WAS MADE ON THE BASIS OF SOME LOOSE PAPER WHICH WERE FOUND FROM SHRI BRIJESH K. CHAUHAN. THE ASSES SEE ALONG WITH SHRI CHAUHAN AND OTHERS PURCHASED A PIECE OF LAND IN RES PECT OF WHICH THE AO ON THE BASIS OF SOME NOTINGS ON THE LOOSE PAPERS RECOR DED THE FINDING THAT THE SUM OF RS.4 00 000/- WAS PAID BY THE ASSESSEE IN CASH. HE THEREFORE MADE THE ADDITION THEREFOR. IT WAS EXPLAINED BY THE ASSESSE E THAT AS PER THE LOOSE PAPER NO AMOUNT WAS PAID BUT IT WAS PAYABLE. THE CONTE NTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO BUT THE SAME WAS ACCEPTED BY THE CIT(A) AND HE RECORDED THE FOLLOWING FINDING: ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -11- 2.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUSNEL AS WELL AS GONE THROUGH THE RECORDS. ON PERUSAL OF ASSESSM ENT ORDER IT HAS BEEN NOTICED THAT THE APPELLANT HAD EXPLAINED THE N OTINGS ON PAGE 20 OF ANNEXURE SEIZED FROM THE ROLEX LOCKER NO.445 IN THE NAME OF MRS.HEMANGANI CHAUHAN MOTHER OF SHRI BRIJESH CHAUH AN ONE OF THE PARTNERS WHO ADMITTED THIS PAPER BELONGS TO HIM AN D IT CONTAINED A RECORD/NOTING OF PAYMENT DUE IN RESPECT OF DABHOI L AND OUT OF HIS FAMILYS LIABILITY TO PAY RS.16.25 LAKHS AGAINST WH ICH HE HAD MENTIONED THE AMOUNT TO BE PAID (CHUKAVVANA) AT RS.8 12 500/- . HOWEVER THE AO HAS NOT GIVEN ANY COMMENT BUT RELIED UPON THE ASSES SMENT ORDER (SURPA) THEREFORE THERE IS NO ALTERNATIVE LEFT EX CEPT TO ACCEPT THE PLEA OF THE APPELLANT THAT THE NOTINGS ON THIS PAGE CONTAIN ED THE AMOUNT TO BE PAID (CHUKAVVANA) WHICH IN GUJARATI MEANS CHUKAVVA NA. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN DABHOI LAND RS.4 00 000/- IS HEREBY DELETED. HENCE FIRST GROUND OF APPEAL IS HEREBY ALLOWED. 17. AT THE TIME OF HEARING BEFORE US IT WAS EXPLAI NED BY THE ASSESSEE THAT THE SIMILAR ISSUE AROSE IN THE CASE OF BRIJESH K. C HAUHAN FOR A.Y.2002-03 WHEREIN SIMILAR ADDITION MADE BY THE AO WAS SET ASI DE BY THE ITAT VIDE ITA NO.2747/AHD/2008 ORDER DATED 04.04.2009; THAT AFTER THE SET ASIDE ASSESSMENT THE ASSESSEE VIZ. SHRI BRIJESH K. CHAUHAN EXPLAINED BEFORE THE AO THAT AS PER THE LOOSE PAPER THE AMOUNT IS REFERRED AS CHUKAVVANA IN GUJARATI. THIS MEANS THE AMOUNT IS TO BE PAID. THUS AS PER THE L OOSE PAPER ITSELF THE AMOUNT WAS NOT ACTUALLY PAID BUT WAS PAYABLE. THEREFORE THE ADDITION CANNOT BE MADE. THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE AND VIDE ORDER PASSED UNDER SECTION 143(3) R.W.S. 254 OF THE IT ACT DATED 25.1 0.2010 DID NOT MAKE ANY ADDITION IN THIS REGARD. COPY OF THE ORDER IS PROD UCED BEFORE US. THE LEARNED DR WAS UNABLE TO CONTROVERT THE ABOVE SUBMISSION MA DE BY THE LEARNED COUNSEL. AS PER THE LOOSE PAPER THE AMOUNT WAS SH OWN AS CHUKAVVANA IN GUJARATI. IT WAS EXPLAINED BY THE ASSESSEE THAT CHUKAVVANA IN GUJARATI MEANS AMOUNT TO BE PAID. THIS EXPLANATION OF THE A SSESSEE IS ACCEPTED BY THE AO HIMSELF IN THE CASE OF SHRI BRIJESH K. CHAUHAN W HO IS ONE OF THE CO-OWNERS OF THE PROPERTY. IN VIEW OF THE ABOVE WE DO NOT FI ND ANY JUSTIFICATION TO ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -12- INTERFERE WITH THE ORDER OF THE CIT(A) IN THIS REGA RD. THE SAME IS ACCEPTED AND GROUND NO.2 OF THE REVENUES APPEAL IS REJECTED. 18. GROUND NO.3 OF THE REVENUES APPEAL READS AS UN DER: 3. THE LD.CIT(A)HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.2 40 000/- ON ACCOUNT OF INVESTMENT IN ATLADRA LAND. 19. THE FACTS RELATING TO THIS ADDITION RECORDED AT PAGE NO.4 OF THE ASSESSMENT ORDER READS AS UNDER: THAT THERE IS A DOCUMENT SALE DATED 04/03/2004 (PA GE 70 TO 74 OF A/34) SHOWING THAT SALE DEED OF PLOT OF LAND IN S.N O.91/1 ADMEASURING 300 SQ.MTR TO SHRI BHAILAL B. PATEL FOR A CONSIDERA TION OF RS.26 510/- SHRI BHAILAL B. PATEL WAS ASKED TO EXPLAIN THIS TRA NSACTION. HE STATED THAT HE HAS PURCHASED PLOT NO.A/1 FROM M/S.ASHSISH DEVELOPERS FOR AN AMOUNT OF RS.263 510/-. THE CONSIDERATION OF THE L AND IS HOWEVER STATED AT RS.26 510/- AS THE SAID FIRM WAS TO PAY AN AMOUN T OF RS.2.40 LACS TO SHRI DINESH B. PATEL AND THE SAME HAS BEEN ADJUSTED . NO EVIDENCE HAS BEEN TENDERED IN RESPECT OF THIS ADJUSTMENT. THE ASSESSEE WAS ASKED VIDE QUESTIONNAIRE DTD. 30/1 1/2006 TO GIVE REASON WHY THIS AMOUNT OF RS.2 40 000/- SHOULD NOT BE ADDED AS HIS UNDISCLOSED INCOME. VIDE HIS REPLY DATED 28/122/20 06 THE ASSESSEE AGREED TO THE FACT THAT RS.2 40 000/- HAD BEEN PAID BY M/S.ASHSISH DEVELOPERS TO SHRI BHAILAL B. PATEL ON HIS BEHALF A S AN ADJUSTMENT ENTRY. HOWEVER HE SAID THAT THIS RS.2.4 LACS WAS INCLUDED IN THE TOTAL SALES CONSIDERATION OF RS.19 LACS WHICH HAS ALREADY SHOWN BY HIM IN HIS RETURN. 20. THE CIT(A) ACCEPTED THE ASSESSEES CONTENTION T HAT THE SUM OF RS.2 14 000/- WAS THE AMOUNT WHICH THE ASSESSEE WAS TO RECEIVE FROM M/S.ASHSISH DEVELOPERS AND THIS AMOUNT WAS ADJUSTED BY SHRI BHAILAL B. PATEL ASSESSEES BROTHER AGAINST THE SALE CONSIDERATION W HICH HE WAS TO PAY TO M/S.ASHSISH DEVELOPERS. HOWEVER IN OUR OPINION T HE MATTER NEEDS FURTHER EXAMINATION AT THE END OF THE AO. THE ASSESSEE HAS NOT PRODUCED ANY CONFIRMATION FROM M/S.ASHSISH DEVELOPERS IN THIS RE GARD. IT IS ONLY ORAL ASSERTION OF THE ASSESSEE THAT A SUM OF RS.2 40 000 /- WAS RECEIVABLE BY THE ASSESSEE FROM M/S.ASHSISH DEVELOPERS AND WHICH WAS ADJUSTED BY SHRI BHAILAL ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -13- B. PATEL BROTHER OF THE ASSESSEE AGAINST THE AMOUN T PAYABLE BY HIM TO M/S.ASHISISH DEVELOPERS. THE ASSESSEE HAS ALSO NOT FURNISHED THE DATE-WISE DETAILS OF THE AMOUNT ACTUALLY RECEIVED BY THE ASSE SSEE AGAINST THE SALE CONSIDERATION OF RS.19 LACS RECEIVABLE FROM M/S. AS HISH DEVELOPERS. WE THEREFORE SET ASIDE THE ORDER OF THE AUTHORITIES BE LOW ON THIS POINT AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT H IM TO EXAMINE THIS ISSUE AFRESH AND IF NEED BE CALL FOR THE APPROPRIATE INF ORMATION UNDER SECTION 133(6) FROM M/S.ASHSISH DEVELOPERS. THEREAFTER HE WILL R E-ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT WHIL E ADJUDICATING THE ISSUE THE AO WILL ALLOW REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 21. GROUND NO.4 OF THE ASSESSEE APPEAL IS IDENTICAL TO THE GROUND NO.2 OF THE REVENUES APPEAL FOR A.Y.2000-2001 I.E. THE PRO FIT FROM PETROL PUMP AT KARELIBAUG. FOR THE DETAILED DISCUSSION IN PARA-8 ABOVE WE UPHOLD THE ORDER OF THE CIT(A) ON THIS POINT AND REJECT GROUND NO.4 OF THE REVENUES APPEAL. ITA NO.3053/AHD/2008 IN THE CASE OF SHRI DINESH B. PATEL FOR A.Y.2003- 2004: 23. GROUND NO.1 OF THE REVENUES APPEAL READS AS UN DER: 1. THE LD.CIT(A) ERRED IN ADMITTING ADDITIONAL EVI DENCE ESPECIALLY WHEN THE ASSESSEE HAD NOT ESTABLISHED THAT HE WAS P REVENTED BY SUFFICIENT CAUSE FROM PRODUCING SUCH EVIDENCES BEFO RE THE AO. 24. THE ABOVE GROUND IS IDENTICAL TO THE GROUND NO. 1 FOR A.Y.2002-03. WE HAVE ALREADY DISCUSSED THIS ISSUE WHILE ADJUDICATIN G THE GROUND NO.1 OF THE REVENUES APPEAL FOR A.Y.2002-2003. FOR THE DETAIL ED DISCUSSION THEREIN WE FIND NO MERIT IN THIS GROUND OF THE REVENUES APPEA L WHICH IS REJECTED ACCORDINGLY. 25. GROUND NO.2 READS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6 24 332/- ON ACCOUNT O UNDISCLOSED PROFITS OF BUSINESS OF PETROL PUMP CARRIED OUT AS ASSESSES BENANI. THE L D.CIT(A) OUGHT TO ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -14- HAVE UPHELD THE FINDINGS OF THE AO THAT SHRI RAJEND RA AMIN THE APPARENT OWNER OF THE BUSINESS WAS ASSESSEES BENAM I. 26 . THIS GROUND IS IDENTICAL TO GROUND NO.2 OF THE REVE NUES APPEAL FOR A.Y.2000-2001. FOR THE DETAILED DISCUSSION IN PARA -8 ABOVE WE FIND NO MERIT IN THIS GROUND THE SAME IS REJECTED. 27. GROUND NO.3 READS AS UNDER: 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.30 000/- ON ACCOUNT OF ADVANCES TO M /S.G.K & CO. LEARNED CIT(A) OUGHT TO HAVE UPHELD THE FINDING OF AO THAT THE ADVANCES WERE MADE BY THE ASSESSEES BENAMI. 28. GROUND NO.3 OF THE REVENUES APPEAL IS SIMILAR TO GROUND NO.4 OF THE REVENUES APPEAL FOR A.Y.2000-2001. FOR THE DETAIL ED DISCUSSION THEREIN WE FIND NO MERIT IN THE GROUND NO.3 OF THE REVENUES A PPEAL THE SAME IS REJECTED. ITA NO.3057/AHD/2008 IN THE CASE OF SHRI RAJENDRA A . AMIN FOR A.Y.2000-2001: 29. GROUND NO.1 READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5 00 000/- ON ACCOUNT OF UNDISCLOSED PROFITS FROM THE BUSINESS OF PETROL PUMP AT KARELIBAUG BARODA CARRI ED OUT BY THE ASSESSEE IN THE NAME OF HIS BENAMI SHRI RAJENDRA AM IN. 30. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE FACTS OF THE CASE ARE THAT DURING THE ACCO UNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE V IZ. SHRI RAJENDRA AMIN WAS RUNNING A PETROL PUMP AT KARELIBAUG BARODA. HE WA S RUNNING THIS PETROL PUMP AS A CONTRACTOR IN PURSUANCE TO THE CONTRACT BETWE EN HIMSELF AND HPCL. THE DEPARTMENT HAS TREATED HIM AS A BENAMI OF SHRI DINESH PATEL. THE CIT(A) ACCEPTED THAT HE WAS NOT BENAMIDHAR BUT RUNNING PETROL PUMP IN HIS INDIVIDUAL CAPACITY. WHILE ADJUDICATING THE REVENUES APPEAL IN THE CASE OF SHRI DINESH PATEL WE HAVE ACCEPTED THE ORDER OF THE CIT(A) IN THIS REGARD. NOW QUESTION ARISES WITH REGARD TO THE DETERMINATION OF INCOME F ROM PETROL PUMP BY HIM. ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -15- SHRI RAJENDRA AMIN DID NOT FILE ANY RETURN OF INCOM E ORIGINALLY. HOWEVER IN RESPONSE TO NOTICE UNDER SECTION 153C HE FURNISHED RETURN DISCLOSING THE INCOME OF RS.48 000/-. THE AO ASSESSED INCOME AT R S.5 LAKHS. WHILE MAKING SUCH ASSESSMENT HE REFERRED TO CASH WITHDRAWALS MAD E FROM BANK ACCOUNT NO.697 WITH CENTRAL BANK OF INDIA. THIS BANK ACCOU NT WAS IN THE NAME OF THE ASSESSEE I.E. SHRI RAJENDRA AMIN AND WAS PERTAINED TO HIS PETROL PUMP BUSINESS. THE AO ALLOCATED THE CASH WITHDRAWAL IN FOUR YEARS AS UNDER: A.Y.2000-01 = RS.5 00 000/- A.Y. 2001-02 = RS.6 21 786/- A.Y. 2002-03 = RS.6 79 263/- A.Y.2003-04 = RS.6 24 332/- TOTAL = RS.24 54 381/- ========= HE ESTIMATED THE INCOME OF THE ASSESSEE IN RESPECTI VE YEARS ON THE BASIS OF CASH WITHDRAWAL MADE BY SHRI AMIN FROM HIS BANK ACCOUNT. ACCORDINGLY HE DETERMINED THE INCOME BY A.Y.2000-2001 AT RS.5 00 0 00/- IN THE HANDS OF SHRI AMIN AS INCOME FROM PETROL PUMP. THE CIT(A) ACCEPT ED THE ASSESSEES CONTENTION AND DELETED THE ADDITION OF RS.5 00 000/ - WHICH WAS MADE BY THE AO OVER AND ABOVE THE INCOME RETURNED BY THE ASSESS EE. 31. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSEE HAS REFERRED THE AGREEMENT BETWEE N THE ASSESSEE AND THE HPCL AND POINTED OUT THAT AS PER THE AGREEMENT THE ASSESSEE IS ENTITLED TO REMUNERATION OF RS.24 800/- PER MONTH ONLY. IN ADDI TION HE RECEIVED COMMISSION OF RS.10 800/- PER 1000 LITERS OF LUBRIC ANTS SOLD BY HIM. THUS FOR THE SALE OF PETROL/DIESEL THE COMMISSION WAS FIXED AT RS.24 800/- PER MONTH; THAT AGAINST THE ABOVE COMMISSION THE ASSESSEE HAD TO INCUR VARIOUS EXPENDITURE FOR RUNNING AND MAINTAINING THE PETROL PUMP; THAT THE ASSESSEE HAS TO PROVIDE ONE MANAGER AND SEVEN PUMP ATTENDANTS. AS PER CAUSE-3 OF THE AGREEMENT BETWEEN THE ASSESSEE AND THE HPCL THE AS SESSEE HAS TO PAY SALARY TO THESE PERSONS; THAT VARIOUS CASH WITHDRAWALS MAD E FROM THE ASSESSEES BANK ACCOUNT WERE FOR MEETING THE EXPENDITURE OF RUNNING THE PETROL PUMP. IT WAS ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -16- ALSO EXPLAINED BY THE LEARNED COUNSEL THAT THE ASSE SSEE HAS EXPLAINED EACH AND EVERY CASH WITHDRAWAL FROM THE BANK ACCOUNT AND THE CIT(A) HAS REPRODUCED THE EXPLANATION OF THE ASSESSEE IN HIS ORDER IN THE CASE OF DINESH PATEL FOR A.Y.2000-2001 IN WHICH THE ASSESSEE HAS EXPLAINED T HE ENTIRE CASH WITHDRAWALS OF RS.24 54 381/-. THE SAME IS REPRODUCED BELOW: DATE DESCRIPTION AMOUNT RS. ACTUAL AMOUNT UTILISED FOR 11.02.2000 CASH 200000 DEMAND DRAFT IN FAVOUR OF HPCL 01.12.2000 TO CD-676 300000 CH.NO.280713 ISSUED TO SHRI BHAILALBHAI B. PATEL 28.02.2001 TRF.HCP 250048 DEMAND DRAFT IN FAVOUR OF HPCL 03.05.2001 NIAC 2188 CH.NO.242878 ISSUED TOWARDS MEDICLAIM INSURANCE PREMIUM. 13.12.2001 RINA SALES 170187 CH.NO.252246 ISSUED TO RINA SALES & SERVICE 20.12.2001 CASH 31000 CH.NO.252247 ISSUED TO RINA SALES & SERVICES. 01.01.2002 RINA SALES 17198 CH.NO.252261 ISSUED TO RINA SALES & SERVICES. 05.01.2002 PENZOL 6192 CH.NO.252259 ISSUED TO PENZOL. 22.01.2002 RINA SALES 14132 CH.NO.252282 ISSUED TO RINA SALES & SERVICE 22.02.2002 RINA SALES 3366 CH.NO.254511 ISSUED TO RINA SALES & SERVICES 06.03.2002 TRF. 9863 230000 CH.NO.254519 ISSUED D.B.PATEL 13.03.2002 SELF 200000 CASH WITHDRAWN FROM BANK 20.03.2002 SELF 5000 CASH WITHDRAWN FROM BANK 02.04.2002 RINA SALES 183847 CH.NO.254523 ISSUED TO RINA SALES & SERVICE 02.04.2002 CASH 100000 CASH WITHDRAWN FROM BANK 10.04.2002 CASH 50000 CASH WITHDRAWN FROM BANK 20.04.2002 TR. CD 1084 150000 CH.NO.254526 ISSUED TO G.K. & CO. (KARJAN) 13.05.2002 CASH 15800 CASH WITHDRAWN FROM BANK 23.05.2002 CASH 50000 CASH WITHDRAWN FROM BANK 13.08.2002 S.H.VOHRA 734000 CASH WITHDRAWN FROM BANK 08.10.2002 LIC 1285 CH. ISSUED FOR PAYMENT OF LIC OF MR.R.A. AMIN TOTAL 2425381 HE ALSO EXPLAINED THAT THE PAYMENT TO RINA SALES & SERVICES WAS MADE AGAINST THE PURCHASE OF LUBRICANTS. CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES WE DO NOT FIND ANY JUSTIFICATION FOR TREATING THE ENTIRE CASH WITHDRAWAL FROM THE BANK AS THE INCOME FROM THE ASS ESSEE FROM PETROL PUMP. IN FACT FROM THE ABOVE EXPLANATION IT WOULD BE EVI DENT THAT MOST OF THE AMOUNT ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -17- WITHDRAWN WAS FOR PURCHASE OF DRAFT IN FAVOUR OF HP CL OR PAYMENT MADE TO RINA SALES & SERVICES AGAINST THE SUPPLY OF LUBRICA NTS. THERE ARE SOME CASH WITHDRAWLS BUT IT IS NOT DISPUTED THAT THE ASSESSEE HAS TO INCUR THE EXPENDITURE IN CASH ALSO FOR RUNNING THE PETROL PUMP. IN VIEW OF THE ABOVE WE DO NOT FIND ANY JUSTIFICATION FOR THE ADDITION OF RS.5 00 000/- AS INCOME OF THE ASSESSEE FROM PETROL PUMP OVER AND ABOVE THE INCOME OF RS.48 000/- ALREADY DISCLOSED BY THE ASSESSEE. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) WHEREIN HE DELETED THE ADDITION OF RS.5 LAKHS. ACCORDINGLY G ROUND NO.1 OF THE REVENUES APPEAL IS REJECTED. 32. GROUND NO.2 OF THE REVENUES APPEAL READS AS UN DER: 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT BY THE ASSESSE E IN THE FORM OF SECURITY DEPOSITS OF RS.2 50 000/- AND BANK GUARANT EE OF RS.5 00 000/- 33. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. AS PER THE AGREEMENT BETWEEN ASSESSEE AND HPCL THE ASSESSEE HAS GIVEN SECURITY DEPOSIT OF RS.2 50 000/- AND ALSO BANK GUA RANTEE OF RS.5 00 000/-. THE AO TREATED THE SAME AS UNEXPLAINED INVESTMENT A ND ADDED IN THE INCOME OF THE ASSESSEE WHICH IS DELETED BY THE CIT(A) WIT H THE FOLLOWING FINDINGS: 3.3 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. SHRI RAJENDRA AM IN FOR OBTAINING THE CONTRACT OF HPCL WAS REQUIRED TO GIVE A BANK GUARAN TEE AND DEPOSIT OF RS.7.50 LAKH. SHRI RAJENDRA AMIN EXPLAINED THE SOU RCES IN HIS ASSESSMENT PROCEEDINGS. THE STATEMENT OF SHRI RAJE NDRA AMIN WAS RECORDED DURING THE COURSE OF SEARCH AND HE EXPLAIN ED THAT M/S.HINDUSTAN PETROLEUM (HP) HAD ALLOTTED PETROL PU MP IN HIS NAME. THE APPELLANT STATED IN THE STATEMENT RECORDED THAT HE PAID AN AMOUNT OF RS.2.50 LAKHS AS SECURITY DEPOSIT AND GIVEN BANK GU ARANTEE FOR AN AMOUNT OF RS.5.00 LAKHS. HE FURTHER CLARIFIED THAT HE HAD BORROWED RS.4.00 LAKHS (2+2) ON 25.02.2000 AND 11.03.2000 FR OM MR. DINESHBHIA PATEL AND HIS FAMILY BY CHEQUES WHICH IS REFLECTED IN M/S.R.A. AMINS BOOKS OF ACCOUNTS. BANK GUARANTEE OF RS.5.00 LAKH IS GIVEN AGAINST THE FDR OF SHRI DINESHBHAI PATEL WITH CENTRAL BANK. TH EREAFTER AS AND WHEN REQUIRED THE APPELLANT TAKEN LOAN FROM SHRI D INESHBHAI PATEL WHICH IS ALSO REFLECTED IN THIS ACCOUNT. KEEPING I N VIEW OF ABOVE FACTS ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -18- AND CIRCUMSTANCES OF THE CASE THE ADDITION ON ACCO UNT OF SECURITY DEPOSIT IS HEREBY DELETED SINCE THE APPELLANT HAS P ROVED IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE MONEY BORRO WED FROM DINESHBHAI PATEL FOR THE PURPOSE OF DEPOSITING THE SECURITY WITH HPCL. THEREFORE THE ADDITION MADE ON ACCOUNT OF SECURITY DEPOSIT IS HEREBY DELETED. HENCE SECOND GROUND OF APPEAL IS ALLOWED. 34. AT THE TIME OF HEARING BEFORE US THE REVENUE W AS UNABLE TO CONTROVERT THE ABOVE FINDINGS OF THE CIT(A). IN FACT DURING T HE COURSE OF STATEMENT OF THE ASSESSEE RECORDED ON OATH HE HAD EXPLAINED THAT FO R MAKING SECURITY DEPOSIT HE BORROWED MONEY FROM SHRI DINESHBHAI PATEL. HE H AD ALSO EXPLAINED THAT FOR MAKING BANK GUARANTEE SECURITY OF FDRS. OF DINESHB HAI AND HIS FAMILY MEMBERS WAS UTILISED. THE CONFORMATION OF DINESHBH AI AND HIS FAMILY MEMBERS WHOSE FDRS WERE UTILISED FOR OBTAINING THE BANK GUARANTEE WERE GIVEN THE SAME WERE ALREADY PROVIDED IN THE PAPER BOOK. IN VIEW OF THE ABOVE WE HOLD THAT THERE WAS NO UNEXPLAINED INVESTMENT BY THE ASSESSEE. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) IN THIS RE GARD AND REJECT THE GROUND NO.2 OF THE REVENUES APPEAL. 35. GROUND NO.3 OF THE REVENUES APPEAL READS AS UN DER: 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.50 000/- ON ACCOUNT OF ADVANCES TO M /S.G.K.& CO. BY THE BENAMI OF THE ASSESSEE SHRI RAJENDRA AMIN. 36. THE ASSESSEE AHS GIVEN THE FOLLOWING ADVANCES T O M/S.G.K.& COMPANY A PROPRIETORY CONCERN OF SHRI DINESH PATEL: I) A.Y.2000-01 = RS.50 000/- II) A.Y.2003-04 = RS.30 000/- THE ABOVE ADVANCES WERE DULY RECORDED IN THE ASSESS EES BOOKS OF ACCOUNTS AS WELL AS IN THE BOOKS OF M/S.G.K. & COMPANY. THE A O MADE THE ADDITION ON TWO GROUNDS; (I) THAT THE ASSESSEE WAS TREATED AS BENAMI OF SHRI DINESH PATEL AND (II) BOOKS OF ACCOUNTS OF THE ASSESSEE WERE REJ ECTED. THAT WHILE DECIDING GROUND NO.2 OF THE REVENUES APPEAL IN THE CASE OF DINESH PATEL FOR ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -19- A.Y.2000-2001 WE HAVE ALREADY HELD THAT SHRI RAJEN DRA AMIN IS NOT BENAMI OF SHRI DINESH PATEL AND (II) THE CIT(A) WHILE ADJU DICATING THE ADDITION OF RS.5 00 000/- TO THE TRADING RESULT HAS HELD THAT THE REJECTION OF THE BOOKS OF ACCOUNTS BY THE AO WAS WITHOUT ANY BASIS. WHILE AD JUDICATING THE GROUND NO.1 OF THE REVENUES APPEAL WE HAVE ALREADY UPHEL D THE ORDER OF THE CIT(A) IN THIS REGARD. WE THEREFORE HOLD THAT THERE WAS N O JUSTIFICATION FOR THE ADDITION OF RS.50 000/- MADE BY THE AO. THE CIT(A) RIGHTLY DELETED THE ADDITION IN THIS REGARD. THE GROUND NO.3 OF THE REVENUES APPEAL IS REJECTED. ITA NO.3058/AHD/2008 IN THE CASE OF SHRI RAJENDRA A . AMIN FOR A.Y.2001-2002: 37. THE ONLY GROUND RAISED IN THIS APPEAL IS AGAINS T THE ADDITION MADE BY THE AO TO THE INCOME FROM BUSINESS OF PETROL PUMP AT KA RELIBAUG BARODA. THIS GROUND IS IDENTICAL TO THE ROUND NO.1 OF THE REVENU ES APPEAL FOR A.Y.2000- 2001. FOR THE DETAILED DISCUSSION THEREIN WE DO N OT FIND ANY MERIT IN THIS GROUND OF THE REVENUE WHICH IS REJECTED AND THE AP PEAL IS DISMISSED. ITA NO.3059/AHD/2008 IN THE CASE OF SHRI RAJENDRA A . AMIN FOR A.Y.2003-2004: 38. GROUND NO.1 IS AGAINST THE DELETION OF ADDITION MADE BY THE AO TO THE PROFIT FROM PETROL PUMP AT KARELIBAUG BARODA. THI S GROUND IS SIMILAR TO THE GROUND IN THE APPEAL OF THE REVENUE FOR A.Y.2000-20 01. FOR THE DETAILED DISCUSSION THEREIN THIS GROUND OF THE REVENUES AP PEAL IS REJECTED. 39. GROUND NO.2 OF THE REVENUES APPEAL IS WITH REG ARD TO ADVANCE OF RS.30 000/- TO M/S.G.K. & CO. THIS GROUND IS SIMIL AR TO GROUND NO.3 OF THE REVENUES APPEAL FOR A.Y.2000-2001. FOR THE DETAIL ED DISCUSSION THEREIN THE GROUND NO.2 OF THE REVENUE IS REJECTED. 40. GROUND NO.3 OF THE REVENUES APPEAL READS AS UN DER: ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -20- 3. THE LEARNED CIT(A)HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2 60 000/- ON ACCOUNT OF ADVANCES MA DE OUT OF UNDISCLOSED INCOME. 41. THE AO HAS RECORDED THE FINDING THAT THE ASSESS EE HAS ADVANCED A SUM OF RS.2.60 LAKHS TO M/S.OM SHIVAM CORPORATION FOR P URCHASE OF PLOT. IT WAS EXPLAINED BY THE ASSESSEE THAT THIS AMOUNT IS REFLE CTED IN THE BOOKS OF ACCOUNTS. THE AO REJECTED THE ASSESSEES CONTENTION ON THE GR OUND THAT THE ASSESSEES BOOKS OF ACCOUNTS HAVE ALREADY BEEN REJECTED. HE T HEREFORE MADE THE ADDITION OF RS.260 000/- AS INCOME OF THE ASSESSEE FROM UNDI SCLOSED SOURCES. THE CIT(A) DELETED THE ADDITION. 42. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS NOT D ISPUTED BY THE REVENUE THAT THIS PAYMENT OF RS.2 60 000/- IS RECORDED IN THE AS SESSEES BOOKS OF ACCOUNTS. WHILE ADJUDICATING THE GROUND NO.1 OF THE REVENUES APPEAL FOR A.Y.2000- 2001 WE HAVE ALREADY HELD THAT THE REJECTION OF TH E ASSESSEES BOOKS OF ACCOUNTS BY THE AO WAS NOT JUSTIFIED. NO PLAUSIBLE REASONS WERE GIVEN BY THE AO FOR REJECTING THE BOOKS OF ACCOUNTS. NO DEFECT WAS POINTED OUT IN THE BOOKS OF ACCOUNTS EXCEPT HOLDING THAT THE ASSESSEE IS BENAMIDHAR OF SHRI DINESH PATEL. IN VIEW OF THE ABOVE WE HOLD THAT SINCE TH E SAID PAYMENT WAS DULY RECORDED IN THE ASSESSEES BOOKS THE SAME CANNOT B E TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. WE THEREFORE UPHOLD T HE ORDER OF THE CIT(A) ON THIS ISSUE AND REJECT THE GROUND NO.3 OF THE REVENU ES APPEAL. 43. IN RESULT REVENUES APPEAL NO.3050/AHD/2008 IS PARTLY ALLOWED. REVENUES APPEAL NO.3052/AHD/2008 IS DEEMED TO BE P ARTLY ALLOWED AND OTHER APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 18 TH MARCH 2011 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT ITA NO.3050 3051 3052 AND 3053/AHD/2008 AND ITA NO.3057 3058 AND 3059/AHD/2008 -21- PLACE : AHMEDABAD DATE : 18-03-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD