The DCIT, S.K. Circle,, Himatnagar v. Shri Harendrasingh Narayansing, Dist. Sabarkantha

ITA 318/AHD/2007 | 2003-2004
Pronouncement Date: 08-01-2010 | Result: Dismissed

Appeal Details

RSA Number 31820514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 318/AHD/2007
Duration Of Justice 2 year(s) 11 month(s) 21 day(s)
Appellant The DCIT, S.K. Circle,, Himatnagar
Respondent Shri Harendrasingh Narayansing, Dist. Sabarkantha
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 08-01-2010
Date Of Final Hearing 06-01-2010
Next Hearing Date 06-01-2010
Assessment Year 2003-2004
Appeal Filed On 18-01-2007
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AAHMEDABAD BEFORE S/SHRI BHAVNESH SAINI JM AND D.C.AGRAWAL AM DY. COMMISSIONER OF INCOME-TAX SABARKANTHA CIRCLE HIMATNAGAR. V/S . M/S N. G. PROJECTS HIMNAGAR DIST. SABARKANTHA. PAN NO.AAEFN 7652 F (APPELLANT) .. (RESPONDENT) AND DY. COMMISSIONER OF INCOME-TAX SABARKANTHA CIRCLE HIMATNAGAR. V/S . HARENDRASINGH NARAYANSING MEHTAPURA HIMNAGAR DIST. SABARKANTHA. PAN NO.AATPR3120M (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI P. ORAM SR.D.R. RESPONDENT BY:- SHRI SAKAR SHARMA AR O R D E R PER BHAVNESH SAINI JUDICIAL MEMBER. BOTH THE DEPARTMENTAL APPEALS ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF CIT(A) IX AHMEDABAD DATED 9 TH OCTOBER 2006 FOR THE ASSESSMENT YEAR 2003-04 AGAINST DIFFERENT ASSESSES MENTIONED ABOVE. ITA NO.316/AHD/2007 ASST. YEAR : 2003-04 ITA NO.318/AHD/2007 ASST. YEAR : 2003-04 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE FINDINGS OF THE AUTHORITIES BELOW. THE ISSUE OF ADDITION OF RS.13 25 144/- IS COMMON I N BOTH THE APPEALS THEREFORE BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSE OF THEM YEAR- WISE AS UNDER :- 3. ISSUE NO.1 THIS ISSUE ARISES IN ITA NO.316/AHD/2007 FOR ASSESSMENT YEAR 2003-04 CHALLENGING THE DELETION O F THE DISALLOWANCE OF RS.1 54 000/- BEING THE PAYMENT MADE IN CASH IN VIO LATION OF PROVISIONS OF SECTION 40A(3) OF THE IT ACT 1961. DURING THE S URVEY PROCEEDINGS UNDER SECTION 133 OF THE IT ACT CASH PAYMENTS WERE WORKED OUT FOR EXPENSES INCURRED BY V.M. PATEL WHO IS HANDLING WOR K OF RANJIT QUARRY WORKS WHATEVER THE PAYMENTS INCURRED BY HIM THAT PAYMENTS WERE GIVEN TO V.M. PATEL. A.O. NOTED THE CASH PAYMENTS A S PER ANNEXURE A14 IN A SUM OF RS.7 70 000/-. SINCE THESE PAYMENTS WER E MADE IN CASH IN VIOLATION OF SECTION 40A(3) OF THE IT ACT DISALLOW ANCE OF RS.1 54 000/- WAS MADE. IT WAS SUBMITTED BEFORE LD. CIT(A) THAT T HE SEIZED ANNEXURE- A-14 WAS PROVISIONAL ACCOUNT PREPARED BY THE EMPLOY EE OF THE ASSESSEE WHO LOOKS AFTER PAYMENTS FOR KUPCHI-GREET AND METAL THE CASH PAYMENT REPRESENTS AMOUNTS GIVEN TO HIM AS IMPREST FOR MAKI NG PAYMENTS TO M/S RANJIT QUARRY AS HE VISITS AT QUARRY ALMOST EVERY D AY. CASH PAYMENTS WERE GIVEN TO HIM AND IN TURN HE HAS MADE PAYMENTS OUT OF THE IMPREST ACCOUNT TO M/S RANJIT QUARRY WORKS WHICH ARE ALWAYS RS.20 000/- OR OF THE LESSER AMOUNT. THE SAME FIGURES TALLY WITH THE BOOKS OF M/S RANJIT QUARRY WORKS COPIES OF WHICH ARE ALSO FURNISHED. I T WAS ALSO SUBMITTED THAT ALL PAYMENTS ARE MADE AT THE SITE OF THE ASSES SEE WHERE BANKING FACILITIES ARE NOT AVAILABLE THEREFORE THE PAYMEN TS ARE NOT MADE IN CONTRAVENTION OF SECTION 40A(3) OF THE IT ACT. THE LD. CIT(A) CONSIDERED 3 THE SUBMISSIONS OF ASSESSEE AND MATERIAL ON RECORD AND DIRECTED TO DELETE THE DISALLOWANCE OF RS.1 54 000/-. THE FINDINGS OF LD. CIT(A) IN PARA 5.2 ARE REPRODUCED AS BELOW :- 5.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE. SO FAR AS PAYMENT MADE TO RANJIT QUARRY WORKS IS CONCERNED I.E. PAYMENT OF R S.7 70 000/- ON VARIOUS DATES IT IS THE CLAIM OF THE ASSESSEE THAT WORK IS BEING UNDERT AKEN AT VARIOUS SMALL SITES WHERE NO BANKING FACILITY IS AVAILABLE AND THEREFORE ASSE SSEES EMPLOYEE TAKE THE IMPREST AMOUNT WHICH IS DISBURSED TO VARIOUS PERSONS IN INS TALMENTS NONE OF WHICH EXCEEDS RS.20 000/-. THE ASSESSING OFFICER AND THE ADDL.CIT HAVE UNBELIEVED THIS AND THEY HAVE SIMPLY STATED THAT MAIN PARTNER OF THAT QUARRY WORK HAPPENED TO BE SON OF THE ASSESSEE. HOWEVER THIS FACT HAS NOT BEEN CONTROVER TED THAT THE PAYMENTS ARE MADE AT SITE WHERE NO BANKING FACILITIES WERE AVAILABLE WHI CH WAS ALSO ONE OF THE CLAIMS OF THE ASSESSEE. THE FACT REMAINS THAT AT THE WORK SITE BA NKING FACILITIES WERE NOT AVAILABLE AND THEREFORE AS PER EXCEPTIONS PROVIDED DISALLOWA NCE CANNOT BE MADE EVEN THOUGH THE PARTIES ARE RELATED. IF THE PAYMENT IS MADE AT THE WORK SITE WHERE BANKING FACILITIES ARE NOT AVAILABLE THE SAME FALLS WITHIN THE EXCEPTION PROVIDED IN RULE 6DD(H). THEREFORE DISALLOWANCE OF RS.1 54 000/- IS DIRECTED TO BE DELETED. COMING TO THE REMAINING DISALLOWANCE IT IS NOTICED THAT SO F AR AS PAYMENT OF RS.30 000/- ON 26.10.02 IS CONCERNED THE AMOUNT HAS BEEN SPENT ON A CAPITAL ITEM AND THEREFORE DOES NOT ATTRACT PROVISIONS OF SECTION 40A(3). PAYM ENT OF RS.55 000/- HAS BEEN MADE BY CHEQUE AND AGAIN IT HAS BEEN CAPITALIZED AND NOT CLAIMED AS REVENUE EXPENDITURE. THEREFORE EVEN IN RESPECT THIS SECTION 40A(3) IS N OT ATTRACTED. HOWEVER IN RESPECT OF REMAINING PAYMENTS OF RS.24 300/- RS.23 000/- 42 800/- AND RS.24 000/- TOTALING TO RS.1 14 100/- PAYMENT HAS BEEN MADE IN CASH AND THE RE IS NO EVIDENCE TO SHOW THAT THESE PARTIES INSISTED FOR CASH PAYMENT AS STATED B Y THE ASSESSEE. THEREFORE IN RESPECT OF THESE PAYMENTS PROVISIONS OF SECTION 40A(3) ARE ATTRACTED AND 20% OF THESE AMOUNTS AMOUNTING TO RS.22820/- IS HELD TO BE DISAL LOWABLE U/S 40A(3) OF THE ACT AND THE BALANCE DISALLOWANCE MADE U/S 40A(3) IS DIRECTE D TO BE DELETED.. 4. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT SINCE CASH PAY MENTS WERE MADE IN VIOLATION OF SECTIONS 40A(3) OF THE ACT THEREFORE ASSESSING OFFICER WAS JUSTIFIED IN RELYING UPON THE SEIZED DOCUMENTS FOR THE PURPOSE OF MAKING THE ADDITION. LD. DEPARTMENTAL REPRESENTATIVE ALSO SUBMITTED THAT THE PAYMENTS ARE MADE TO M/S RANJIT QUARRY WORKS IN WHI CH THE MAIN PARTNER IS THE SON OF THE ASSESSEE. THEREFORE THER E WAS NO JUSTIFICATION TO MAKE THE CASH PAYMENTS. 4 5. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO PB 27 TO 30 WHICH IS COPY OF THE LEDGER ACCOUNT OF THE ASSES SEE IN THE BOOKS OF M/S RANJIT QUARRY WORKS AND ALSO REFERRED TO PB 31 TO 3 6 WHICH IS LEDGER ACCOUNT OF M/S RANJIT QUARRY WORKS IN THE BOOKS OF ACCOUNT OF ASSESSEE AND SUBMITTED THAT ALL PAYMENTS ARE RS.20 000/- OR BELOW THAT AMOUNT AND SUBMITTED THAT SINCE THE LIFTING OF THE MATERIAL WA S GOING ON AT THE SITE OF THE ASSESSEE BY THE TRANSPORTER THEREFORE PAYMENT S WERE MADE TO THE TRANSPORTER WHERE NO BANKING FACILITIES ARE AVAILA BLE. THEREFORE THERE WAS JUSTIFICATION TO MAKE CASH PAYMENTS. HE HAS REL IED UPON THE CIRCULAR NO.220 DATED 31 ST MAY 1977 IN WHICH EXCEPTION IS PROVIDED IN RULE 6 DD(J) OF IT RULES FOR EXPLAINING THE JUSTIFICATION TO MAKE THE CASH PAYMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A). IT IS AN ADMITTED FACT THAT THE WOR K OF THE ASSESSEE WAS GOING ON AT THE SITES WHERE NO BANKING FACILITIES W ERE AVAILABLE. THE ASSESSEE KEPT THE EMPLOYEES WITH IMPREST MONEY WHIC H IS DISTRIBUTED TO M/S RANJIT QUARRY WORKS AND ALL THE PAYMENTS WERE A BOUT RS.20 000/- OR THE BELOW AMOUNT. THE LD. CIT(A) ON THE BASIS OF MA TERIAL ON RECORD CORRECTLY GAVE THE FINDING THAT AMOUNTS WERE PAID W HICH NEVER EXCEEDS RS.20 000/- IN CASH. THE FINDINGS OF THE CIT(A) IS ALSO SUPPORTED BY THE COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE AS WELL AS M/S RANJIT QUARY WORKS. SINCE AT THE SITE OF THE ASSESSEE NO BANKING FACILITIES ARE AVAILABLE THEREFORE CIRCULAR NO.220 OF CBDT (SUPRA) CLEARLY APPLIES TO THE CASE OF THE ASSESSEE IN WHICH EXCEPTION IS PROVIDED FOR MAK ING THE CASH PAYMENTS IF THE TRANSACTION IS MADE AT THE PLACE WHERE EITHE R THE PURCHASER OR THE SELLER DOES NOT HAVE A BANK ACCOUNT. SINCE THERE NO BANKING FACILITIES 5 WERE AVAILABLE AT THE SITE OF THE ASSESSEE THEREFO RE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. MORE SO WHEN TH E PAYMENTS ARE MADE IN RS.20 000/- OR BELOW RS.20 000/- AS ARGUED BY THE L D. COUNSEL FOR THE ASSESSEE AND AS PER FINDING GIVEN BY THE LD. CIT(A) ; WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD . CIT(A). WE CONFIRM HIS FINDING AND DISMISS THIS GROUND OF APPEAL OF THE RE VENUE. 7. GROUND NO.2 ON THIS ISSUE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.13 25 144/- BEING PEAK DEPOSIT IN THE BANK ACCOUNT IN THE NAME OF SHRI LALITSINGH J. RATHORE THE BENAMID AR OF THE ASSESSEE IN ITA NO.316/AHD/2007. HOWEVER IN ITA NO.318/AHD/200 7 THIS ADDITION WAS MADE ON PROTECTIVE BASIS WHICH LD. CIT(A) DELET ED BECAUSE SUBSTANTIAL ADDITION WAS MADE IN THE CASE OF N.G. P ROJECTS. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSING OFFICER MADE T HE ADDITION OF RS.13 25 144/- BEING DEPOSITS IN THE BANK ACCOUNT N O.541 WITH ORIENTAL BANK OF COMMERCE (OBC) IN THE NAME OF SHRI LALITSIN GH J. RATHOR. IN REPLY TO SHOW CAUSE NOTICE IT WAS SUBMITTED THAT AS SESSEE HAS NOT FILED THE RETURN OF INCOME IN RESPECT OF HPCL PETROL PUMP WH ICH WAS OBTAINED IN THE NAME OF SHRI LALITSINGH J. RATHORE WHO WAS THE EMPLOYEE AND RELATIVE OF HARENDRA SINGH N. RATHOD. THIS PETROL P UMP WAS RUN BENAMI IN THE NAME OF SHRI LALITSINGH J. RATHORE. FROM THE BANK STATEMENT IT WAS NOTED THAT THERE WERE TRANSACTIONS OF RS.1 88 22 95 5/- AND STATEMENT OF LALITSINGH J. RATHORE WAS RECORDED IN WHICH HE HAS EXPLAINED THAT PETROL PUMP IS HELD BY BENAMIDAR FOR HARENDRA SINGH N. RAT HOD WHO HAS AGREED TO PAY TAXES. THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE CONTENTIONS AND MADE ADDITION OF RS.13 25 144/- BEI NG PEAK AMOUNT IN THE AFORESAID BANK ACCOUNT SUBSTANTIVELY IN THE CAS E OF ASSESSEE M/S N. G. PROJECT AND ON PROTECTIVE ASSESSMENT WAS MADE IN TH E NAME OF SHRI HARENDRA SINGH N. RATHOD. THE ADDITIONS WERE CHALLE NGED BEFORE LD. 6 CIT(A) IN WHICH IT WAS SUBMITTED THAT THE FUNDS HAV E NOT BEEN PROVIDED BY THE ASSESSEE. THE CONFIRMATION OF M/S PANKAJ VIJ AY & CO. (M/S P.V.C) WAS FILED TO SHOW THAT AFORESAID AMOUNT WAS DEPOSITED BY THIS PARTY THROUGH CHEQUE IN THE AFORESAID BANK ACCOUNT AS ON 15.3.2003. THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE A SSESSING OFFICER FOR HIS COMMENTS. THE DETAILED SUBMISSIONS OF THE ASSES SEE ARE RECORDED IN THE IMPUGNED ORDER AND STATEMENT OF SHRI HARENDRA S INGH N. RATHOD PARTNER IN M/S N.G. PROJECT WAS ALSO REFERRED TO SH OW THAT HE HAS AGREED THAT PETROL PUMP OF HPCL WAS OBTAINED BENAMIDAR IN THE NAME OF LALITSINGH J. RATHORE AND THAT HE HAS AGREED TO PAY THE TAXES FOR THE INCOME EARNED TOWARDS THE SAID BANK ACCOUNT BEING T HE SOURCE OF INCOME FROM THE PETROL PUMP. IT WAS SUBMITTED THAT THE AFO RESAID AMOUNT OF RS.13 25 144/- IS DEPOSITED BY CHEQUE BY M/S P.V.C. THE INCOME FROM THE PETROL PUMP WAS OFFERED IN A SUM OF RS.11 682/- . THE DETAILED CASH BOOK BILL BOOK WERE PRODUCED BEFORE LD. CIT(A). IT WAS ALSO BRIEFLY SUBMITTED THAT M/S PVC IS TAKING DIESEL FOR THEIR T RUCKS FROM THE HPCL PETROL PUMP WHICH ARE SUPPLYING GREET/KUPCHI/METAL TO M/S N.G. GROUP. AS PER UNDERSTANDING WITH M/S N.G. PROJECTS THE DIE SEL SUPPLY IS ON CREDIT AS THERE WAS HUGE OUTSTANDING PAYABLE TO M/S PVC FOR THE SUPPLY. THUS M/S PVC OUT OF PAYMENT OF RS.13.50 LACS RECEIV ED FROM M/S N.G. PROJECTS MADE PAYMENT OF RS.13 25 144/- TO HPCL PET ROL PUMP A/C OF SHRI LALITSINGH J. RATHORE. IT WAS SUBMITTED THAT T HIS PAYMENT WAS MADE BY M/S PVC AGAINST DIESEL SOLD TO THEM. THE DETAILE D SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER AN D THE LD. CIT(A) AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER AND FURTHER CALLING SUBMISSIONS OF THE ASSESSEE AND AFTER RECORDING ALL THESE FACTS AND REPORTS IN THE IMPUGNED ORDER DELETED THE ENTIRE ADDITION B ECAUSE THE DEPOSIT IN THE BANK STANDS EXPLAINED ON THE BASIS OF EVIDENCES /MATERIAL AND PROTECTIVE ADDITION WAS DELETED IN THE CASE OF HARE NDRA SINGH N. RATHOD 7 IN ITA NO.318/AHD/2007. THE FINDINGS OF LD. CIT(A) IN PARA 7.2 ARE PRODUCED AS UNDER :- 7.2 I HAVE CAREFULLY CONSIDERED THE ISSUE. FIRST O F ALL IT IS TO BE POINTED OUT THAT A PETROL PUMP IS BEING RUN ACCOUNT OF WHICH IS REFLE CTED IN THE BANK ACCOUNT WITH ORIENTAL BANK OF COMMERCE. IT HAS BEEN ACCEPTED THA T THE PETROL PUMP IS ACTUALLY OWNED BY THE ASSESSEE. THEREFORE WHAT WAS TO BE AC TUALLY SEEN IS WHETHER INCOME OF THE SAID PETROL PUMP HAS BEEN TAKEN INTO ACCOUNT BY THE ASSESSEE OR NOT. SO FAR AS ASSESSING OFFICERS COMMENTS REGARDING FDS MADE IN BANK AND AMOUNT TRANSFERRED TO THE ASSESSEE IS CONCERNED IT IS SEEN THAT ENTIR E TRANSACTIONS ARE DULY RECORDED IN BOOKS OF THE ASSESSEE AND ALL THESE DOCUMENTS WERE ALREADY SENT TO THE ASSESSING OFFICER WHILE SEEKING HIS COMMENTS. IT APPEARS THAT THESE PAPERS WERE NOT PROPERLY EXAMINED OTHERWISE IT WOULD HAVE BEEN VERY CLEAR TH AT THESE AMOUNTS ARE DULY RECORDED IN BOOKS OF ACCOUNTS. SIMILARLY SO FAR AS ASSESSING OFFICERS OBSERVATION REGARDING PANKAJ VIJAY & CO. IS CONCERNED FROM THE BILL BOOK IT IS SEEN THAT VARIOUS PARTIES ARE PURCHASING PETROLEUM PRODUCTS FROM THIS PETROL PUMP AND ONE OF THEM IS PANKAJ VIJAY & CO. WHO ARE ONE OF THE MAIN SUPPLIER S OF GRIT AND METAL TO THE ASSESSEE. THEY HAVE SUPPLIED GOODS WORTH RS.93 LAKH S TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ITSELF AND AS PER UNDERSTANDING WITH THE ASSESSEE DIESEL IS BEING SUPPLIED FROM THIS PETROL PUMP BECAUSE OF OUTSTANDI NG PAYMENTS ON ACCOUNT OF GRIT METAL ETC. THE SAID COMPANY HAS MADE PAYMENT OF RS. 13.50 LAKHS OUT OF PAYMENTS RECEIVED FROM THE ASSESSEE. APART FROM THAT THE ASS ESSEE HAS MET ALL THE OBSERVATIONS OF THE ASSESSING OFFICER IN HIS COUNTER COMMENTS. T O SUM UP IT IS TO BE NOTED THAT PEAK ENTRY IN THE BANK ACCOUNT IS FULLY EXPLAINED AND BA SICALLY WHAT IS TO BE ADDED IN ASSESSEES HANDS IS THE INCOME EARNED FROM THIS PET ROL PUMP WHICH HAS BEEN WORKED OUT AT RS.11 682/- BY THE ASSESSEE. HOWEVER CONSID ERING THE FACT THAT THERE WERE VARIOUS DISALLOWANCE ETC. INCOME IS TAKEN AT RS.20 000/- FROM THIS PETROL PUMP AND THE SAME IS BEING ADDED TO INCOME BECAUSE FROM THE PETROL PUMP BECAUSE ASSESSEE BASICALLY EARNED COMMISSION FROM SELLING DIESEL ETC . AS DISCUSSED EARLIER THE PEAK BALANCE IS FULLY EXPLAINED AND THEREFORE ADDITION O N ACCOUNT OF PEAK BALANCE IS DIRECTED TO BE DELETED AND ITS PLACE INCOME FROM PE TROL PUMP AT RS.20 000/- IS DIRECTED TO BE TAKEN AS INCOME OF THE ASSESSEE FROM PETROL PUMP. 8 8. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT SINCE BANK ACC OUNT WAS NOT SHOWN TO THE REVENUE AUTHORITIES AND IT WAS ADMITTEDLY BE NAMIDAR ACCOUNT OF THE ASSESSEE M/S N.G. PROJECTS THEREFORE ASSESSING OF FICER WAS JUSTIFIED IN MAKING THE ADDITION OF THE PEAK AMOUNT DEPOSITED IN THE BANK ACCOUNT NO.541 WITH OBC BEING UNEXPLAINED. THE LD. DEPARTME NTAL REPRESENTATIVE SUBMITTED THAT EVEN THE INVESTMENT I S NOT TAKEN INTO CONSIDERATION EITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(A) UNDER HPCL PETROL PUMP FOR WHICH ASSESSEE HAS NEVER FILED ANY RETURN OF INCOME. THE LD. DEPARTMENTAL REPRESENTATIVE THEREF ORE SUBMITTED THAT FINDING OF THE LD. CIT(A) IS NOT JUSTIFIED IN DELET ING THE SUBSTANTIVE ADDITION. ON THE OTHER HAND LD. COUNSEL FOR THE AS SESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO PB 68 WHICH IS THE COPY OF THE PROFIT AND LOSS ACCOUNT OF HPCL PETROL PUMP HELD BY SHRI LALITSINGH J. RATHORE SHOWING PROFIT O F RS.11 682/-. LD. AUTHORISED REPRESENTATIVE REFERRED TO PB 47 WHICH I S THE AGREEMENT BETWEEN HPCL AND LALITSINGH J. RATHORE FOR RUNNING THE PETROL PUMP. PB 71 IS THE COPY OF THE BANK ACCOUNT NO.541 TO SHOW T HAT RS.13 25 144/- WAS DEPOSITED IN THE AFORESAID BANK ACCOUNT BY M/S PVC THROUGH CHEQUE ON 15 TH MARCH 2003. THE LD. AUTHORISED REPRESENTATIVE REF ERRED TO PB 75 WHICH IS COPY OF BOOKS OF ACCOUNT SHOWING THE BANK ACCOUNT IN WHICH THE AFORESAID PAYMENT IS NOTED ON BEHALF OF M/S PVC. HE HAS ALSO REFERRED TO PB 87 WHICH IS THE CERTIFICATE FROM OBC CERTIFYING THAT AFORESAID AMOUNT IS DEPOSITED IN THE BANK ACCOUNT THROUGH CHEQUE BY M/S PVC. HE HAS ALSO REFERRED TO PB 88 TO 105 WHICH IS THE LEDGER ACCOUN T OF M/S PVC TO SHOW DIESEL WAS SOLD ON VARIOUS DATES DURING F.Y. RELEVA NT TO A.Y. IN QUESTION AND THAT PAYMENT WAS MADE BY THIS PARTY IN ACCOUNT NO.541 WITH OBC THROUGH CHEQUE ON 15.3.2003 IN A SUM OF RS.13 25 14 4/-. LD. COUNSEL FOR THE ASSESSEE ACCORDINGLY SUBMITTED THAT THE AFORESA ID AMOUNT DEPOSITED IN 9 THE BANK ACCOUNT WITH OBC STANDS EXPLAINED AND CANN OT BE TREATED AS UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT THEREFORE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. IT IS ADMITTED FACT THAT PETROL PUMP IS RUN BY LALITSINGH J. RATHORE BENAMIDAR ON BEHALF OF THE ASSESSEE M/S N.G . PROJECTS. ALL THE DETAILS OF THE PETROL PUMP ARE REFLECTED IN THE BAN K ACCOUNT WITH OBC. IT IS ALSO ADMITTED FACT THAT INCOME FROM THE HPCL PET ROL PUMP WAS NOT DISCLOSED TO THE REVENUE AUTHORITIES. THE ASSESSEE HAS SHOWN INCOME FROM THE PETROL PUMP AT RS.11 682 AND THE LD. CIT(A) EST IMATED THE SAME INCOME AT RS.20 000/-. NEITHER THE REVENUE NOR THE ASSESSEE IS IN APPEAL CHALLENGING THE AFORESAID FINDINGS OF THE LD. CIT(A ) MAKING THE ADDITION ON ACCOUNT OF INCOME FROM THE PETROL PUMP IN THE HA NDS OF THE ASSESSEE. NOW THE QUESTION IS LEFT FOR CONSIDERATION WHETHER DEPOSITS IN THE BANK ACCOUNT NO.541 WITH OBC WAS UNEXPLAINED PEAK DEPOSI T. THE MATERIAL ON RECORD AS NOTED ABOVE CLEARLY SUGGEST THAT M/S PVC WAS PURCHASING DIESEL FROM HPCL PETROL PUMP BELONGING TO THE ASSES SEE M/S N.G. PROJECTS. THIS PARTY WAS SUPPLYING MATERIAL TO THE ASSESSEE FOR WHICH SEPARATE PAYMENTS ARE MADE. IT IS PROVED ON RECORD THAT M/S PVC MADE THE PAYMENT OF RS.13 25 144/- IN THE ACCOUNT OF HPC L PETROL PUMP THROUGH CHEQUE ON 15.3.2003 FOR PURCHASE OF DIESEL. THUS THE FINDINGS OF THE LD. CIT(A) ARE SUPPORTED BY THE ENTRIES CONTAIN ED IN THE BANK ACCOUNT NO.541 WITH OBC (PB 73) BOOK ENTRY IN ACCOUNT (PB 82) BOOK CERTIFICATE OF OBC (PB 87) AND LEDGER ACCOUNT OF M/ S PVC PURCHASING DIESEL FROM HPCL PETROL PUMP (PB 105). THE ABOVE FA CTS AND MATERIAL/EVIDENCES ON RECORD CLEARLY PROVE THAT HPC L PETROL PUMPS BANK ACCOUNT WITH OBC RECEIVED TRANSFER ENTRY THROU GH BANKING CHANNEL OF RS.13 25 144/- WHICH WAS PAID BY M/S PVC. ALL TH ESE TRANSACTIONS ARE 10 DULY RECORDED IN THE RECORDS. THEREFORE SUCH PEAK ENTRY CANNOT BE TREATED AS UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT OF HPCL PETROL PUMP. SINCE THE PEAK DEPOSIT ENTRY IS EXPLAINED THROUGH THE EVI DENCES AND MATERIAL ON RECORD THEREFORE WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). HOWEVER WE MAY NOTE TH AT IT IS ADMITTED FACT THAT THE BUSINESS OF HPCL PETROL PUMP WAS NEVER SHO WN BY THE ASSESSEE M/S N.G. PROJECTS BEFORE THE AUTHORITIES BELOW. HOW EVER LD. CIT(A) HAS TAKEN CARE OF IN MAKING THE ADDITION ON ACCOUNT OF INCOME EARNED BY THE AFORESAID PETROL PUMP LD. CIT(A) DID NOT EXAMINE T HE ISSUE OF THE INVESTMENT MADE BY THE ASSESSEE IN THE AFORESAID PE TROL PUMP AT ANY POINT OF TIME. SINCE THE INVESTMENT IN THE PETROL PUMP OW NED BY THE ASSESSEE BENAMIDAR IN THE NAME OF LALITSINGH J. RATHORE IS N OT EXAMINED BY THE AUTHORITIES BELOW AT ANY TIME THEREFORE WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE QUESTION OF INVESTMENT BY THE ASSESS EE IN THE AFORESAID PETROL PUMP IN ACCORDANCE WITH LAW IF SO DEEMED FIT AND PROPER. WITH THESE OBSERVATIONS THE DEPARTMENTAL APPEAL STANDS DISMISSED ON GROUND NO.2 IN THE CASE OF M/S N.G. PROJECTS. SINCE THE SU BSTANTIVE ADDITION IS DELETED BY LD. CIT(A) AND CONFIRMED BY US THEREFOR E PROTECTIVE ASSESSMENT WOULD NOT STAND. ACCORDINGLY THE SOLITA RY GROUND IN THE CASE OF HARENDRA SINGH N. RATHOD IS ALSO DISMISSED. AS A RESULT DEPARTMENTAL APPEALS IN BOTH THE CASES ON THIS ISSUE ARE DISMISS ED. 10. IN THE RESULT BOTH THE DEPARTMENTAL APPEALS STA NDS DISMISSED. SD/- SD/- (D.C.AGRAWAL) (BHAVNESH SAINI) (ACCOUNTANT MEMBER) JU DICIAL MEMBER AHMEDABAD DATED : 08/01/2010 ORDER PRONOUNCED IN OPEN COURT ON 08/01/2010 11 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD