The ITO, Ward-8(4),, Ahmedabad v. Zora Traders Ltd.,, Ahmedabad

ITA 352/AHD/2009 | 2005-2006
Pronouncement Date: 31-12-2010 | Result: Dismissed

Appeal Details

RSA Number 35220514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 352/AHD/2009
Duration Of Justice 1 year(s) 10 month(s) 27 day(s)
Appellant The ITO, Ward-8(4),, Ahmedabad
Respondent Zora Traders Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-12-2010
Date Of Final Hearing 28-12-2010
Next Hearing Date 28-12-2010
Assessment Year 2005-2006
Appeal Filed On 03-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVNESH SAINI JUDICIAL MEMBER) ITA.NO.352/AHD/2009 [ASSTT. YEAR : 2005-2006] ITO WARD-8(4) AHMEDABAD. VS. ZORA TRADERS LTD. C/O. SHRI BAHUBALI S. SHAH 15 NANDI HILL NR.UNIQUE PARK SOCIETY OPP: ISRO SATELLITE AHMEDABAD 380 015. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ROBIN RAWAL ASSESSEE BY : SHRI SUNIL H. TALATI O R D E R G.D. AGARWAL VICE-PRESIDENT : THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XIV AH MEDABAD DATED 17.11.2008 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER P ASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. 2. THE GROUND NO.1 OF THE ASSESSEE WHICH READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING EXEMPTION U/S.10(38) OF RS.44 21 282/- IN RESPECT OF PROFITS ON SALE OF SHARES. LOOKING TO THE FACTS OF THE CASE THE CUIT(A) OUGHT TO HAVE UPHELD THE DECISION OF THE AO TO TREAT THE PROFIT ON SALE OF S HARES AS INCOME FROM BUSINESS AND PROFESSION AS AGAINST THE LONG TERM CA PITAL GAIN AS CLAIMED BY THE ASSESSEE. 3. AT THE TIME OF HEARING BEFORE US IT IS STATED B Y THE LEARNED DR THAT THE ASSESSEE HAD SHOWN THE SHARES IN THE BALANCE SHEET AS STOCK-IN-TRADE YEAR AFTER YEAR. MOREOVER THE ASSESSEE HAD UTILISED THE BORROWED MO NEY FOR THE ACQUISITION OF SHARES. BORROWED MONEY COULD BE UTILISED FOR ACQUISITION OF SHARES ONLY WHEN A PERSON IS DEALING IN SHARES. HE THEREFORE SUBMITTED THAT THE AO RIGHTLY TREATED THE PROFIT FROM THE SALE OF SHARES AS BUSINESS INCOME AND THE CIT(A ) WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE HELD THE SAME TO BE CAPITAL G AIN. HE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF THE AO MAY BE RESTORED. ITA.NO.352/AHD/2009 -2- 4. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE ASSESSEE HAD ACQUIRED THESE SHARES LONG BACK APPROXIMATELY FIVE TO TEN YEARS B EFORE. THAT THE ASSESSEE HAD ALWAYS SHOWN SHARES IN THE BALANCE SHEET AS INVEST MENT. HOWEVER IN THE SCHEDULE OF THE INVESTMENT DUE TO SOME CLERICAL ERROR BY TH E STAFF OF THE CHARTERED ACCOUNTANT THE SHARES WERE SHOWN AS STOCK-IN-TRADE. HOWEVER THE SHARES WERE ALWAYS HELD AS INVESTMENT AND WERE ALSO SHOWN AS INVESTMENT IN BAL ANCE SHEET. HE PRODUCED COPY OF THE BALANCE SHEET FROM F.Y.1996-907 (RELEVANT TO TH E A.Y.1997-98) TO F.Y.2004-05 (RELEVANT TO THE A.Y.2005-2006). HE ALSO POINTED O UT THAT THE ALLEGATION OF THE LEARNED DR THAT BORROWED MONEY WAS UTILISED FOR THE ACQUISITION OF SHARES IS FACTUALLY INCORRECT. THE SHARE CAPITAL AND RESERVES & SURPLU S OF THE ASSESSEE ARE MUCH MORE THAN THE INVESTMENT IN SHARES. THAT THE AO HIMSELF HAS ALSO NOT DISALLOWED ANY INTEREST PAID BY THE ASSESSEE WHICH ALSO ESTABLISHE S THE ASSESSEES CONTENTION THAT THE BORROWING WAS UTILISED FOR THE PURPOSE OF BUSINESS AND NOT FOR INVESTMENT IN SHARES. 5. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE RELEVANT FINDING RE CORDED BY THE AO READS AS UNDER: IN VIEW OF ABOVE AND IN ABSENCE OF ANY SATISFACTOR Y EXPLANATION FROM THE ASSESSEE THE ASSESSEES CLAIM TO TREAT THE TRANSAC TION AS LONG TERM CAPITAL GAIN IS NOT ACCEPTED AND THE ENTIRE SALE PROCEED OF THE SHARES HELD UNDER STOCK IN TRADE HAS BEEN TREATED AS THE BUSINESS INCOME AN D TAXED ACCORDINGLY. HOWEVER THE LOSS OF RS.547631 IS RESPECT OF ATUL L TD. MAY BE CONSIDERED AS LONG TERM CAPITAL LOSS WHICH IS ALLOWED TO BE CARRI ED FORWARD. IN VIEW OF THIS THE ASSESSEES CLAIM U/S.10(38) IN RESPECT OF THE S ALE OF SHARES AS MENTIONED ABOVE IS REJECTED AND THE SALE PROCEED OF RS.49689 13N(RS.5011340 RS.42427) IS TREATED AS BUSINESS INCOME OF THE ASSE SSEE AND TAXED ACCORDINGLY. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE IT ACT ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FROM THE ABOVE WE FIND THAT THE AO HAS TREATED THE SURPLUS FROM THE SALE OF SHARES AS BUSINESS INCOME ON THE GROUND THAT THE SHARES WERE HELD AS STOCK-IN-TRADE IN THE ASSESSEES BALANCE SHEET. HOWEVER THE ASSESSEE HA S FURNISHED BEFORE THE AO THE BALANCE SHEET RIGHT FROM A.Y.1997-98 AND WE FIND TH AT IN THE BALANCE SHEET OF EACH AND EVERY YEAR SHARE IS SHOWN AS INVESTMENT (AT COS T). WE ALSO FIND THAT THE AO HAD TREATED THE LOSS FROM THE SALE OF SHARES OF ATUL LT D. AS LONG TERM CAPITAL LOSS. WHY THIS DISTINCTION IS MADE IS NOT POINTED OUT IN THE ASSESSMENT ORDER. THE ONLY REASON APPEARS TO BE THAT WHEREVER THERE WAS A PROFIT THE AO TREATED THE PROFIT AS PROFIT FROM THE BUSINESS BUT WHEN THERE IS A LOSS ON SALE OF S HARES OF ONE COMPANY IT WAS TREATED ITA.NO.352/AHD/2009 -3- AS LONG TERM CAPITAL LOSS. THE CIT(A) HAS CONSIDER ED THE ENTIRE ISSUE AT LENGTH AND HELD AS UNDER: 2.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS AS ADVANCED BY THE A.R. OF THE APPELLAN T. FROM THE DETAILS FURNISHED BY THE A.R. IT IS SEEN THAT THE APPELLAN T WAS NOT ENGAGED IN THE BUSINESS OF BUYING AND SELLING OF SHARES AND THE IN VESTMENT MADE IN SHARES WERE HELD AS VESTMENTS RIGHT FROM ORIGIN IN THEIR R ESPECTIVE YEARS OF ACQUISITION. IN FACT THE A.O. TREATED THE INVESTMEN T IN SHARES AS BUSINESS INCOME ON THE GROUND THAT IT HAD BEEN SHOWN AS STOC K IN-TRADE FOR THE YEAR CHIDED ON 31-3-2004 BUT AS ADMITTED BY THE APPELLA NT THERE WAS AN UNINTENTIONAL MISTAKE COMMITTED BY THE APPELLANT IN PREPARATION OF ACCOUNTS/BALANCE SHEET WHEREBY IT WAS SHOWN WRONGL Y AS STOCK IN TRADE INSTEAD OF INVESTMENTS. SINCE THE APPELLANT WAS ENG AGED IN THE BUSINESS OF GIVING BUILDING ON RENT AND INVESTMENTS IN SHARES & SECURITIES AND IT WAS HOLDING THESE SHARES CONTINUOUSLY IN THE SAME QUANT ITY AND NO BUSINESS ACTIVITY IN SHARES AND SECURITIES HAS BEEN DONE IN ANY OF THE SHARES DURING ITS INVESTMENT PERIOD THE ACTION OF AO IN TREATING THE PROFIT ON SALE OF SHARES HELD BY THE APPELLANT AS BUSINESS INCOME IS HELD TO BE RIOT JUSTIFIED AND HENCE HE IS DIRECTED TO TREAT THE SAME AS LONG TERM CAPITAL GAIN AS CLAIMED BY THE APPELLANT AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES A ND THE FACTS OF THE CASE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON TH IS POINT. THE ASSESSEE HAD ACQUIRED THE SHARES LONG BACK. THERE IS NO FREQUENT PURCHAS E AND SALE OF SHARES. THE ALLEGATION OF THE LEARNED DR THAT THE BORROWED MONEY HAS BEEN UTILISED FOR PURCHASE OF SHARES HAS NOT BEEN PROVED. MOREOVER THE AO HAD NOT MADE ANY SUCH ALLEGATIONS AND THERE IS NO DISALLOWANCE OF INTEREST. CAPITAL AND RESERV E OF THE ASSESSEE IS MUCH MORE THAN THE INVESTMENT IN SHARES. CONSIDERING THE TOTALITY OF THE ABOVE FACTS WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF TH E CIT(A) ON THIS POINT THE SAME IS UPHELD AND GROUND NO.1 OF THE REVENUE IS REJECTED. 6. GROUND NO.2 OF THE REVENUES APPEAL READS AS UND ER: 2. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.25 LACS MADE U/S.69 OF THE IT ACT IN RESPECT OF UNEXPLAINED INVESTMENT MADE IN THE BONDS OF NATIONAL HOUSING BOARD. LOOKI NG TO THE FACTS OF THE CASE THE CIT(A) OUGHT TO HAVE UPHELD THE DECISION OF THE AO. 7. AT THE TIME OF HEARING BEFORE US IT IS STATED B Y THE LEARNED DR THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE CLAIMED TO H AVE MADE INVESTMENT OF RS.25 LAKHS IN NATIONAL HOUSING BANK FOR THE PURPOSE OF C LAIMING DEDUCTION UNDER SECTION 54EC. THAT THE AO ASKED THE ASSESSEE TO EXPLAIN TH E SOURCE OF SUCH INVESTMENT THE ITA.NO.352/AHD/2009 -4- ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE AND THERE FORE THE AO MADE THE ADDITION OF RS.25 LAKHS FOR UNEXPLAINED INVESTMENT. THE CIT(A) WITHOUT PROPERLY APPRECIATING THE FACT DELETED THE ADDITION. HE FURTHER STATED T HAT THE CIT(A) ADMITTED THE ADDITIONAL EVIDENCE THOUGH THE AO HAD ALLOWED ADEQUATE OPPORTU NITY TO THE ASSESSEE TO PRODUCE THE NECESSARY DETAILS DURING THE ASSESSMENT PROCEED INGS. HE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE RESERVED AND THAT OF THE AO MAYBE RESTORED. 8. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT DURI NG THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THERE W AS A MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN RAYMOND WOOLEN MILLS LT D. AND SHAREHOLDERS OF INDIAN CHRONICLE LTD. BY VIRTUE OF THE ABOVE MOU 50 000 NON-CONVERTIBLE DEBENTURES WERE RECEIVED BY THE SHAREHOLDERS OF IND IAN CHRONICLE LTD. THE ASSESSEE BEING THE SHAREHOLDER OF INDIAN CHRONICLE LTD. RECE IVED 25 000 DEBENTURES WHICH WERE REDEEMED FOR THE SUM OF RS.25 LAKHS. THE ASSE SSEE INVESTED THE SUM OF RS.25 LAKHS IN NATIONAL HOUSING BANK. THAT THE ENTIRE T RANSACTION OF RECEIPT OF THE DEBENTURES FROM THE RAYMOND WOOLEN MILLS LTD. BY TH E ASSESSEE AND OTHER SHAREHOLDER OF THE INDIAN CHRONICLE LTD. IS DULY SU PPORTED BY THE MOU BETWEEN THE RAYMOND WOOLEN MILLS LTD. AND THE INDIAN CHRONICLE LTD. THAT THE DEBENTURES WERE REDEEMED AND THE ASSESSEE RECEIVED RS.25 LAKHS FROM SUCH REDEMPTION. SINCE ENTIRE AMOUNT WAS INVESTED BY THE ASSESSEE IN THE BONDS OF NATIONAL HOUSING BANK ENTIRE CAPITAL GAIN OF RS.25 LAKHS WAS EXEMPT UNDER SECTIO N 54EC. THAT IN THE ASSESSMENT ORDER THE AO HAS MENTIONED THAT HE IS MAKING ADDIT ION FOR UNEXPLAINED INVESTMENT UNDER SECTION 69 BUT WHILE COMPUTING THE INCOME H E HAD IN FACT DISALLOWED THE CLAIM UNDER SECTION 54EC. NO ADDITION IS MADE UNDER SECT ION 69. HE HAS STATED THAT THE ENTIRE TRANSACTION OF REDEMPTION OF DEBENTURE AND I NVESTMENT IN NATIONAL HOUSING BANK IS MADE BY THE CHEQUE AND DULY ACCOUNTED FOR I N THE ASSESSEES BOOKS OF ACCOUNTS. THEREFORE THERE IS NEITHER ANY JUSTIFIC ATION FOR ADDITION FOR UNEXPLAINED INVESTMENT UNDER SECTION 69 NOR FOR DENIAL OF EXEMP TION UNDER SECTION 54EC. 9. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE FINDING OF THE AO I N THIS REGARD AT PAGE NO.7 OF THE ASSESSMENT ORDER READS AS UNDER: ITA.NO.352/AHD/2009 -5- HOWEVER THE ASSESSEE HAS NOT GIVEN ANY COMPLIANCE TO THIS OFFICE LETTER DATED 12.10.2007. THUS THE INVESTMENT OF RS.25000 00 MADE IN N.H.B. REMAINED UNVERIFIABLE AS THE SOURCE OF INVESTMENT H AS NOT SATISFACTORILY BEEN EXPLAINED BY THE ASSESSEE. IN VIEW OF THIS I T IS PRESUMED THAT THE ASSESSEE HAS MADE THE INVESTMENT OUT OF UNDISCLOSED SOURCES FOR CLAIMING THE DEDUCTION U/S.54EC OF THE I.T.ACT. THEREFORE THE ADDITION OF RS.25 LAKHS BEING UNEXPLAINED INVESTMENT U/S.69 OF THE I. T.ACT IS MADE ON THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T.ACT ARE INITIATED FOR FURNISHING INACCURATE PAR TICULARS OF INCOME. (DISALLOWANCE OF RS.25 00 000/-) THE COMPUTATION OF INCOME BY THE AO IS AS UNDER: INCOME FROM HOUSE PROPERTY: RENT INCOME 1320287 LESS: DEDUCTION U/S.24(A) @ 30% 396086 924201 PROFIT & GAIN OF BUSINESS OR PROFESSION NET PROFIT AS PER PROFIT & LOSS A/C. 7513498 ADD: DISALLOWABLES/ADDITIONS: DEPRECIATION AS PER BOOKS OF ACCOUNTS 307491 PROP: EXPS ON EXEMPTED DIVI. INCOME 100000 LOSS ON SALE OF SHARES 590058 997549 LESS: INCOME CONSIDERED SEPARATELY: DIVIDEND INCOME 483427 CAPITAL GAIN ON SURRENDER OF BONDS 2500000 RENT INCOME 1320287 4303714 DEPRECIATION AS PER STATEMENT 111362 LESS: DISALLOWANCE AS DISCUSSED ABOVE 109307 2055 4205278 INCOME FROM CAPITAL GAIN SALE OF ITEM AS PER STATEMENT 2500000 LESS: EXEMPTION CLAIMED U/S.54EC AS DISCUSSED ABOVE NIL 2500000 7629479 INCOME FROM OTHER SOURCES: DIVIDEND INCOME (BEING EXEMPT U/S.34 383427 NIL TOTAL INCOME 7629479 ROUNDED OFF 7629480 ITA.NO.352/AHD/2009 -6- FROM THE ABOVE IT IS EVIDENT THAT THERE IS A CONTR ADICTION BETWEEN THE FINDING IN THE ASSESSMENT ORDER AND THE FINAL COMPUTATION OF THE I NCOME. IN THE FINDING PORTION THE AO HAS OPINED FOR MAKING THE ADDITION OF RS.25 LAKH S AS UNEXPLAINED INVESTMENT UNDER SECTION 69. THERE IS NO ADVERSE FINDING FOR DENYING THE DEDUCTION UNDER SECTION 54EC. BUT IN THE COMPUTATION PORTION THER E IS NO ADDITION UNDER SECTION 69 ON THE OTHER HAND EXEMPTION UNDER SECTION 54EC CLA IMED BY THE ASSESSEE WAS DISALLOWED. THE CIT(A) ACCEPTED THE ASSESSEES CON TENTION WITH THE FOLLOWING FINDING: 3.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE A R. OF APPELLANT I AM IN AGREEMENT WITH THE CONTENTI ON OF APPELLANT THAT THERE CANNOT BE ANY UNEXPLAINED FUNDS AS BOOKS OF ACCOUNTS AND VOUC HERS WERE DULY AUDITED AS PER COMPANIES ACT IT IS FURTHER SEEN THAT THE APPELLANT HAD TWO OPTIONS EITHER TO CLAIM IT AS LONG TERM CAPITAL GAIN OR CLAIM EXEMPTION U/S. 5 4EC IT HAD OPTED TO CLAIM EXEMPTION U/S. 54EC OF THE I.T. ACT WHICH IS CORRE CT FROM THE DETAILS SUBMITTED BY THE A.R. DURING THE APPELLATE PROCEEDINGS IT IS SE EN THAT THE CLAIM OF APPELLANT U/S. 54EC IN RESPECT OF CONSEQUENTIAL DIFFERENCE IN LONG TERNS CAPITAL GAIN WAS CORRECTLY MADE AS THE CONDITIONS LAID DOWN IN THE SAID SECTI ON HAVE BEEN FULFILLED AND THE APPELLANT FURNISHED THE DETAILS OF INVESTMENTS MADE . 3.4 THE APPELLANT DURING THE COURSE OF APPEAL HEARI NG FILED ADDITIONAL EVIDENCE UNDER RULE 46A OF I.T. RULES IN FORM OF COPY OF LET TER DATED 2-11-1999 ALONG WITH NECESSARY EVIDENCES AS PER PAGES 44 TO 50 OF THE PA PER HOOK AND IT WITS SUBMITTED THAT ON ACCOUNT OF INSUFFICIENT DINE GIVEN BY THE A .O. AND BECAUSE OF DISPUTE AMONGST THE BROTHERS OF DIRECTOR OF THE APPELLANT C OMPANY THE SAME COULD NOT BE FILED BEFORE THE A.O. THE SAID ADDITIONAL EVIDENCE WAS FORWARDED TO THE A.O. FOR HIS EXAMINATION AND REPORT. IN RESPONSE THE A.0 REPORT ED VIDE HIS REPORT DATED 6-11- 2008 THAT THE ALLEGATION MADE BY THE APPELLANT THAT SUFFICIENT TIME HAD NOT BEEN GIVEN TO IT AND IT COULD NOT PRODUCE THE EVIDENCE D UE TO REASONABLE CAUSE VIZ. A FAMILY DISPUTE WAS NOT CORRECT AS CAN BE SEEN FROM THE RECORDS AS THE APPELLANT WAS ASKED TO FILE THE EVIDENCE VIDE LETTER 12-10-2007 W HICH WAS DULY SERVED UPON IT ON 16-10-2007 AND THE ASSESSMENT ORDER WAS PASSED ON 2 6/11/07 I.E. AFTER A PERIOD OF MORE THAN ONE MONTH. THE A.O. THEREFORE SUBMITTED THAT THE APPELLANT WAS GIVEN SUFFICIENT OPPORTUNITY TO PRODUCE THE EVIDENCE AND THE CASE OF THE APPELLANT DID NOT FALL UNDER RULE 46(L) WHEREBY ADMISSION OF ADDITION AL EVIDENCE CAN BE ALLOWED THE A.O. IN HIS REPORT ALSO STATED THAT THE SOURCE OF I NVESTMENT OF RS.25 LAKHS IN THE BONDS OF NHB WAS NOT FORTHCOMING FROM THE LETTER DT : 22-11-1999 THE REPORT OF A.O. WAS GIVEN TO THE AR FOR REBUTTAL. THE AR SUBM ITTED THAT EVEN THOUGH THE APPELLANT WAS GIVEN TIME TO FILE THE EVIDENCE IT C OULD NOT FILE THE SAME DUE TO SEVERE DISPUTES BETWEEN TWO BROTHERS OF THE FAMILY AND THE GROUND OF INSUFFICIENT TIME WAS TAKEN BECAUSE FOR SUCH DETAILS NOT ONLY SUFFICIENT BUT SUBSTANTIAL TIME WAS REQUIRED AS DETAILS WERE NOT KEPT HANDY AND WERE TO BE CALLE D FROM OUT OF CITY AND THE RULE 46A WAS INTRODUCED EXCEPTIONALLY FOR SUCH CASES. TH E A.R. THEREFORE PLEADED THAT THE ADDITIONAL EVIDENCE BE ADMITTED AND GENUINE CLA IM OF EXEMPTION U/S.54E BE GRANTED. CONSIDERING THE FACTS MENTIONED BY THE A.R . IN HIS REPLY TO REMAND REPORT OF A.O. I AM OF THE OPINION THAT THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FURNISHING THE EVIDENCE IN TIME DUE TO SEVERE DISPUTE PREVAILING IN THE FAMILY AT THAT TIME AND THE EVIDENCES WERE NOT HANDY AND THE SAME WERE TO BE COLLECTED FROM OUT OF CITY. I THEREFORE ADMIT THE ADDITIONAL EVI DENCE FILED BY THE APPELLANT UNDER ITA.NO.352/AHD/2009 -7- RULE 46A OF THE I.T RULES. SINCE THE AMOUNT INVESTE D IN NHB WAS THE SAME AMOUNT WHICH WAS RECEIVED ON REDEMPTION FOR THE DEBENTURES THE SOURCE OF INVESTMENT STANDS WELL EXPLAINED. I THEREFORE HOLD THAT THE ACTION OF A.O. IN TAXING THE AMOUNT U/S.69 OF THE IT ACT IS NOT IN ORDER AND DIRECT THE AO TO ALLOW THE CLAIM OF RS.25 LAKHS U/S 54EC OF THE ACT. THUS THE CIT(A) HELD THAT THE AO WAS NOT JUSTIFIED IN TAXING THE AMOUNT UNDER SECTION 69 OF THE I.T.ACT AND HE ALSO DIRECTED THE AO TO ALLOW THE CLAIM OF RS.25 LAKHS UNDER SECTION 54EC OF THE ACT. THE REVENUE I S IN APPEAL BUT HAS NOT CHALLENGED THE FINDING OF THE CIT(A) FOR ALLOWING T HE EXEMPTION UNDER SECTION 54EC. SO FAR AS THE ADDITION UNDER SECTION 69 IS CONCERNE D WE FIND THAT WHILE COMPUTING THE INCOME OF THE ASSESSEE NO SUCH ADDITION IS MADE AND THEREFORE THIS GROUND OF THE REVENUE IS INFRUCTOUS. EVEN OTHERWISE THE CIT(A) HAS RECORDED THE FINDING THAT THE INVESTMENT IN NATIONAL HOUSING BANK IS DULY DEBITED IN THE ASSESSEES BOOKS OF ACCOUNTS AND THE SAME HAS BEEN MADE BY CHEQUE. THI S FINDING HAS NOT BEEN CONTROVERTED BEFORE US. THE LEARNED DR HAS ALSO CH ALLENGED THE ADMISSION OF THE ADDITIONAL EVIDENCES BY THE CIT(A). HOWEVER WE FI ND THAT THE CIT(A) HAS RECORDED THE REASONS FOR ADMITTING THE ADDITIONAL EVIDENCES UNDER RULE 46A AND HAS ALSO ALLOWED OPPORTUNITY TO THE ASSESSEE TO EXAMINE SUCH EVIDENCES AND SUBMIT THE REMAND REPORT. IN VIEW OF THE ABOVE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS POINT THE SAME IS SUSTAINED AND THE GROUND NO.2 OF THE REVENUES APPEAL IS REJECTED. 10. IN THE RESULT THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 31 ST DECEMBER 2010. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-12-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD