Shri Bhagvanjibhai Mavjibhai Bavarva, Navsari v. The ACIT.,Cent.Circle-4,, Surat

ITA 3850/AHD/2007 | 2003-2004
Pronouncement Date: 09-04-2010 | Result: Dismissed

Appeal Details

RSA Number 385020514 RSA 2007
Assessee PAN ADSPP3911G
Bench Ahmedabad
Appeal Number ITA 3850/AHD/2007
Duration Of Justice 2 year(s) 5 month(s) 27 day(s)
Appellant Shri Bhagvanjibhai Mavjibhai Bavarva, Navsari
Respondent The ACIT.,Cent.Circle-4,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 09-04-2010
Date Of Final Hearing 22-03-2010
Next Hearing Date 22-03-2010
Assessment Year 2003-2004
Appeal Filed On 12-10-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE SHRI D T GARASIA JM & SHRI A N PAHUJA AM] ITA NO.3850/AHD/2007 (ASSESSMENT YEAR:-2003-04) SHRI BHAGVANJIBHAI MAVJIBHAI BAVARVA PROP. OF M/S KRISHNA SARAN GRINDING WORKS NAVSARI [PAN:ADSPP3911G] V/S THE ASSISTANT COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-4 SURAT [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI HARDIK VORA AR REVENUE BY:- SHRI P ORAM DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 24-08-2007 OF THE LD.CIT(A)-II AHMEDABAD RAISES T HE FOLLOWING GROUNDS: 1 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN MAKING THE ADDITION OF RS.4 07 562/- ON ACCOUNT OF CASH CREDIT. 2 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED IN PARTLY CON FIRMING THE ADDITION OF RS.40 000/- OUT OF TOTAL ADDITION OF RS.1 04 000 /- MADE BY AO ON ACCOUNT OF HOUSEHOLD EXPENSES . 3 IT IS THEREFORE PRAYED THAT ABOVE ADDITIONS MADE BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) MAY PLEASE BE DELETED . 4 APPELLANT CRAVES LEAVE TO ADD ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL . 2 AT THE OUTSET THE LEARNED AR ON BEHALF OF THE ASSESSEE DID NOT PRESS GROUND NO.2 IN THE APPEAL. THEREFORE THE SAID GROUND IS DISMISSED. 3 AS REGARDS GROUND NO.1 FACTS IN BRIEF AS PER R ELEVANT ORDERS ARE THAT A SEARCH U/S 132 OF THE INCOME-TAX ACT 1 961 [ HEREINAFTER ITA NO.3850/AHD/2007 2 REFERRED TO AS THE ACT] WAS CONDUCTED IN THE PREM ISES OF THE ASSESSEE ON 17-11-2000. DURING THE SEARCH CASH OF RS.6 23 050/- WAS FOUND AT THE RESIDENCE OF THE ASSESSEE. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTE D AN EXPLANATION REGARDING THE SAID CASH. SINCE THE ASSE SSEE COULD EXPLAIN THE CASH OF RS.2 15 488/- OUT OF THE TOTAL CASH OF RS.6 23 050/- THE ASSESSING OFFICER[AO IN SHORT] T REATED THE DIFFERENCE AMOUNT OF RS.4 05 562/-AS UNDISCLOSED IN COME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) VIDE ORDER DAT ED 24-01-2003 TREATED THE CASH OF RS.4 07 562/- AS EXPLAINED IN V IEW OF DOCUMENTARY EVIDENCE ON RECORD AND THEREBY DELETED THE SAID ADDITION. IN THE CAPITAL ACCOUNT ENCLOSED WITH THE RETURN FOR THE YEAR UNDER CONSIDERATION FILED ON 20.1.2004 DECLARI NG INCOME OF RS.1 06 950/- THE AO NOTICED THAT THE ASSESSEE HAD CREDITED AN AMOUNT OF RS.4 05 562/- IN CASH ON 26.11.2002 WITH THE NARRATION FOUND DURING THE COURSE OF SEARCH. SINCE THE LD. CIT(A) HAD ALREADY DELETED THE ADDITION THE AO WAS OF THE OPI NION NO CASH REMAINED UNEXPLAINED. ACCORDINGLY A SHOWCAUSE NOT ICE DATED 03- 02-06 REQUIRING THE ASSESSEE TO EXPLAIN THE CREDIT OF CASH OF RS.4 07 562/- IN CAPITAL ACCOUNT WAS ISSUED BY THE AO. IN RESPONSE THE ASSESSEE DID NOT SUBMIT ANY EXPLANATION .ACCORD INGLY THE AO MADE AN ADDITION OF RS.4 07 562/- HOLDING AS UNDE R: 3.5..HOWEVER NO REPLY HAS BEEN RECEIVED FROM TH E ASSESSEE TILL DATE. THE ASSESSEES SILENCE ITSELF CLARIFIES BEYOND ANY SHADOW OF DOUBT THAT THE CAPITAL INCREASED BY RS.4 07 562/- IS NOTHING BUT T HE UNACCOUNTED CASH WHICH WAS FOUND DURING THE COURSE OF SEARCH ON 17-1 1-2000 AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE IN THE BLO CK ASSESSMENT WHICH WAS ULTIMATELY DELETED BY THE CIT(A) ON THE BASIS O F THE BOGUS EVIDENCES FURNISHED DURING THE COURSE OF APPELLATE PROCEEDING S. SINCE THE ASSESSEE HAS TOTALLY FAILED TO EXPLAIN THE SOURCE OF INTRODU CTION OF THE CAPITAL OF RS.4 07 562/- EVEN AFTER GIVING SUFFICIENT OPPORTUN ITIES THE SAME IS TREATED AS THE ASSESSEES UNEXPLAINED CASH CREDIT AND ADDED TO THE TOTAL INCOME UNDER SECTION 68 OF THE ACT. .. ITA NO.3850/AHD/2007 3 4 ON APPEAL THE LD. CIT(A) UPHELD THE ADDITION H OLDING AS UNDER: 2.1 IN THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED THAT THERE WAS CONFUSION IN THE NOTICE ABOUT THE DATE OF HEARING AND HENCE THEY COULD NOT ATTEND. IT IS STATED THAT THE CAPITAL ACC OUNT WAS DEBITED BY THE AMOUNT OF CASH OF RS.6 LAKH SEIZED AND THEREFORE CREDIT ENTRY OF RS.4 07 562/- IS NOT RESULT OF ANY ADDITIONAL CASH FLOW. IT IS SUBMITTED THAT THE ENTRY FOR THE CASH SEIZED WAS MADE AS DEBIT TO THE CAPITAL ACCOUNT AND HENCE THE AMOUNT OF RS.4 07 562/- WAS REQUIRED TO B E CREDITED. THUS THERE WAS NO UNACCOUNTED INCOME OF THE ASSESSEE. IN THE C OURSE OF ASSESSMENT PROCEEDINGS FOR THE BLOCK PERIOD IT WAS CLAIMED THA T CASH FOUND BELONGED TO FAMILY MEMBERS AND THIS WAS ACCEPTED BY THE CIT( APPEALS). THUS NO CASH FLOW HAS BEEN INTRODUCED AND HENCE THE CREDIT SIDE OF CAPITAL ACCOUNT CANNOT BE CONSIDERED AS INCOME. 2.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE ABOVE SUBMISSIONS. ON CONSIDERATION OF THE FACTS AND THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT I OBSERVE THAT THE SEARCH HAD TAKEN PLACE IN NOVEMBER 2000 I.E. IN THE YEAR RELEVANT TO ASSESS MENT YEAR 2001-02. THE PRESENT ASSESSMENT YEAR IS AFTER TWO YEARS. TH E CASH WAS CONSIDERED AS EXPLAINED BY THE CIT(A) IN THE BLOCK ASSESSMENT PROCEEDINGS ON THE GROUND THAT IT BELONGED TO VARI OUS ENTITIES OF THE FAMILY AND GROUP. THUS THIS CASH WAS ALREADY ACCEPTED TO BE EXPLAINED. HENCE THERE WAS NO QUESTION OF ROUTING IT THROUGH THE CAP ITAL ACCOUNT. IF THE CASH WAS SEIZED IT WAS AT THE RELEVANT TIME TO BE CREDI TED TO THE ACCOUNT OF THE RESPECTIVE PERSONS. IT IS NOT UNDERSTOOD AS TO HOW THE ASSESSEE CLAIMS AS DEBIT TO THE CAPITAL ACCOUNT OF THE APPELLANT FOR S UCH CASH SEIZED. EVEN IF WE CONSIDER IT TO BE CORRECT ENTRY IT IS ON ACCOUN T OF ADJUSTED AGAINST THE TAX LIABILITY AND HENCE CREDIT FOR THE AMOUNT OF RS .4 07 562/- IS NOT AT ALL EXPLAINED. THE ADDITION MADE BY THE A.O. WAS TH EREFORE JUSTIFIED AND THIS GROUND OF APPEAL IS DISMISSED. 5 THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE WHILE REITERATING THEIR SUBMISSIONS BEFORE THE CIT(A) CON TENDED THAT THE LD. CIT(A) WHILE UPHOLDING THE ADDITION IGNORED THE ENTRY DATED 26.11.2002 IN RESPECT OF DEBIT OF RS. 6 LACS SEIZE D DURING THE SEARCH . SINCE THE CASH WAS ULTIMATELY FOUND TO BE EXPLAINED BY THE LD. CIT(A) VIDE ORDER DATED 24-1-2003 THE SAID CR EDIT IN THE CAPITAL ACCOUNT CANNOT BE CONSIDERED AS INCOME OF THE ASSES SEE. THE LD. AR ADDED THAT THE SAID ENTRIES WERE MADE ON RECEIPT OF BLOCK ITA NO.3850/AHD/2007 4 ASSESSMENT ORDER DATED 25.11.2002.THE LEARNED DR O N THE OTHER HAND RELIED ON THE ORDERS OF THE AO AND THE CIT(A) . 6 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THOUGH THE LD. AR APPEARING ON B EHALF OF THE ASSESSEE EXPLAINED THAT DEBIT ENTRY OF RS. 6 LACS C ASH SEIZED DURING THE SEARCH AND CORRESPONDING CREDIT ENTRY OF CASH O F RS. 4 07 562/- FOUND UNEXPLAINED WERE MADE IN THE CAPITAL ACCOUNT ONLY AFTER RECEIPT OF BLOCK ASSESSMENT ORDER DATED 25.11.2002 THE LD. AR DID NOT EXPLAIN AS TO HOW CASH SEIZED DURING SEARCH ON 17.11.2000 WAS TREATED IN THE CASH BOOK FOR THE RELEVANT ASSESSMEN T YEAR ESPECIALLY WHEN THE CASH WAS CLAIMED TO BE EXPLAINE D BEFORE THE LD. CIT(A) .IF THE CLAIM OF THE ASSESSEE THAT CASH SEI ZED ON 17.11.2000 WAS FULLY EXPLAINED THERE SEEMS TO BE NO REASON FO R THESE ENTRIES ON 26.11.2002 AFTER ABOUT TWO YEARS OF THE SEARCH A ND THAT TOO WHEN THE ORDER OF THE LD. CIT(A) IN THE APPEAL AGAINST BLOCK ASSESSMENT ORDER HAD ALSO BEEN PASSED ON 24.1.2003 I.E WITHI N THE FINANCIAL YEAR ITSELF AND THE LD. CIT(A) ACCEPTED THE CASH TO BE FULLY EXPLAINED. WE FIND THAT DESPITE SHOWCAUSE NOTICE I SSUED BY THE AO THE ASSESSEE DID NOT FURNISH ANY EXPLANATION IN RES PECT OF SOURCE OF CASH BEFORE THE AO. SINCE NO OTHER EXPLANATION HAS BEEN ADDUCED EITHER BEFORE THE LD. CIT(A) AND EVEN BEFORE US IN RESPECT OF SOURCE OF CASH CREDITED TO THE CAPITAL ACCOUNT ON 26.11.20 02 WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD . CIT(A). THEREFORE GROUND NO. 1 IN THE APPEAL IS DISMISSED. 7. GROUND NO.3 BEING GENERAL IN NATURE DOES NOT R EQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERMS OF RESIDUARY GROUND NO. 4 IN THE APPEAL BOTH THESE GROUNDS ARE DISMISSED. ITA NO.3850/AHD/2007 5 8. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 9-04-20 10 SD/- SD/- (D T GARASIA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 9-04-2010 COPY OF THE ORDER FORWARDED TO : 1. SHRI BHAGVANJIBHAI MAVJIBHAI BAVARVA PROP. OF M /S KRISHNA SARAN GRINDING WORKS ANAND NAGAR MAHARANI SHANTID EVI ROAD B/H SHREEJI MARBLES NAVSARI 2. THE ACIT CENTRAL CIRCLE-4 SURAT 3. CIT CONCERNED 4. CIT(A)-II AHMEDABAD 5. THE DR ITAT B BENCH AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD