The ACIT, Central Circle-2(1),, Ahmedabad v. Shri Damodardas Madhavlal Soni, Ahmedabad

ITSSA 107/AHD/2007 | misc
Pronouncement Date: 24-12-2010 | Result: Dismissed

Appeal Details

RSA Number 10720516 RSA 2007
Assessee PAN ACZPS4284R
Bench Ahmedabad
Appeal Number ITSSA 107/AHD/2007
Duration Of Justice 3 year(s) 6 month(s) 9 day(s)
Appellant The ACIT, Central Circle-2(1),, Ahmedabad
Respondent Shri Damodardas Madhavlal Soni, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 24-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 24-12-2010
Date Of Final Hearing 24-11-2010
Next Hearing Date 24-11-2010
Assessment Year misc
Appeal Filed On 14-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH JUDICIAL MEMBER IT(SS)A NO.107/AHD/2007 [BLOCK PERIOD 1/4/1995 TO 8/1/2002] ACIT CENTRAL CIRCLE-2(1) -VS- SHRI DAMODARDAS MADH AVLAL SONI AHMEDABAD ROOM NO.306 3 SHIVALI APARTMENT NR. N CC 3 RD FLOOR AAYAKAR BHAVAN GROUND NR. LAW GARDEN E. B. ASHRAM ROAD AHMEDABAD AHMEDABAD PAN NO.ACZPS4284R (APPELLANT) (RESPONDENT) REVENUE BY : SHRI H.P.MEENA SR-DR ASSESSEE BY: SHRI S.N.SOPARKAR SR-AR & SMT. URVASHI SHODHAN AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-III/75/CC-2(1)/06-07 DATE 19-03 -2007. THE BLOCK ASSESSMENT WAS FRAMED BY ACIT CENTRAL CIRCLE-2(1) AHMEDABAD U/S. 158BD R.W.S. 158BC OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE HIS ORDER DATE 30- 03-2006 FOR BLOCK PERIOD 01-04-1995 TO 08-01-20002. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION ON UNACCOUNTED LOAN GIVEN TO ONE SHRI BHUPENDRABHAI AMOUNTING TO RS 9 LAKH. FOR THIS REVENUE HAS RAISE D THE FOLLOWING GROUND NO.1 :- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.9.00 LAKHS MADE ON ACCOUNT OF UNACCOUNTED LOAN GIVEN TO SHRI BHUPENDRABHAI. IT(SS)A NO.107/AHD/2007 B.P.1/4/95 TO 8/1/02 ACIT CC-2(1) ABD V. SH DAMODARDAS M SONI PAGE 2 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT ON ONE SHRI BHUPENDRABHAI ON 08-01- 2002. DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS WERE SEIZED WHICH INDICAT ED THAT CASH LOAN HAS BEEN GIVEN BY ASSESSEE TO SHRI BHUPENDRABHAI AMOUNTING T O RS.19 LAKH I.E. RS.5 LAKH EACH ON 11-04-2000 AND17-06-2000 AND RS.9 LAKH ON 2 5-09-2001 30-09-2001 AND 10-10-2001. THIS FACT IS COMING OUT FROM PAGE 7 OF ANANEXURE-A/8 SEIZED DURING THE COURSE OF SEARCH. ACCORDINGLY A NOTICE U/S 158BD W AS ISSUED AND SERVED UPON ASSESSEE ON 30-01-2004. ACCORDINGLY ASSESSEE FILED BLOCK RETURN DECLARING NIL UNDISCLOSED INCOME ON 10-05-2004. SIMULTANEOUSLY A SSESSEE ALSO FILED INCOME-TAX RETURN FOR ASSESSMENT YEAR 2001-02 ON 30-07-2001 W HICH WAS SUBSEQUENTLY REVISED ON 04-05-2002 BECAUSE BUSINESS INCOME OF RS.1 58 2 50/- RESULTING FROM THE JOINT VENTURE WITH SHRI BHUPENDRABHAI WAS NOT DECLARED IN THE SAID ORIGINAL RETURN BY MISTAKE. DURING THE COURSE OF BLOCK ASSESSMENT PROC EEDINGS AO REQUIRED EXPLANATION OF THE ASSESSEE REGARDING ADVANCE BY TH E ASSESSEE OF RS.19 LAKH TO SHRI BHUPENDRABHAI. THE ASSESSEE STATED THAT THE AM OUNT OF RS.9 LAKH WAS OUT OF REPAYMENT OF EARLIER TWO LOANS TOTALING AT RS.10 LA KH WHICH THE AO HAS NOT FOUND SUBSTANTIATE BY ANY VERIFIABLE DOCUMENTS. THE AO FI NALLY CONCLUDED IN PARA-10.5 TO 10.7 OF HIS BLOCK ASSESSMENT:- 10.5 AS IS EVIDENT FROM THE PERUSAL OF ANNEXURES AS NOTED ABOVE SHRI BHUPENDRABHAIA DHAKAN IS IN A HABIT OF RECORDING TH E RECEIPT AS WELL AS THE REPAYMENT OF THE LOANS TAKEN BY HIM. AS PER PAGE NO .7 OF LOOSE PAPER FILE A- 8 SHRI BHUPENDRBHAI DHAKAN HAS NOTED DOWN THAT HE HAS RECEIVED LOAN OF RS.9 LAKHHS ON FOLLOWING DATES FROM DMS. AMOUNT FROM WHOM RECEIVED DATE 2 00 000 DMS(DAMODARDAS M SONI) 25/09 6 00 000 DAMODARDAS M SONI 30/09 1 00 000 DAMODARDAS M SONI 10/10 FURTHER HE HAS ALSO NOTED DOWN THE FACT OF HIS HAV ING MADE THE REPAYMENT OF THE LOAN AS ON THE FOLLOWING DATES DATE PAID TO AMOUNT 11/10 DAMODARDAS M SONI 4 00 000 25/10 DAMODARDAS M SONI 1 00 000 25/10 DAMODARDAS M SONI 1 00 000 25/10 DAMODARDAS M SONI 1 70 000 29/10 DAMODARDAS M SONI 30 000 10.6 THUS IT IS CLEAR THAT SHRI BHUPENDRABHAI DHAK AN ALSO RECORDS THE REPAYMENTS OF THE LOANS. HAD SHRI BHUPENDRABHAI DHA KAN MADE THE IT(SS)A NO.107/AHD/2007 B.P.1/4/95 TO 8/1/02 ACIT CC-2(1) ABD V. SH DAMODARDAS M SONI PAGE 3 REPAYMENT OF THE LOAN OF RS.10 00 000/- HE WOULD HA VE RECORDED THE TRANSACTION OF THE REPAYMENT ALSO. AS A PERSONS WHO RECEIVES CASH LOANS AND ALSO MAKES ADVANCES OF LOANS REGULARLY HE IS IN A HABIT OF RECORDING SUCH TRANSACTION AND HAD THE REPAYMENT OF RS.10 00 000/- WOULD HAVE BEEN MADE THE SAME WOULD ALSO HAVE BEEN RECORDED HAD THE REPA YMENT BEEN ACTUALLY MADE. 10.7 HENCE THE CLAIM OF THE ASSESSEE THAT THE LOAN OF RS.10 00 000/- WAS REPAID TO HIM AND FROM THAT KITTY HE HAD FURTHER EX TENDED LOAN OF RS.9 00 000/- TO SHRI BHUPENDRABHAI DHAKAN HAS NOT BEEN SUBSTANTI ATED BY ANY CIRCUMSTANTIAL OR DOCUMENTARY EVIDENCE. THE ABOVE F ACTS CLEARLY SHOW THAT THE SUM OF RS.9 00 000 IS CLEARLY UNACCOUNTED. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT( A). THE CIT(A) DELETED THE ADDITION BY GIVING FOLLOWING FINDING IN PARA-7 OF HIS APPELLATE ORDER:- 7. THE CONTENTIONS WERE CAREFULLY CONSIDERED. FROM PERUSAL OF THE DETAILS/ENTRIES APPEARING IN THE COPIES OF THE SEIZ ED DOCUMENTS IT CANNOT BE SAID THAT SHRI BHUPENDRABHAI HABITUALLY RECORDED BO TH THE REPAYMENT OF THE LOAN AND THE INTEREST. THE ENTRIES INDICATE THAT HE WAS MORE INVOLVED IN RECORDING THE INTEREST RECEIVED. AS IT IS THE SEIZ ED ANNEXURE PAGE NO.6 OF ANNEXURE A-8 REVEALS THAT AS ON 29/10/2001 ONLY RS.1 LAKH REMAI NED (TO BE PAID) TO THE APPELLANT. THIS IN ITSELF WOULD INDICA TE THE REPAYMENT OF RS.9 LAKHS WHICH IN TURN WOULD HAVE CONSTITUTED THE FU RTHER ADVANCE LATER AS OBSERVED. IT IS ALSO PERTINENT TO NOTE THAT THE APP ELLANT HAD NO OTHER SOURCE OF INCOME AND NONE WAS UNEARTHED WHICH COULD HAVE MADE THE AMOUNT OF RS.9 LAKHS AVAILABLE/EARNED BY HIM IN THE INTERIM PERIOD FOR MAKING FURTHER ADVANCE. THE SOURCE OF THE ADVANCE OF RS10 LAKHS IT SELF HAS BEEN CONSIDERED EXPLAINED. IN THESE FACTS AND CIRCUMSTANCES THE A. O WAS NOT JUSTIFIED IN ASSUMING THAT THE FURTHER ADVANCE OF RS.9 LAKHS WAS NOT OUT OF THE RECEIPT/REPAYMENT OF RS.10 LAKHS ADVANCED INITIALLY . IT IS FURTHER SEEN THAT THE APPELLANT HAD FILED RETURN FOR A.Y 2001-02 ON 30/7/ 2001 I.E. U/S.139(1) AND HAD REVISED IT ON 14/5/2002 INCORPORATING THE INTER EST INCOME EVEN BEFORE THE SERVICE OF NOTICE U/S.158D ON 31/3/2004. SINCE THE RETURN WAS REVISED WITHIN ONE YEAR FROM FILING THE RETURN BEFORE DUE DATE OF ITS FILING AND MUCH BEFORE THE SERVICE OF THE NOTICE U/S.158BD ITS CONSIDERAT ION UNDER CHAPTER XIV B ITSELF WAS NOT JUSTIFIED. THE A.O WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.1 35 000/- SIMPLY BECAUSE IT WAS NOT SHOWN IN TH E RETURN FOR A.Y 2001-02 INITIALLY FILED ON 30/7/2001. THUS THE ADDITION OF RS.9 LAKHS AND RS.1 35 000/- IN THESE FACTS AND CIRCUMSTANCES CANNOT BE SUSTAINE D AND ARE THEREFORE DELETED. THE RELATED GROUNDS OF APPEAL ARE ALLOWED. AGGRIEVED REVENUE CAME IN APPEAL BEFORE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS O F THE CASE THAT A SUM OF RS.5 LAKH IT(SS)A NO.107/AHD/2007 B.P.1/4/95 TO 8/1/02 ACIT CC-2(1) ABD V. SH DAMODARDAS M SONI PAGE 4 OF ADVANCE ON 11-04-2000 AND FURTHER ADVANCE OF RS. 5 LAKH ON 17-06-2000 HAS BEEN REPAID AND THE AMOUNT OF RS.10 LAKH AS NOTED FROM T HE METHOD OF RECORDING OF INTEREST IN NOTES MAINTAINED BY SHRI BHUPENDRABHAI IN HIS DIARY AND OTHER RELEVANT RECORDS WHICH WERE FOUND DURING THE COURSE OF SEAR CH. FROM THE DIARY IT IS NOTED THAT SHRI BHUPENDRABHAI HAS ADOPTED A METHOD OF CAL CULATING AND RECORDING THE AMOUNT OF INTEREST TILL THE PAYMENT OF PRINCIPAL AN D THIS INTEREST HAS BEEN COMPUTED TILL 03-02-2001 AND 05-02-2001 ON THE ABOVE RS.10 L AKH ADVANCED BY ASSESSEE TO SHRI BHUPENDRABHAI. SHRI BHUPENDRABHAI HAS RECORDED THE RATE OF INTEREST TILL THE PAYMENT OF PRINCIPAL I.E. ON 03-02-2001 AND 05-02-2 001 ON THE ABOVE ADVANCE OF RS.10 LAKH I.E. RS.5 LAKH EACH. WE FIND THAT ASSESS ING OFFICER HAS ACCEPTED THE INTEREST IN THE CASE OF SHRI BHUPENDRABHAI BUT HAS NOT BELIEVED THE EXPLANATION OF THE ASSESSEE AS PER SEIZED DOCUMENT PAGE 6 OF ANNEX URE-7 WHICH CLEARLY REVEALS THE DATE OF PAYMENT OF INTEREST ON THE ABOVE ADVANC E OF RS.5 LAKH EACH. WE ARE OF THE VIEW THAT THIS ADVANCE OF RS.9 LAKH IS OUT OF A BOVE ADVANCE OF RS.10 LAKH AND THIS CANNOT BE ADDED AS UNEXPLAINED INCOME. ACCORDI NG WE ARE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELETED AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 6. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.1.35 LAKH ADDED BY ASSE SSING OFFICER ON ACCOUNT OF UNACCOUNTED INTEREST. FOR THIS REVENUE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.1 35 000/- FOR UNACCOUNTED INTEREST WITHOUT APPR ECIATING THAT DISCLOSURE OF THE INCOME IN THE REVISED RETURN OF INCOME FILED AF TER THE DATE OF SEARCH CANNOT EXCLUDE SUCH INCOME FROM CONSIDERATION UNDER CHAPTE R XIVB AS PER THE PROVISION OF SECTION 158BB OF THE INCOME-TAX ACT. 6. WE FIND THAT CIT(A) HAS DELETED THE ADDITION BY STATING THAT ASSESSEE HAS FILED RETURN FOR ASSESSMENT YEAR 2001-02 ON 30-07-2001 I. E. U/S.139(1) OF THE ACT AND HAD REVISED IT ON 14-05-2002 INCORPORATING THE INTEREST INCOME EVEN BEFORE THE SERVICE OF NOTICE U/S.158BD OF THE ACT ON 31-03-2004. SINCE THE RETURN WAS REVISED WITHIN ONE YEAR FROM FILING THE RETURN BEFORE DUE DATE OF ITS FILING AND MUCH BEFORE THE SERVICE OF THE NOTICE U/S 158BD ITS CONSIDERATION UNDER CHAPTER XIVB ITSELF WAS NOT JUSTIFIED. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.1.35 IT(SS)A NO.107/AHD/2007 B.P.1/4/95 TO 8/1/02 ACIT CC-2(1) ABD V. SH DAMODARDAS M SONI PAGE 5 LAKH SIMPLY BECAUSE IT WAS NOT SHOWN IN THE RETURN FOR ASSESSMENT YEAR 2001-02 INITIALLY FILED ON 30-07-2001 AND ADDITION OF RS.1. 35 LAKH IN THESE FACTS AND CIRCUMSTANCES CANNOT BE SUSTAINED AND ARE THEREFORE DELETED. THE CIT(A) ALLOWED THE RELATED GROUND OF APPEAL. WE FURTHER FIND FROM THE ABOVE THAT RETURN FOR ASSESSMENT YEAR 2001-02 WAS FILED ON 30-07-2001 WH ICH WAS SUBSEQUENTLY REVISED WITHIN TIME-LIMIT PRESCRIBED U/S 139(5) AND THAT IS A VALID RETURN. THE ASSESSEE HAS REVISED ITS RETURN ON 14-05-2002 BEFORE ISSUANCE OF NOTICE U/S.158BD OF THE ACT ON 31-03-2001. ACCORDINGLY THE INCOME FROM INTEREST I S ALREADY DISCLOSED IN THE RETURN CANNOT BE THE SUBJECT-MATTER IN BLOCK ASSESSMENT. A CCORDINGLY THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 24 TH DEC 2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 24/12/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- III AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD