THE ITO, Ward-10(1), v. SHRI CHAMPAKLAL JAYKISHANDAS KHABHAR,

ITSSA 162/AHD/2003 | misc
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 16220516 RSA 2003
Bench Ahmedabad
Appeal Number ITSSA 162/AHD/2003
Duration Of Justice 6 year(s) 8 month(s) 20 day(s)
Appellant THE ITO, Ward-10(1),
Respondent SHRI CHAMPAKLAL JAYKISHANDAS KHABHAR,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 22-01-2010
Date Of Final Hearing 18-01-2010
Next Hearing Date 18-01-2010
Assessment Year misc
Appeal Filed On 02-05-2003
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM INCOME-TAX OFFICER 10(1) 1 ST FLOOR NARAYAN CHAMBER AHMEDABAD. V/S . CHAMPAKLAL JAYKISHANDAS KHAMAR 29 VRUNDAVAN BUNG 132 FT. RING ROAD SATTELITE ROAD AHMEDABAD PAN NO.31.115 PT 5707 (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SHELLEY JINDAL SR.DR RESPONDENT BY:- SHRI M.K. KAJI WITH SMT. URVASHI SHODHAN ARS O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOLL OWING GROUNDS :- (1) LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITIONS OF RS.1429898 AS DETAILED BELOW- (A) UNEXPLAINED INVESTMENT IN JUEWELLERY 1109881 (B) UNDISCLOSED SOURCE OF INCOME OF CASH FOUND FROM THE RESIDENCE 50820 (C) UNEXPLAINED INVESTMENT IN THE VALUABLES 19200 (D) INCOME OF BENAMI CONCERN M/S SHRI BAHUCHAR 78908 ALU BHANDAR (E) DISCREPANCY IN CASH BOOK 171089 1429898 IT(SS)A NO. 162/AHD/2003 BLOCK PERIOD: 1.4.98 TO 17.11.98 2 (2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ABOVE ADDITION. 2. THE FACTS OF THE CASE ARE THAT A SEARCH ACTION U NDER SECTION 132 WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 17.1 1.198. DURING THE COURSE OF SEARCH VARIOUS DOCUMENTS CASH GOLD AND S ILVER ORNAMENTS WERE FOUND AND PART OF THEM WERE SEIZED. THE RECOVERY AN D SEIZURE OF JEWELLERY MADE OF GOLD/SILVER WAS DESCRIBED BY AO A S UNDER :- FROM GOLD(RS.) SILVER(RS.) TOTAL(RS.) GOLD(RS.) SILVER(RS.) TOTAL(RS.) -------FOUND------ -----SEIZED------ RESIDENCE 1 94 297 - 1 94 297 LOCKER- 631 4 39 164 10 200 4 49 364 2 96 010 - 2 96 010 LOCKER- 858 2 09 367 29 775 2 39 142 1 71 681 28 775 2 00 936 LOCKER 1292 2 13 478 13 600 2 27 078 - - - TOTAL 10 56 306 53 575 11 09 881 4 67 691 28.755 4 96 446 TOTAL WEIGHT OF GOLD JEWELLERY FOUND WAS DETERMINED AT 2 751 850 WHOSE VALUE WAS DETERMINED AT RS.10 56 306/- AS ABOVE. 3. WHEN ASKED TO EXPLAIN DURING THE COURSE OF SEAR CH THE ASSESSEE IN RESPONSE TO QUESTION NO.25 STATED THAT GOLD BRACEL ETS WEIGHING 190 GMS WERE RECEIVED AS GIFT FROM HIS SISTER SMT. VIRBALAB EN UMAKANT KHAMAR WHO IS RESIDING AT NAIROBI. FURTHER SOME 10 GMS RIN G AND 55GMS GOLD CHAINS WERE PURCHASED 10 YEARS AGO. VARIOUS OTHER E XPLANATIONS WERE FURNISHED BY THE ASSESSEE TO THE AO DURING THE COUR SE OF ASSESSMENT PROCEEDINGS- SUCH AS SOME GOLD ORNAMENTS BELONGED T O HIS MARRIED DAUGHTER SOME TO UNMARRIED DAUGHTERS SOME ORNAMEN TS WERE CONVERTED FROM OLD ORNAMENTS IN RESPECT OF WHICH NECESSARY CO NVERSION RECEIPTS FROM THE JEWELERS WERE FOUND IN THE SEARCH THERE W ERE BILLS FROM JEWELERS 3 SHOWING SOME PURCHASES OF JEWELLERY ETC. THE ASSESS EE ALSO TOOK SHELTER OF BOARDS CIRCULAR NO.1916 DATED 11.5.1994 WHEREIN IT IS STATED THAT GOLD ORNAMENTS WEIGHING 500 GMS FOR EACH MARRIED LADY 2 50 GMS FOR EACH UNMARRIED LADY AND 100 GMS FOR MALE MEMBER OF THE F AMILY NEED NOT BE SEIZED TREATING THEM AS APPARENTLY EXPLAINED. THE A O HOWEVER DID NOT ACCEPT ANY OF THE EXPLANATIONS AND TREATED THE ENTI RE SUM OF RS.11 09 881/- AS UNEXPLAINED IN ACQUISITION OF GOL D/SILVER ORNAMENTS/ARTICLES. BEFORE CIT(A) ASSESSEE FURNISHE D FOLLOWING EXPLANATIONS IN RESPECT OF 2751.800 GMS OF GOLD ORN AMENTS:- 1. GIFT OF GOLD JEWELLERY FROM SISTER VIRBALABEN OF NAIROBI (IN AFFIDAVIT AND CERTIFICATE FILED FROM SMT. VIRB ALABEN) - 822 GMS. 2. RECEIVED ON MARRIAGE/DAHEJ BY THE ASSESSEE AND -598.550 GMS THEREFORE BEING STRIDHAN OF WIFE 3. RECEIVED FROM LOCKER NO.1292 OWNED AND OPERATED BY THE DAUGHTER OF ASSESSEE NAMELY SUNITA PREYASH BADSHAH -567.450 GMS 4. GOLD JEWELLERY RECEIVED ON CONVERSION OF WHICH VARIOUS BILLS WERE PRODUCED -598.550 GMS. 5. VARIOUS OTHER RECEIPT ON PURCHASE OF (I) -20.00 GMS (II) 145.300 GMS. --------------- ----- 2751.850 G MS THE LD. CIT(A) ACCEPTED THE EXPLANATION AND DELETED THE ADDITION. 4. LD. DR SUBMITTED THAT IT IS INCORRECT TO ACCEPT THAT ASSESSEE RECEIVED JEWELLERY FROM HIS SISTER AT NAIROBI. THE PASS PORT DID NOT CONTAIN ANY SUCH INFORMATION. THERE IS NO DECLARATI ON BY THE ASSESSEE 4 WITH THE CUSTOMS AUTHORITIES THAT ASSESSEE IS BRING ING JEWELLERY FROM NAIROBI. HE FURTHER SUBMITTED THAT (I) THE ASSESSEE ONLY DECLARED 190 GMS. OF GOLD DU RING THE COURSE OF SEARCH AS HAVING BEEN RECEIVED AS GIFT FROM HIS SIS TER AT NAIROBI. IT IS ONLY SUBSEQUENT EXPLANATION THAT RECEIPT FROM SISTER AT NAIROBI HAS BEEN INCREASED TO 822 GMS. WHICH IS SUBSTANTIAL AND ASSE SSEE CANNOT BRING IT TO INDIA WITHOUT DECLARING IT TO CUSTOMS AUTHORITIES/I MMIGRATION AUTHORITIES. NO CONTEMPORARY DOCUMENT IS FOUND IN THE SEARCH SHO WING SUCH RECEIPT THEREFORE IT CANNOT BE ACCEPTED. (II) REGARDING CONVERSION OF JEWELLERY LD. DR SUBM ITTED THAT WHETHER THE JEWELLERY CONVERTED OR NOT IN FACT IT BELONGED TO HIM AND ASSESSEE HAS TO EXPLAIN THE SOURCE THEREOF. MERELY BECAUSE THERE IS A CONVERSION IT DOES NOT EXPLAIN THE SOURCE. (III) REGARDING JEWELLERY OF THE MARRIED DAUGHTER LD. DR SUBMITTED THAT LOCKER IS OPERATED BY BOTH I.E. THE ASSESSEE AND HI S DAUGHTER. DAUGHTER HAS NOT EXPLAINED FROM WHERE SHE HAS BROUGHT THE JEWELL ERY. THE ACQUISITION OF JEWELLERY IS NOT SUPPORTED BY EXPENDITURE IN MAR RIAGE. IT IS NOT EXPLAINED WHETHER SHE HAD JEWELLERY UNDER HER CONTR OL AT IN-LAWS-HOUSE. THEREFORE IT CANNOT BE SAID THAT THE DAUGHTERS EN TIRE JEWELLERY WAS IN THE IN THE LOCKER WHICH WAS UNDER CONTROL OF THE ASSESS EE ALSO. (IV) REGARDING OTHER JEWELLERY LD. DR SUBMITTED THA T NO SATISFACTORY EXPLANATION HAS COME FORWARD. 5. ON THE OTHER HAND LD. AR SUBMITTED THAT LD. CIT( A) WAS JUSTIFIED IN TREATING THE ENTIRE JEWELLERY AS EXPLAINED. HE SUBM ITTED THAT SILVER UTENSILS ARE VERY SMALL AND EVERY HOUSEHOLD OF THIS REPUTE C AN HAVE SILVER ARTICLES 5 TO THIS EXTENT. THEREFORE THEY SHOULD BE TREATED A S EXPLAINED. REGARDING GOLD ORNAMENTS LD. AR RELIED ON THE ORDER OF LD. CI T(A) AND THE EXPLANATION FURNISHED BY HIM BEFORE THE FIRST APPEL LATE AUTHORITY. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW GOLD ORNAMENTS WE IGHING 2751.850 GMS. SHOULD BE TREATED AS EXPLAINED TO THE FOLLOWIN G EXTENT :- (I) THE ASSESSEE HAS SUBMITTED EXPLANATION DURING T HE COURSE OF SEARCH AND GIVEN A STATEMENT UNDER SECTION 132(4) THAT HE HAD RECEIVED 190 GMS GOLD JEWELLERY FROM SISTER AT NAIROBI. SUBSEQUENTLY A CERTIFICATE HAS BEEN FILED THAT SHE HAS INDEED GAVE CERTAIN JEWELLERY TO THE ASSESSEE. SINCE SPONTANEOUS ANSWER HAS COME DURING THE COURSE OF SE ARCH TO THAT EXTENT JEWELLERY SHOULD BE TREATED AS EXPLAINED. EXPLANATI ON IN RESPECT OF OTHER JEWELLERY HAVING BEEN RECEIVED BY THE ASSESSEE FROM HIS SISTER AT NAIROBI CANNOT BE ACCEPTED BECAUSE THERE IS NO SUPPORTING D ECLARATION FILED WITH THE CUSTOMS /IMMIGRATION AUTHORITIES WHILE COMING F ROM NAIROBI TO INDIA. THUS JEWELLERY TO THE EXTENT OF 190 GMS IS T REATED AS EXPLAINED COMING AS GIFT FROM HIS SISTER AT NAIROBI. (II) ASSESSEE BEING MARRIED FOR MORE THAN 34 YEARS HAVING SUBSTANTIAL REPUTE MUST HAVE RECEIVED JEWELLERY IN MARRIAGE M UST HAVE ACQUIRED SOME JEWELLERY SUBSEQUENTLY THEN RELYING ON THE CIR CULAR OF CBDT DATED 11.5.1994 WE HOLD THAT JEWELLERY TO THE EXTENT OF 5 00 GMS IS EXPLAINED IN RESPECT OF HIS WIFE. (III) REGARDING JEWELLERY FOUND IN THE LOCKER NO.12 92 OWNED BY ASSESSEES DAUGHTER THOUGH JOINTLY OPERATED WITH TH E ASSESSEE WE ARE OF THE VIEW THAT ASSESSEE HAS PRIMA FACIE DISCHARGED T HE ONUS THAT IT 6 BELONGED TO HIS DAUGHTER. IT WAS FOR THE REVENUE TO SHOW THAT IT WAS NOT JEWELLERY OF THE DAUGHTER BUT THAT OF THE ASSESSEE BY RECORDING STATEMENT OF THE DAUGHTER AND COLLECTING OTHER RELEVANT EVIDE NCES. HAVING NOT BEEN DONE SO WE TREAT THE JEWELLERY WEIGHING 567.45 GMS AS EXPLAINED. IN ANY CASE IT IS NEAR THE LIMIT PRESCRIBED BY THE CBDT VI DE ITS CIRCULAR DATED 11.5.1994. THEREFORE JEWELLERY TO THIS EXTENT IS T REATED AS EXPLAINED. (IV) THE ASSESSEE HAS TWO UNMARRIED DAUGHTERS. TO T HE EXTENT OF 250 GMS. EACH THE JEWELLERY SHOULD BE TREATED AS EXPLAI NED. (V) JEWELLERY TO THE EXTENT OF 100 GMS BELONGING TO THE MALE MEMBER SHOULD BE TREATED AS EXPLAINED AS PER ABOVE CIRCULA R. THUS TOTAL JEWELLERY 1857.45 GMS IS TREATED AS EXPLAINED AND REST OF THE JEWELLERY WEIGHING 894.400 GMS. IS TREATED AS UNEXPLAINED. THE AO IS D IRECTED TO WORK OUT THE VALUE ON THE DATE OF SEARCH AND TREAT THE INVES TMENT AS INCOME UNDER SECTION 69. THIS GROUND OF THE REVENUE IS THEREFOR E PARTLY ALLOWED. 7. THE NEXT GROUND IS REGARDING DELETION OF ADDITIO N OF RS.50820 ON ACCOUNT OF UNDISCLOSED SOURCE OF INCOME OF CASH FOU ND FROM RESIDENCE DURING SEARCH. 8. DURING THE COURSE OF SEARCH CASH OF RS.64 820/- WAS FOUND. IT WAS EXPLAINED THAT ASSESSEE HAD KEPT NEW CURRENCY NOTES WORTH RS.20 000/- FOR MARRIAGE OF HIS DAUGHTER. RS.40 000/- WAS WITHD RAWN BY WIFE SMT. DEVIKABEN FROM HER CAPITAL ACCOUNT. OUT OF THIS RS. 26 000/- WAS SPENT IN CONNECTION WITH MEDICAL TREATMENT. THUS REST OF RS. 14 000/- AS CASH WAS WITH HER. SHE HAS SAVED RS.4 TO 5 THOUSAND PER MONT H OUT OF HOUSEHOLD WITHDRAWALS OF RS.12 000/- PER MONTH. HER DAUGHTER ALSO HAD SOME MONEY. 7 9. THE AO DID NOT ACCEPT THE EXPLANATION ENTIRELY A ND ADDED RS.50 820/- BY ACCEPTING EXPLANATION ONLY TO THE EX TENT OF RS.14 000/-. LD. CIT(A) ON THE OTHER HAND ACCEPTED THE SAME EXPL ANATION AND DELETED THE ENTIRE ADDITION. 10. WE HAVE HEARD THE PARTIES. IN OUR CONSIDERED VI EW IN ADDITION TO CREDIT OF RS.14 000/- SOME FURTHER CREDIT FOR SAVI NGS SHOULD BE GIVEN. WE ESTIMATE IT TO RS.26 000/- AND THUS EXPLANATION TO THE EXTENT OF RS.40 000/- SHOULD BE ACCEPTED. THE REST OF THE SUM TO RS.24 020/- SHOULD BE TREATED AS UNEXPLAINED. THIS GROUND OF REVENUE I S PARTLY ALLOWED. 11. NEXT GROUND IS REGARDING UNEXPLAINED INVESTMENT IN VALUABLES AMOUNTING TO RS.19 200/-. AO FOUND VARIOUS ELECTRON IC GADGETS LIKE A.C. T.V. REFRIGERATOR VIDEO OVAN WATER HEATERS ETC . AS NO SATISFACTORY EXPLANATION WAS GIVEN AND HE MADE ADDITION OF RS.19 200/-. LD. CIT(A) ACCEPTED THE FOLLOWING EXPLANATION AND DELETED THE ADDITION: (A) HE GROSSLY NEGLECTED THE HIGH WITHDRAWALS OF T HE APPELLANT FOR MANY YEARS AND ADDED THE COST OF VALUABLES WITHOUT FINDING ANY EVI DENCE AND ALSO REJECTING THE SUBMISSIONS. (B) THE VIDEO WAS PURCHASED SECOND HAND FOR RS.2000 /- ONLY FROM A FRIEND DEEPAK B. PARIKH WHICH HE HAS VALUED RS.10000 WITHO UT ANY BASE. (C) AT THE TIME OF SEARCH THE FAMILY MEMBERS HAVE STATED APPROXIMATE VALUE OF VARIOUS ITEMS. BUT LATER ON IN THE SUBMISSIONS THE EXACT VALUE OF EACH ITEM AND ITS SOURCE WAS SHOWN. THE DIFFERENCE IN THE VALUE O F ITEM WAS ALSO NOT MATERIAL. HE HAS ADDED THE VALUABLE BY IRRELEVANTLY STATING THAT THE VALUES SUBMITTED WERE CHANGED AND SO NOT ACCEPTABLE. 12. WE HAVE HEARD THE PARTIES. IN OUR CONSIDERED VI EW THE EXPLANATION FURNISHED BY THE ASSESSEE AND ACCEPTED BY THE LD. C IT(A) ARE RATHER FLIMSY. THERE IS NO BASIS TO HOLD THAT VIDEO PURCHA SED WAS SECOND HAND. THERE IS NO SUPPORT FROM WITHDRAWAL FROM HOUSEHOLD. WHATEVER IS WITH- 8 DRAWN FOR HOUSEHOLD IS ALSO STATED TO BE UTILIZED I N EXPLANATION FOR RECOVERY OF CASH. CONSIDERING OVERALL FACTS WE TRE AT A SUM OF RS.10 000/- AS UNEXPLAINED INVESTMENT IN THE GADGETS. THIS GROU ND OF REVENUE IS PARTLY ALLOWED. 13. THE NEXT DISPUTE IS REGARDING INCOME FROM BENAM I CONCERN AMOUNTING TO RS.78908/-. AO FOUND THAT INCOME OF M/ S SHRI BAHUCHAR ALU BHANDAR BELONGED TO THE ASSESSEE AS IT IS HIS B ENAMI CONCERN. FOLLOWING INCOME WAS EARNED IN THREE YEARS BY THIS CONCERN :- ASST. YEAR 1997-98 RS.32 668/- ASST. YEAR 1998-99 RS.16 240/- ASST. YEAR 1999-2000 RS.30 000/- AO CARRIED OUT A SURVEY UNDER SECTION 133A AT THE P REMISES OF M/S CHAMPAKLAL JAIKISHANDAS WHERE BOOKS OF ACCOUNTS OF VARIOUS CONCERNS RUN BY THAT CONCERN WERE FOUND. STATEMENT OF THE AC COUNTANT OF ASSESSEE NAMELY SHRI NARENDRABHAI K. MEHTA WAS RECORDED. HE EXPLAINED THAT SHRI DHARMENDRA R. PATEL IS THE PROPRIETOR OF SHREE BAHU CHAR ALU BHANDAR. THERE WAS NO RESIDENTIAL ADDRESS OF THIS PERSON. HI S STATEMENT UNDER SECTION 132(4) WAS ALSO RECORDED. HE STATED THEREIN THAT THIS BUSINESS BELONGED TO THE ASSESSEE. BOOKS OF ACCOUNTS WERE MA INTAINED AT THE BUSINESS PREMISES OF SHRI CHAMPAKLAL JAIKISHANDAS. THE ACCOUNTS WERE MAINTAINED BY SHRI NARENDRABHAI K. MEHTA. SINCE ENT IRE CONTROL AND MANAGEMENT OF THIS CONCERN NAMELY SHREE BAHUCHAR AL U BHANDAR WAS WITH THE ASSESSEE IT WAS TREATED AS BENAMI OF THE A SSESSEE AND INCOME OF THREE YEARS WAS ADDED TO THE INCOME OF ASSESSEE. TH E LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT RENT AGREEMENT WAS BETWEEN SHRI DHARMENDRA R. PATEL AND APMC MARKET FROM WHOSE SHO P THIS BUSINESS 9 IS CARRIED OUT. SHRI DHARMENDRA R. PATEL HAD FILED RETURN FOR ASST. YEAR 2000-01. IT WAS SIGNED BY HIM. INCOME IS ADMITTED B Y HIM. HE HAS STATED BEFORE DDIT THAT HE IS THE OWNER OF BAHUCHAR ALOO B HANDAR DOING COMMISSION BUSINESS. 14. AGAINST THIS LD. DR SUBMITTED THAT LD. CIT(A) W AS NOT JUSTIFIED IN DELETING THIS ADDITION. BECAUSE A STATEMENT WAS REC ORDED DURING THE SEARCH WHEREIN HE HAS CLEARLY ADMITTED THAT BAHUCHA R ALOO BHANDAR BELONGED TO THE ASSESSEE. THIS PERSON WAS CROSS-EXA MINED AND IN THAT ALSO HE HAD REITERATED THE STAND THAT HE IS BENAMIDAR FO R THE ASSESSEE. 15. ON THE OTHER HAND LD. AR SUPPORTED THE ORDER O F LD. CIT(A). 16. WE HAVE HEARD THE PARTIES. WE DECLINE TO INTERF ERE WITH THE ORDER OF LD. CIT(A). REASONS ARE THAT ADMISSION BY THE BENAM IDAR IS ONLY ONE ASPECT OF HOLDING A CONCERN AS BENAMI. THERE ARE TH REE MORE ASPECTS WHICH ARE REQUIRED TO BE ESTABLISHED. THEY ARE (I ) WHO HAS MADE THE INVESTMENT (II) WHO IS IN CONTROL OF BOOKS OF ACCO UNTS AND DOCUMENTS OF BENAMI CONCERN OR PROPERTY AND (III) WHO IS ENJOYIN G THE INCOME FROM THE INVESTMENT OR PROPERTY. NO DOUBT STATEMENT OF THE B ENAMIDAR IS RELEVANT BUT CANNOT BE A SOLE CRITERIA FOR COMING TO THE CON CLUSION THAT ASSESSEE IS THE REAL OWNER. IT IS NECESSARY TO ESTABLISH ALL OT HER INGREDIENTS ALSO. AS IT HAS NOT BEEN DONE WE UPHOLD THE ORDER OF LD. CIT(A) . THIS GROUND OF REVENUE IS REJECTED. 17. THE LAST GROUND IS REGARDING DISCREPANCY IN CAS H IN THE BOOKS. AO FOUND THAT CASH RECORDED IN THE BOOKS WAS MORE THAN ACTUAL CASH FOUND. THE DIFFERENCE AMOUNTED TO RS.1 71 08 9/-. THE ASSE SSEE HAD CLAIMED THAT HE HAS MADE THE PAYMENT TO ONE VINODCHANDRA HIRALAL NAND DEHGAM 10 SHRI R.B. SHAH AND M/S HARSHA AMOUNTING TO RS.1 62 607/- 4 393/- AND RS.3 027/- RESPECTIVELY. AO DID NOT ACCEPT THE RECO NCILIATION SUBMITTED BY THE ASSESSEE AND MADE THE ADDITION. LD. CIT(A) D ELETED THE ADDITION ON THE GROUND THAT NO SURPLUS CASH WAS FOUND BUT IT WA S A CASE OF DEFICIENCY IN CASH. NO EXPENDITURE IS INCURRED AND CLAIMED IN THE P & L A/C. WITHOUT INCURRING EXPENDITURE AND DEBITING THEM IN PROFIT A ND LOSS ACCOUNT IT CANNOT BE DISALLOWED. 18. WE HAVE HEARD THE PARTIES. WE DECLINE TO INTERF ERE IN THE ORDER OF LD. CIT(A) BECAUSE ADDITION IS NOT BASED ON SOUND R EASONING. THE CASH DEFICIENCY IF ANY CANNOT BE TREATED AS UNDISCLOSED INCOME. INCOME ELEMENT IS ALREADY COVERED FROM THE CASH RECORDED I N THE BOOKS OF ACCOUNT. FURTHER DEFICIENCY OF CASH CANNOT BE TREAT ED AS EXPENDITURE AND FURTHER TREATED AS DEBITED AS PROFIT AND LOSS AND THEREFORE DISALLOWED. ANY EXPENDITURE INCURRED FOR THE BUSINESS PURPOSE O F THE ASSESSEE CAN BE DISALLOWED ONLY WHEN FOUND RECORDED IN THE BOOKS OR SO CLAIMED. FURTHER THE CLAIM OF THE ASSESSEE THAT MONEY WAS PAID TO SO ME CONCERN AS ABOVE WAS NOT VERIFIED. IN ANY CASE THERE IS NO GROUND FO R MAKING ADDITION. WE THEREFORE REJECT THIS GROUND OF REVENUE. 19. AS A RESULT APPEAL FILED BY THE REVENUE IS PAR TLY ALLOWED. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 22/1/2010 MAHATA/- ORDER PRONOUNCED IN OPEN COURT ON 22/1/2010 11 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