The ACIT, Central Circle-1(4),, Ahmedabad v. Dr. Hemchandra V.Patel,, Patan(NG).

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) IT(SS)A NO.160/AHD/2004 [BLOCK PERIOD : 1991-92 TO 2000-01 & 1-4-2000 TO 26-9-2009] DR.HEMCHANDRA V. PATEL 20-B RALIYAT NAGAR PATAN (N.G.) VS. DCIT CC-1(2) AHMEDABAD. IT(SS)A NO.172/AHD/2004 [BLOCK PERIOD : 1991-92 TO 2000-01 & 1-4-2000 TO 26-9-2009] DCIT CC-1(2) AHMEDABAD. VS. DR.HEMCHANDRA V. PATEL 20-B RALIYAT NAGAR PATAN (N.G.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. THAKKER REVENUE BY : SHRI SHELLY JINDAL O R D E R PER MUKUL KR. SHRAWAT JM: REVENUE AS WELL AS THE ASSESSEE/ APPELLANT BOTH ARE IN APPEAL AGAINST THE ORDER OF THE CIT(A)-I AHMEDABAD DATED 15-3-2004. BOTH THESE CROSS APPEALS ARE CONS OLIDATED AND HEREBY DECIDED BY THIS COMMON ORDER. A. IT(SS)NO.160/AHD/2004 (ASSESSEES APPEAL) 2. THE ASSESSEE HAS RAISED TWO GROUNDS BOTH ARE INT ER-CONNECTED AND ARE REPRODUCED BELOW: THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CO MPUTING UNDISCLOSED INCOME AT RS.19 54 220/- AS AGAINST RS. 125 94 310/- DECLARED BY THE APPELLANT AND IN COMPUTING UNDISCLO SED INVESTMENT AT RS.21 40 212/- THEREBY COMPUTING THE UNDISCLOSED IN COME AT RS.21 40 210/- ADOPTING HIGHER FIGURE OF UNDISCLOSE D INVESTMENT AS COMPARED TO THE FIGURE OF UNDISCLOSED INCOME OF RS. 19 54 220/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD.CIT(A) OUGHT TO HAVE ACCEPTED THE UNDISCLOSED IN COME AS PER THE RETURN FILED BY THE APPELLANT FOR THE BLOCK PERIOD AT RS.15 94 310/-. IT IS IT(SS)A NO.160 AND 172/AHD/2004 -2- THEREFORE PRAYED THAT THE ORDERS OF THE LOWER AUTHO RITIES MAY BE SET ASIDE TO THE ABOVE EXTENT AND THE UNDISCLOSED INCOM E MAY BE ACCEPTED AT RS.15 94 310/-. 3. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING ASSESSMENT ORDER PASSED UNDER SECTION 158BC(C) OF THE INCOME TAX ACT 1961 (THE ACT FOR SHORT) DATED 30-9-2002 WERE THAT A SEARCH UNDER SEC TION 132 WAS CARRIED OUT ON 26-9-2000 AT THE PREMISES OF THE ASSESSEE. THE ASS ESSEE IS A SURGEON AND RUNNING A HOSPITAL VIZ. GAYATRI SURGICAL AT PATAN . DURING THE COURSE OF SEARCH AT THE HOSPITAL AND AT THE RESIDENTIAL PREMISES OF THE ASSESSEE CERTAIN ASSETS SUCH AS CASH JEWELLERY ETC. HAVE BEEN FOUND AND SEIZED. IT HAS ALSO BEEN NOTED THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNTS HOW EVER THOSE WERE NOT FOUND COMPLETED AT THE TIME OF SEARCH. CERTAIN DISCREPAN CIES WERE NOTED BY THE REVENUE DEPARTMENT AND BECAUSE OF THE SAID REASON THE ASSESSEE HAS DISCLOSED A SUM OF RS.15 51 000/- AS UNDISCLOSED INCOME. A R ETURN FOR THE BLOCK PERIOD WAS FILED DECLARING TOTAL UNDISCLOSED INCOME OF RS. 15 94 310/-. IN RESPECT OF THIS GROUND OF THE ASSESSEE THE MAIN CONFLICT REVO LVES AROUND A STATEMENT OF THE ASSESSEE UNDISPUTEDLY RECORDED DURING THE COUR SE OF SEARCH OPERATIONS. THE ASSESSEE HAS ADMITTED THAT THERE WERE SOME UNDE RSTATEMENTS OF PROFESSIONAL RECEIPTS. HE HAS ACCEPTED THAT SOMETI ME IN EMERGENCIES OR DURING THE NIGHT WHEN THE STAFF WAS NOT AVAILABLE SOME O F THE RECEIPTS COULD NOT BE ACCOUNTED FOR. THE TOTAL OF SUCH UNACCOUNTED RECEI PTS WERE STATED TO BE IN THE RANGE OF 10% TO 15% OF THE YEARLY RECEIPTS DISCLOSE D. HE HAS THEREFORE OFFERED THAT SUCH UNACCOUNTED INCOME COULD BE APPROXIMATELY RS.15 00 000/- FOR THE ENTIRE BLOCK PERIOD. HE HAS ALSO MENTIONED THAT TH E INCOME SO EARNED STOOD INVESTED IN CERTAIN ASSETS SUCH AS CASH SHARES O RNAMENTS OR CERTAIN EXPENSES ETC. IT WAS MADE CLEAR IN THE SAID STATEMENT THAT THE INCOME OF RS.15 00 000/- WOULD THEREFORE COVER DISCREPANCIES THAT WERE NOTIC ED IN THE BOOKS OF ACCOUNTS AND THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH . DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE AO THAT FOR THE BLOCK PERIOD STARTING FROM FINANCIAL YEAR 1991 UPTO TO THE DATE OF SEARCH I.E. 26-9-2000 THE IT(SS)A NO.160 AND 172/AHD/2004 -3- TOTAL GROSS RECEIPTS YEAR-WISE WERE AS UNDER AND O N THAT GROSS RECEIPT HE HAS CALCULATED 15% UNDISCLOSED PORTION AS UNDER: FINANCIAL YEAR GROSS RECEIPTS (RS.) UNDISCLOSED PORTION (15/85 OF GROSS RECEIPTS) (RS.) 1990-91 4 69 220 82 803 1991-92 5 10 263 90 047 1992-93 5 70 610 1 00 695 1993-94 7 08 950 1 25 109 1994-95 7 58 478 1 33 849 1995-96 8 71 160 1 53 734 1996-97 11 15 725 1 96 893 1997-98 11 43 945 2 01 872 1998-99 11 76 795 2 07 770 1999-00 12 22 815 2 15 791 1.4.00TO 26.9.00 6 96 749 6 96 749 TOTAL 22 05 312 ON THE BASIS OF THE ABOVE CALCULATION THE AO HAS H ELD THAT THE ASSESSEE HAS SUPPRESSED UNDISCLOSED PROFESSIONAL INCOME OF RS.22 05 312/- AND TAXED ACCORDINGLY. 4. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY. BEFORE THE FIRST APPELLATE AUTHORITY IT WAS DEMONSTRATED THAT SOME OF THE RECEIPTS WERE HIGHER THAN THE 15% AS MENTIONED BY THE ASSESSEE. THE LEARNED CIT(A) HAS NOTICED THAT IN SOME OF THE YEARS PROFESSIONAL REC EIPTS SHOWN WAS HIGHER THAN THE SAID OFFER. RELEVANT OBSERVATIONS OF THE LEARN ED CIT(A) READS AS UNDER: ... THE ABOVE SHOWS THAT DECLARATION MADE BY THE A PPELLANT IS NOT CORRECT AND THE SAME HAS CORRECTLY BEEN TAKEN BY TH E AO AT 15%. HOWEVER IN THE YEARS WHERE THE APPELLANT HAS HIMSELF OFFERED A HIGHER INCOME THAN THAT ESTIMATED BY THE AO INCOME SHOWN BY THE APPELLANT HAS TO BE TAKEN AS THE INCOME. SO FAR AS RECEIPTS OF THE CURRENT YEAR ARE CONCERNED IT IS TRUE THAT BOOKS O F ACCOUNTS FROM 12.4.2000 WERE NOT WRITTEN HENCE INCOME FROM 1.4.2 000 TILL THE DATE OF SEARCH HAS TO BE TAKEN TO BE UNDISCLOSED INCOME. I T IS HOWEVER NOT PROPER TO TAKE ENTIRE RECEIPTS AS INCOME BUT ONLY INCOME PART OF THE RECEIPTS CAN BE CONSIDERED TO BE UNDISCLOSED INCOME . FROM THE RETURN OF A.Y.2001-02 IT IS SEEN THAT NET INCOME FROM PRO FESSIONAL RECEIPTS HAS IT(SS)A NO.160 AND 172/AHD/2004 -4- BEEN SHOWN TO BE AT THE RATE OF 22% AS AGAINST THAT APPELLANT HAS HIMSELF OFFERED A SUM OF RS.2 51 000/- AS UNDISCLOS ED INCOME FOR THE BROKEN PERIOD. AS THIS AMOUNT IS OFFERED AT A HIGH ER RATE THE SAME IS BEING TAKEN TO BE THE NET UNDISCLOSED INCOME FOR TH E BROKEN PERIOD. TO SUM UP INCOME ON ACCOUNT OF UNDISCLOSED PROFESSION AL RECEIPTS WOULD BE AS UNDER: AFTER NARRATING ITS REASONS THE LEARNED CIT(A) HAS ALSO MADE A CHART AND ON THAT BASIS HE HAS COMPUTED THAT INSTEAD OF PROFESSI ONAL INCOME AT RS.22 05 312/- THE CORRECT FIGURE WAS RS.19 10 909 /-. FOR READY REFERENCE THE SAME IS REPRODUCED BELOW: ASSTT.YEAR INCOME REMARKS 1991-92 1 00 000 AS SHOWN BY THE ASSESSEE 1991-92 1 00 000 -DO- 1992-93 1 00 000 -DO- 1993-94 1 00 000 -DO- 1994-95 1 25 000 -DO- 1995-96 1 33 849 AS WORKED OUT BY THE AO @ 15% 1996-97 1 53 734 -DO- 1997-98 1 96 893 -DO- 1998-99 2 01 872 -DO- 1999-00 2 07 770 -DO- 01-01 2 15 791 -DO- 1.4.2000TO 26.9.2000 2 51 000 AS OFFERED BY THE ASSESSEE 19 10 909 SINCE THE LEARNED CIT(A) HAS GRANTED PART RELIEF T HEREFORE THE REVENUE AS ALSO THE ASSESSEE BOTH ARE IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE SIDES AND ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SHRI K.C. THAKKER HAS ARGUED THAT IF COMPARE THE TOTAL GROSS RECEIPTS OF THE BLOCK PERIOD AMOUNTING TO RS.92 44 710/- WITH THE PERCEN TAGE OF DISCLOSURE AS MADE IN THE STATEMENT THEN THE ADDITIONAL INCOME DECLAR ED BY THE ASSESSEE OF RS.15 51 000/- WOULD BE AROUND 14.37% AS AGAINST TH E PERCENTAGE OF DISCLOSURE IT(SS)A NO.160 AND 172/AHD/2004 -5- ASSESSED IN THE HANDS OF THE ASSESSEE. THE LEARNED AR HAS FURNISHED A CALCULATION WHICH IS REPRODUCED BELOW: ACCOUNTED FOR GROSS RECEIPTS OF THE BLOCK PERIOD U PTO THE DATE OF SEARCH WORKS OUT TO RS.92 44 710/-. ADDITIONAL UNACCOUNTED RECEIPTS OFFERED FOR BEING T AXED RS.15 51 000/-. PERCENTAGE OF ADDITIONAL RECEIPTS OVER ACCOUNTED FO R RECEIPTS: 15 51 000 X 100 = 16.78% 92 44 710 DECLARED ADDITIONAL INCOME OF RS.15 51 000/- WORKS OUT TO 14.37% ON THE DECLARED RECEIPTS AND ADDITIONAL RECEIPTS (RS.9 2 44 710/- + RS.15 51 000/-) = RS.1 07 95 710/-. A. THIS IS AGAINST 10 TO 15% MENTIONED IN THE DECLA RATION MADE BY THE APPELLANT. THE DIFFERENCE IS NEGLIGIBLE AND TH ERE IS NO REASON TO TAKE 10 TO 15% TO BE PRECISELY 15%. ON THE BASIS OF THE ABOVE CALCULATION THE LEARNED AR HAS TRIED TO EXPLAINED THAT EVEN THE PERCENTAGE OF THE ADDITIONAL RECEIPTS AT 1 6.78% WAS HIGHER THAN THE PERCENTAGE AS DISCLOSED IN THE STATEMENT RECORDED. HE HAS ALSO EMPHASIZED THAT THE ASSESSEE HAS NOT SAID THAT THE UNDISCLOSED PERC ENTAGE OF RECEIPT WAS TO THE EXTENT OF 15% BUT HE HAS GIVEN A ROUGH RANGE OF PE RCENTAGE FROM 10% TO 15%. THE LEARNED AR HAS THEREFORE QUIPPED THAT THERE WAS NO SOUND REASON FOR THE A.O. TO STICK TO 15% THEORY AND ALSO ARGUED THAT TH ERE WAS NO REASON TO INCREASE THE PERCENTAGE OF RECEIPT HENCE THE DECL ARED AMOUNT SHOULD NOT BE DISTURBED. 6. THE LEARNED DR SHRI SHELLY JINDAL SR.CIT-DR O N THE OTHER HAND HAS MENTIONED THAT THE ASSESSMENT WAS NOT MERELY BASED UPON THE UNDISCLOSED INCOME BUT SIMULTANEOUSLY THE REVENUE DEPARTMENT H AS ALSO UNEARTHED UNEXPLAINED ASSETS WHICH WERE ALSO TO THE TUNE OF RS.29 05 344/- AS CALCULATED BY THE AO. ONCE THE REVENUE DEPARTMENT HAS ACCEPTE D THE ASSESSEES CLAIM THAT THE UNEXPLAINED INCOME WAS INVESTED TOWARDS UN EXPLAINED ASSETS AND THE IT(SS)A NO.160 AND 172/AHD/2004 -6- NECESSARY SET OFF HAS ALREADY BEEN GIVEN THEN THE RIGHT COURSE IS TO MATCH THE UNDISCLOSED INCOME WITH THE UNDISCLOSED ASSETS. THE AO HAS FOUND THAT THE UNDISCLOSED INVESTMENT WAS WITHIN THE AMOUNT OF UND ISCLOSED INCOME AS ASSESSED BY HIM THEREFORE THE UNDISCLOSED INCOME MUST NOT BE DISTURBED. 7. ON HEARING THE RIVAL SUBMISSIONS AS WELL AS ON CAREFUL PERUSAL OF THE STATEMENT MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH PROCEEDINGS AND OTHER RELATED DOCUMENTS FOUND DURING THE COURSE OF SEARCH WE FIND NO FORCE IN THE ARGUMENT OF THE LEARNED AR. THIS IS NOT A CASE OF REGULAR ASSESSMENT BUT A CASE OF BLOCK ASSESSMENT AS PRESCRIBED UNDER CHAPTE R-XIV-B OF THE ACT. THIS CHAPTER HAS PRESCRIBED A SPECIAL PROCEDURE TO CALCU LATE THE UNDISCLOSED INCOME AS DEFINED UNDER SECTION 158BB OF THE ACT. UNDISPU TEDLY THE UNDISCLOSED PROFESSION RECEIPTS WERE FOUND AND THAT FACT WAS AC CEPTED BY THE ASSESSEE. FURTHER CERTAIN UNDISCLOSED ASSETS HAVE ALSO BEEN DETECTED BY THE REVENUE DEPARTMENT. THE AO HAS PROCEEDED TO COMPUTE THE UN DISCLOSED ICOME/RECEIPTS BY COMPARING THE GROSS RECEIPTS DISCLOSED IN THE BO OKS OF ACCOUNTS. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY SOME OF THE UNDISCLOSED GROSS PROFESSIONAL RECEIPTS WERE FOUND TO BE EXCESS IVE THAN THE PERCENTAGE AS STATED IN THE STATEMENT RECORDED. THAT BENEFIT HAS ALREADY BEEN GRANTED BY THE LEARNED CIT(A) AS WE HAVE SEEN FROM THE CHART REPRO DUCED HEREINABOVE LIFTED FROM THE IMPUGNED ORDER OF THE LEARNED CIT(A). THE ARGUMENTS OF THE LEARNED AR HAS ALSO TO BE REJECTED ON THE GROUND THAT THE P ROFESSIONAL INCOME AS FINALLY DETERMINED BY THE LEARNED CIT(A) AT RS.19 10 909/- WAS HELD AS UNDISCLOSED PROFESSIONAL INCOME AND THAT FIGURE WAS FINALLY TA KEN INTO ACCOUNT WHILE GIVING THE SET OFF AGAINST THE UNDISCLOSED ASSETS. THE LE ARNED CIT(A) HAS CONCLUDED THAT UNEXPLAINED INVESTMENT WAS RS.21 40 212/- WHIC H HAS EXCEEDED THE UNDISCLOSED INCOME WORKED OUT AT RS.19 54 220/- TH EREFORE THE FINAL FIGURE WHICH WAS ADOPTED BY THE LEARNED CIT(A) WAS AT RS.2 1 40 212/-. IF WE ACCEPT THE ARGUMENT OF THE LEARNED AR THEN THE FINAL FIGU RE OF UNDISCLOSED INCOME WOULD FURTHER GO DOWN WHICH WILL NOT MATCH WITH THE TOTAL OF UNEXPLAINED IT(SS)A NO.160 AND 172/AHD/2004 -7- INVESTMENT. HOWEVER IT WOULD RESULT INTO AN ANOMA LY AND DUE TO THIS REASON AS WELL WE ARE NOT INCLINED TO FURTHER REDUCE THE UNDISCLOSED INCOME AS WORKED OUT BY THE LEARNED CIT(A). WITH THIS REMARK WE FI ND NO FORCE IN THE ABOVE CALCULATION AS SUGGESTED BY THE LEARNED AR HENCE C ONFIRM THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS BOTH GROUNDS OF THE ASSE SSEES APPEAL. B. IT(SS)NO.172/AHD/2004 (REVENUES APPEAL) 8. THE REVENUE HAS RAISED SEVERAL GROUNDS WHICH ARE REPRODUCED BELOW: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO ADOPT THE UNDISCLOSED PROFESSIONAL INCOME AT RS.19 10 909/- A S AGAINST RS.22 05 312/- WORKED OUT BY THE AO. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.7 50 000/- MADE ON ACCOUNT OF UNEXP LAINED CASH FOUND FROM THE RESIDENCE AND THE HOSPITAL TO RS.2 5 0 000/-. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.4 69 400/- MADE ON ACCOUNT OF UNEXP LAINED INVESTMENT IN JEWELLERY AND GOLD ORNAMENTS TO RS.2 03 473/-. 4. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.12 57 098/- MADE ON ACCOUNT OF UNEX PLAINED DEPOSITS IN THE BANKS TO RS.2 10 120/-. 5. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.3 00 000/- MADE ON ACCOUNT OF UNEXP LAINED RECEIPTS OF NRI GIFTS TO RS.1 50 000/-.. 6. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.16 85 944/- MADE ON ACCOUNT OF UNEX PLAINED INVESTMENT MADE IN VARIOUS ASSETS TO RS.9 64 619/-. 7. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO RESTRICT THE ADDITION RS.10 00 000/- MADE ON ACCOUNT OF UNEX PLAINED DEPOSITS IN THE NAMES OF CHILDREN TO RS.3 18 000/-. 9. APROPOS GROUND NO.1 WE HAVE ALREADY CONFIRMED THE FINDINGS OF THE LEARNED CIT(A) SUPRA. THE BASIS OF 15% FOR THE CAL CULATION OF UNDISCLOSED INCOME HAS BEEN CONFIRMED BY US IN THE FOREGOING PA RAGRAPHS. THE LEARNED IT(SS)A NO.160 AND 172/AHD/2004 -8- CIT(A) HAS CORRECTLY ADOPTED A SYSTEMATIC PROCEDURE THROUGH WHICH THE CALCULATION OF 15% WAS STREAMLINED. IT IS ALSO TRU E THAT THERE WAS SOME FALLACY IN THE CALCULATION AS MADE BY THE AO WHICH WAS RECT IFIED BY THE LEARNED CIT(A) AND THEREFORE THE METHOD AS ADOPTED BY THE L EARNED CIT(A) IS HEREBY CONFIRMED. THE REVENUES GROUND IS THEREFORE DISMI SSED. 10. APROPOS GROUND NO.2 THE TOTAL CASH OF RS.7 80 850/- WAS FOUND AT THE RESIDENCE AND THE BUSINESS PREMISES. BEFORE THE FI RST APPELLATE AUTHORITY THE ASSESSEE HAS EXPLAINED THE POSITION OF CASH AS REFL ECTED IN THE BOOKS OF ACCOUNTS OF HUF STATED TO BE SEPARATELY ASSESSED TO TAX. ON THAT BASIS A RELIEF OF RS.5 00 000/- PERTAINING TO THE AVAILABILITY OF CAS H WAS ACCEPTED BY THE LEARNED CIT(A). THE LEARNED CIT(A)HAS FINALLY COME TO THE CONCLUSION THAT OUT OF THE TOTAL CASH FOUND ONLY A CASH TO THE TUNE OF RS.2 5 0 000/- WAS THE UNDISCLOSED ASSETS. ONCE THE LEARNED CIT(A) HAS EXAMINED THE A VAILABILITY OF CASH IN THE RESPECTIVE HANDS THEREFORE WE FIND NO REASON TO INT ERFERE WITH THE SAID FINDINGS OF THE LEARNED CIT(A). WITH THE RESULT THIS GROUN D OF THE REVENUE IS DISMISSED. 11. APROPOS GROUND NO.3 THE TOTAL WEIGHT OF THE GOLD ORNAMENTS FOUND AT THE TIME OF SEARCH WAS 2606 GRAMS. BEFORE THE LEAR NED CIT(A) THE ASSESSEE EXPLAINED THAT 2101 GRAMS BELONGED TO THE ASSESSEE S WIFE AND BROTHER AND ALSO STOOD EXPLAINED IN HIS HAND. WITH THE RESULT THE LEARNED CIT(A) HAS HELD ONLY THE BALANCE WEIGHT OF GOLD JEWELLERY OF 505 GRAMS A S UNEXPLAINED INVESTMENT. THE REASONS ASSIGNED BY THE LEARNED CIT(A) AND THE CALCULATION MADE BY HIM NEEDS NO INTERFERENCE THEREFORE HIS VIEW IS HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS DISMISSED. 12. APROPOS GROUND NO.4 THE OBSERVATION OF THE AO WAS THAT ON VERIFICATION OF THE REGULAR BOOKS OF ACCOUNTS FOR T HE BLOCK PERIOD AND THE BANK STATEMENTS IT WAS FOUND THAT CERTAIN DEPOSITS WERE NOT REFLECTED. THE AO HAS EXTRACTED THE FIGURES FROM THE BANK STATEMENTS WHIC H WERE NOT FOUND REFLECTED IT(SS)A NO.160 AND 172/AHD/2004 -9- IN THE REGULAR BOOKS OF ACCOUNTS. SEVERAL BANK ACC OUNTS I.E. BANK OF INDIA DENA BANK STATE BANK OF SAURASHTRA AND BANK OF BAR ODA WERE EXAMINED AND TOTAL OF SUCH DEPOSITS WERE FOUND TO BE TO THE EXTE NT OF RS.12 57 098/- WHICH WAS TAXED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 13. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST AP PELLATE AUTHORITY THE ASSESSEE HAS FURNISHED AN EXPLANATION TO DEMONSTRAT E THE AVAILABILITY OF FUND WHICH WAS FOUND DEPOSITED IN THE BANK ACCOUNTS. AF TER VERIFYING EACH AND EVERY ENTRY THE LEARNED CIT(A) HAS NOTICED THAT ST ILL THERE WERE DISCREPANCIES TO THE EXTENT OF RS.2 54 120/-. WITH THE RESULT T HE ADDITION WAS RESTRICTED TO THAT EXTENT ONLY. NOW BEFORE US THE REVENUE HAS N OT PLACED ANY EVIDENCE TO DEMONSTRATE THAT THE EXPLANATION OFFERED BY THE ASS ESSEE IN RESPECT OF DEPOSITS IN THE BANK IN ANY MANNER WAS DEFECTIVE. THEREFOR E WE FIND NO REASON TO DISTURB THE FINDINGS ON FACTS OF THE LEARNED CIT(A) AND THE SAME ARE HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS DISMISSED . 14. APROPOS GROUND NO.5 OUT OF THE TOTAL NRI GIFT RECEIPT OF RS.3 00 000/- A SUM OF RS.1 50 000/- WAS THE GIFT RECEIVED BY THE WIFE OF THE ASSESSEE SMT. PUSHPABEN. THE LEARNED CIT(A) HAS E XCLUDED THE SAID AMOUNT FROM THE HANDS OF THE ASSESSEE AND RESTRICTED THE A DDITION TO RS.1 50 000/- ONLY. ONCE THE GIFT OF THE WIFE HAS STATED TO BE SEPARATE LY ASSESSED IN HER HANDS NATURALLY IT OUGHT TO HAVE BEEN EXCLUDED FROM THE H ANDS OF THE ASSESSEE. THEREFORE THE LEARNED CIT(A) HAS TAKEN THE RIGHT D ECISION WHICH IS HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS ALSO DISM ISSED. 15. APROPOS GROUND NO.6 VARIOUS LOOSE PAPERS WERE FOUND TO WHICH THE REVENUE HAS MADE AN OBSERVATION THAT THE ASSESSEE H AD MADE CERTAIN INVESTMENTS IN THE NAMES OF MINOR CHILDREN AND IN H IS OWN NAME WHICH REMAINED UNDISCLOSED. THE AO HAS MADE LIST OF AS A NNEXURES IN THE IMPUGNED ASSESSMENT ORDER. THE TOTAL OF THE SAID INVESTMENT SUCH AS BONDS OF ICICI IDBI PPF DEPOSITS UTI INVESTMENTS ETC. WERE TOTAL ING TO RS.16 85 944/-. THE IT(SS)A NO.160 AND 172/AHD/2004 -10- AFORESAID AMOUNT WAS HELD AS UNDISCLOSED INVESTMENT IN THE HANDS OF THE ASSESSEE. BEFORE THE LEARNED CIT(A) THE ASSESSEE HAS TRIED TO EXPLAIN EACH AND EVERY ITEM EXCEPT FEW ITEMS TOTALING TO RS.9 64 619 /- LISTED AS FOLLOWS: 1) SHARES : RS.2 29 435/- 2) BONDS : RS.1 21 750/- 3) SHARES & BONDS : RS.3 43 250/- 4) FIXED DEPOSITS : RS. 30 000/- 5) PPF IN THE NAME OF MOTHER & : RS.1 20 000/- GRAND MOTHER 6) DEPOSIT IN THE NAME OF GRAND : RS. 42 000/- MOTHER 7) GOLD PURCHASE : RS. 55 100/- 8) TOUR EXPENSES (AS CORRECTED) : RS. 22 584/- TOTAL RS.9 64 619/- AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES AND ESPECIALLY IN THE ABSENCE OF ANY CONTRARY MATERIAL PRODUCED FROM THE SIDE OF THE REVENUE WE HEREBY UPHOLD THE FACTUAL FINDINGS RECORDED BY THE LEARNE D CIT(A). THE UNEXPLAINED INVESTMENT UNDER THE HEAD OTHER UNDISCLOSED ASSETS THEREFORE STANDS REDUCED TO RS.9 64 619/-. THIS GROUND OF THE REVENUE IS TH EREFORE DISMISSED. 16. APROPOS GROUND NO.7 IT WAS NOTICED BY THE AO THAT THERE WERE THREE BANK ACCOUNTS IN THE NAMES OF MINOR CHILDREN. AS P ER THE AO THE MINOR CHILDREN OF THE ASSESSEE DID NOT HAVE ANY INDEPENDE NT SOURCE OF INCOME. A SUM OF RS.10 00 000/- WAS THE TOTAL AMOUNT WHICH WA S DEPOSITED IN THE BANK ACCOUNT DURING THE ENTIRE BLOCK PERIOD. IT WAS ALS O ALLEGED THAT A SUM OF RS.6 00 000/- WAS WITHDRAWN IN CASH AND OUT OF THAT AGAIN A SUM OF RS.2.66 LAKHS WAS RE-DEPOSITED. HOWEVER THE AO HAS MADE T HE ADDITION OF ENTIRE AMOUNT OF RS.10 00 000/- IN THE HANDS OF THE ASSESS EE AS UNDISCLOSED INCOME. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELL ATE AUTHORITY THE ASSESSEE HAS TENDERED AN EXPLANATION THAT THE AMOUNTS WHICH WERE FOUND RE-DEPOSITED COULD HAVE BEEN ASKED TO EXPLAIN AND THE AMOUNT WHI CH WERE WITHDRAWN SHOULD BE TREATED AS USED IN OTHER UNEXPLAINED INVE STMENTS. FURTHER IT WAS PLEADED THAT THE PEAK DEPOSITS WERE AVAILABLE FOR UNEXPLAINED INVESTMENT. THE LEARNED CIT(A) HAS EXAMINED THE DEPOSITS AND TH EREFORE CONCLUDED THAT IT(SS)A NO.160 AND 172/AHD/2004 -11- ONLY A SUM OF RS.3 18 000/- REMAINED UNEXPLAINED IN THE HANDS OF DEEPALI VANDANA AND DHAWAL. WHILE THE LEARNED CIT(A) HAS EX AMINED EACH AND EVERY AMOUNT OF DISPUTE SEPARATELY I.E. THE DEPOSITS FOU ND IN THE NAMES OF THE CHILDREN BUT THE REVENUE DEPARTMENT HAS NOT PLACED ANY CONTRARY MATERIAL THEREFORE THOSE FINDINGS ON FACTS BY THE LEARNED CIT(A) ARE HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS ALSO DISM ISSED. 17. REST OF THE GROUNDS RAISED BY THE REVENUE IN TH E APPEAL ARE GENERAL IN NATURE WHICH NEED NO INDEPENDENT ADJUDICATION HEN CE DISMISSED. 18. IN THE RESULT THE ASSESSEES AS WELL AS REVENU ES APPEAL BOTH ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH FEBRUARY 2011. SD/- SD/- (G.D. AGARWAL) VICE-PRESIDENT (MUKUL KR. SHRAWAT) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 28-02-2011 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