The ACIT, Central Circle-1(1),, Ahmedabad v. Shri Jyotindra O.Shah,, Ahmedabad

ITSSA 321/AHD/2004 | misc
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 32120516 RSA 2004
Assessee PAN AINPS8418H
Bench Ahmedabad
Appeal Number ITSSA 321/AHD/2004
Duration Of Justice 5 year(s) 7 month(s) 14 day(s)
Appellant The ACIT, Central Circle-1(1),, Ahmedabad
Respondent Shri Jyotindra O.Shah,, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-07-2010
Date Of Final Hearing 04-05-2010
Next Hearing Date 04-05-2010
Assessment Year misc
Appeal Filed On 09-12-2004
Judgment Text
NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 1 IN THE INCOME_TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE SHRI MAHAVIR SINGH AND SHRI_D.C. AGRAWAL IT(SS) A NO.325/AHD/2004 (BLOCK PERIOD: 1-4-95 TO 27-9- 2001) SHRI JYOTINDRA O. SHAH 31 SHANTINAGAR SOCIETY VADAJ AHMEDABAD. VS ASSISTANT COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-1(1) 3RF FLOOR AAYAKAR HAVAN ASHRAM ROAD AHMEDAAD. (APPELLANT) (RESPONDENT) AND IT(SS) A NO.321/AHD/2004 (BLOCK PERIOD: 1-4-95 TO 27-9- 2001) ASSISTANT COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-1(1) 3RF FLOOR AAYAKAR HAVAN ASHRAM ROAD AHMEDAAD. VS SHRI JYOTINDRA O. SHAH 31 SHANTINAGAR SOCIETY VADAJ AHMEDABAD. (APPELLANT) (RESPONDENT) PAN: AINPS 8418 H BY ASSESSEE. : SHRI.HIMANSHU SHAH. BY DEPARTMENT : SHRI RAJEEV AGARWAL D. R. ( (( ( )/ )/)/ )/ ORDER PER SHR D.C. AGRAWAL A.M. THESE ARE THE TWO CROSS APPEALS ONE FILED BY THE A SSESSEE AND OTHER FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. C .I.T.(A) DATED 24-9-2004 ARISING FROM THE ORDER OF THE ASSESSING OFFICER PAS SED U/S. 158BC OF THE ACT. IN ITS APPEAL ASSESSEE HAS RAISED FOLLOWING GROUNDS :- NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 2 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE APPELLANTS CASE THE LD. C.I.T. (A) HAS GROSSLY ERRED IN POINT S OF LAW AND FACTS. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T. (A) HAS GROSSLY ERRED IN CONFI RMING DISALLOWANCE OF RS.16 000/- ON ACCOUNT OF SALARY OF ACCOUNTANT. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T.(A) HAS GROSSLY ERRED IN CONFIR MING ADDITION IN PART FOR RS.2 07 031/- ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARES WHICH WERE MADE PRIOR TO THE BLOCK PERIOD. HOWEVER FURTHER RELIEF OF RS.1 33 000/- WAS GIVEN WHICH WAS OFFERED FOR TAX I N RETURN AS BUFFER DISCLOSURE. IF THE ADDITION IS REDUCED THE CREDIT FOR THE BUFFER DISCLOSURE RS.1 30 000/- CAN BE GIVEN AGAINST OTHER ADDITIONS CONFIRMED IN APPEAL. 4. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T.(A) HAS GROSSLY ERRED IN CONFIR MING DISALLOWANCE OF RS.40 150/- ON ACCOUNT OF DEPRECIATION OF MOTOR CAR . 5. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T.(A) HAS GROSSLY ERRED IN CONFIR MING DISALLOWANCE OF RS.45 000/- AS ESTIMATED EXPENSES BEING HALF OF TH E TOTAL AMOUNT OF GIFTS RECEIVED. 6. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T.(A) HAS GROSSLY ERRED IN CONFIR MING THAT INCOME OF RS.38.83 LACS SHOULD BE ASSESSED IN THE CASE OF NIR MA LTD. IT SHOULD BE EXCLUDED FROM THE APPELLANTS CASE. 7. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. C.I.T.(A) HAS GROSSLY ERRED IN DIRECT ING TO RE-COMPUTE THE INTEREST CHARGEABLE U/S. 158BFA WHILE GIVING EFFECT TO THE APPEAL ORDER. 2. WHEREAS THE REVENUE RAISED FOLLOWING GROUNDS IN ITS APPEAL :- 1. THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DI RECTING TO RESTRICT THE ADDITION OF RS.90 000/- MADE ON ACCOUNT OF ALLE GED GIFTS AND CHANDLA INCOME RECEIVED DURING THE RE-MARRIAGE CERE MONY OF THE ASSESSEE TO RS.45 000/-. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING THAT THE UNDISCLOSED INCOME OF RS.38.83 LACS SHOULD BE ASSES SED IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS THOUGH NEITHER THE ASSESSEE HAD NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 3 OFFERED THE SAME FOR TAXATION IN THE BLOCK RETURN N OR HAD THE ASSESSING OFFICER ASSESSED IT ON PROTECTIVE BASIS IN THE HAND S OF THE ASSESSEE. 3. ON THE FACTS AND I THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 3. THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZ URE ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 27-9-2001 IN THE GROUP OF CASES OF NIRMA LTD THE RESIDENTIAL PREMISES OF THE ASSESSEE WAS ALSO C OVERED IN THE SEARCH. AS A RESULT THE RETURN OF INCOME FOR THE BLOCK PERIOD 1-4-1995 TO 27-9-2001 WAS FILED BY THE ASSESSEE ON 28-11-2002 DECLARING AN UN DISCLOSED INCOME OF RS.61 LACS. HOWEVER THE BLOCK ASSESSMENT WAS FINAL IZED BY THE ASSESSING OFFICER ON 28-10-2003 ON AN UNDISCLOSED INCOME OF R S.66 90 146/-. THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED BY THE LD . C.I.T.(A) AND THEREFORE BOTH THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE US RAISING THE GROUNDS AS ABOVE. 4. GROUND NO.1 IN ASSESSEES APPEAL IS GENERAL AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION AND HENCE IT IS REJECTED. 5. GROUND NO.2 RELATES TO THE PAYMENT OF SALARY OF ACCOUNTANT. THE ASSESSEE IS A SALARIED EMPLOYEE WORKING AS PURCHASE MANAGER IN M/S.NIRMA LTD. THE ASSESSING OFFICER NOTICED FROM THE WORKING OF UNDISCLOSED INCOME SUBMITTED BY THE ASSESSEE THAT IT HAS CLAIMED EXPEN SES ON ACCOUNT OF SALARY PAID TO THE ACCOUNTANT. THIS CLAIM WAS NOT SUBSTANT IATED AND HENCE WAS DISALLOWED. THE LD. C.I.T.(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. ON THE SUBMISSIONS MADE BY THE A SSESSEE AND AFTER CONSIDERING THE REMAND REPORT THE LD. C.I.T.(A) OB SERVED THAT PAYMENT OF SALARY TO SHRI BHARAT TRIVEDI THE ACCOUNTANT IS NOT SUBSTANTIATED IN AS MUCH AS IT IS NOT PROVED THAT EXPENDITURE HAS BEEN INCURRED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 4 6. WE HAVE HEARD THE LD. A.R. AND THE D.R. IN OUR C ONSIDERED VIEW NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. C.I.T. (A). IT IS NOT PROVED THAT SHRI BHARAT TRIVEDI HAD RENDERED ANY SERVICES TO TH E ASSESSEE OR HOW HE WAS IN EMPLOYMENT OF THE ASSESSEE OR WHY HE WAS NOT IN EMPLOYMENT IN REGULAR BUSINESS AND WHY ONLY IN UNDISCLOSED BUSINESS. NO D OCUMENTARY EVIDENCE ABOUT ANY SALARY PAYMENT OR SERVICES RENDERED BY SH RI BHARAT TRIVEDI WAS FOUND. IN NORMAL COURSE PAYMENT OF SALARY SHOULD HA VE BEEN PART OF THE REGULAR INCOME AND UNLESS EVIDENCE IS PRODUCED TO S HOW THAT SUCH PAYMENT WAS DONE FROM UNDISCLOSED INCOME. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS REJECTED. 7. GROUND NO.3 IN ASSESSEES APPEAL. DURING THE COURSE OF EXAMINATION OF THE DOCUMENTS THE ASSESSING OFFICER FOUND THAT ASSESSEE HAS MADE INVESTMENT IN SHARES TO THE EXTENT OF RS. 2 62 031/-. IN FACT THE A.O. FOUND INVOICE OF INVESTMENT TO THE EXTENT OF RS.10 99 545/- OUT OF WHICH ASSESSEE HAD FURNISHED EVIDENCE TO THE EXTENT OF RS.8 37 514/- AND A RESULT A SUM OF RS.2 62 031/- S URVIVED WHICH WAS NOT EXPLAINED. THE A.O. ACCORDINGLY MADE THE ADDITION T O THIS EXTENT. 8. BEFORE THE LD. CIT(A) ASSESSEE FURNISHED FURTHE R EVIDENCES TO THE EXTENT OF RS.1 33 900/- AND RS. 55 000/- TOTALING T O RS.1 88 000/-. THE LD. C.I.T.(A) THEREFORE CONFIRMED THE ADDITION OF BALA NCE OF RS.74 031/-. IN THIS REGARD HE OBSERVED AS UNDER :- 7.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS OF THE A.R. OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE T HROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER AND THEN IN THE REMAND REPORT. THE ASSESSING OFFICER HAS MAD E ADDITION OF RS.2 62 031/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES OF ELEVEN COMPANIES. IT IS SEEN FROM THE DETAILS PRODU CED BEFORE ME BY THE A.R. OF THE APPELLANT THAT THE APPELLANT HAS MA DE INVESTMENTS IN SHARES AMOUNTING TO RS.55 000/- IN THREE COMPANIES PRIOR TO 1-4-95 I.E. OUTSIDE BLOCK PERIOD. THE ASSESSING OFFICER IN THE REMAND REPORT HAS NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 5 NOT GIVEN ANY ADVERSE COMMENT AND ACCEPTED THAT SUM OF RS.55 000/- INVESTED BY THE APPELLANT IN THREE COMPANIES PRIOR TO THE BLOCK PERIOD. THUS THE AMOUNT OF RS.2 07 031/-(RS.2 62 03155 00 0) BEING INVESTMENT IN SHARES IS NOT EXPLAINED. HOWEVER THE APPELLANTS REQUEST TO ADJUST THE SAME WITH BUFFER DISCLOSURE OF RS.1 3 3 000/- IS TO BE CONSIDERED AS THE APPELLANT HAS MADE ADDITIONAL DIS CLOSURE OF RS.1 33 000/- TO COVER UP ADDITIONS IF MADE DURING THE ASSESSMENT. THE APPELLANT GETS RELIEF OF RS.1 88 000/- (RS.55 000 + 1 33 000/-) AND .FOR THE BALANCE AMOUNT OF RS.74 031/- THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. THE ASSESSING OFFICER IS DIRE CTED ACCORDINGLY. SINCE THE CREDIT OF THE BUFFER DISCLOSURE OF RS.1 3 3 000/- HAS BEEN GIVEN HERE AGAINST THE INVESTMENT IN SHARES IT WILL NOT BE GIVEN AGAINST ANY OTHER ADDITION CONFIRMED. 9. WE HAVE HEARD LD. A.R. AND THE DEPARTMENTAL REPR ESENTATIVE. THE CLAIM OF LD. A.R. IS THAT ALL THESE SHARES WERE PUR CHASED PRIOR TO BLOCK PERIOD AND THEREFORE NO ADDITION THEREON COULD BE MADE IN THE BLOCK PERIOD. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE L D. C.I.T.(A) AND SUBMITTED THAT EVIDENCE OF ASSESSEES ACQUIRING SHARES PRIOR TO BLOCK PERIOD HAVE NOT BEEN FURNISHED. EVEN BEFORE US NO EVIDENCE HAS BEEN FURNISHED TO SHOW THAT ASSESSEE HAS PURCHASED THE SHARES PRIOR TO BLOCK PE RIOD OR THEY WERE REGISTERED IN HIS NAME PRIOR TO BLOCK PERIOD. ACCOR DINGLY WE DECLINE TO INTERFERE. THIS GROUND OF THE ASSESSEE IS REJECTED. 10. GROUND NO.4 RELATES TO DISALLOWANCE OF DEPRECIA TION ON MOTOR CAR . THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE IN THE BLOCK RETURN ON THE GROUND THAT NO EVIDENCE REGARDING ANY BUSINESS OR PROFESSION CARRIED OUT BY THE ASSESSEE HAS BEEN FOUND IN THE SEARCH AND NO SUCH CLAIM OF BUSINESS INCOME HAS BEE N MADE DURING THE BLOCK ASSESSMENT PROCEEDINGS. EVEN IN THE STATEMENT RECOR DED DURING THE COURSE OF SEARCH ASSESSEE DID NOT SUBSTANTIATE THE UNDISCLOS ED INCOME. IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT UNDISCLOSED INCOME WAS EARNED IN DISCHARGE OF HIS DUTIES AS SALARIED EMPLOYEE. THE A SSESSING OFFICER DID NOT AGREE. ACCORDINGLY THE CLAIM OF DEPRECIATION ON MOT OR CAR WAS DISALLOWED. THE LD. C.I.T.(A) ALSO CONFIRMED THE CLAIM OF DISALLOWA NCE ON THE GROUND THAT NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 6 ASSESSEE IS NOT ENGAGED IN ANY BUSINESS DURING THE BLOCK PERIOD. HE OBSERVED AS UNDER :- 8.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS OF THE A.R. OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE T HROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER AND THEN IN THE REMAND REPORT. IT IS SEEN THAT THE APPELLANT IS SALARIED EMPLOYEE OF NIRMA LTD. IN THE REGULAR RETURN EVEN THE APPEL LANT HAS SHOWN INCOME FROM SALARY AND NOT FROM ANY BUSINESS OR PRO FESSION. IT IS SEEN THAT EVEN DURING THE COURSE OF SEARCH NO EVIDENCE R EGARDING ANY BUSINESS OR PROFESSION CARRIED OUT BY THE APPELLANT HAS BEEN FOUND AS MENTIONED BY THE ASSESSING OFFICER. IT IS FURTHER S EEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN REPLY TO QUEST ION NO.8 THE APPELLANT HAS SUBMITTED THAT THIS INCOME WAS EARNED BY HIM AS APPRECIATION MONEY RECEIVED FROM DIFFERENT COMPANY IN THE COURSE OF HIS DUTIES FOR M/S. NIRMA LIMITED. DEPRECIATION IS ALLOWABLE WHEN THE ASSESSEE HAS PURCHASED ASSET AND USED IT WHOLLY AND EXCLUSIVELY FOR HIS BUSINESS PURPOSE. IN THE INSTANT CASE THE APPEL LANT IS A SALARIED EMPLOYEE AND IS NOT ENGAGED IN ANY BUSINESS DURING THE RELEVANT BLOCK PERIOD. HAVING CONSIDERED THE FACTS OF THE CASE CAR EFULLY THERE IS NO JUSTIFICATION FOR INTERFERING WITH THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION. THE ADDITION MA DE BY THE ASSESSING OFFICER OF RS.40 150/- IS THEREFORE CONFIRMED. 11. WE HAVE HEARD LD. A.R. AND DEPARTMENTAL REPRESE NTATIVE. THE CLAIM OF THE LD. A R. IS THAT ASSESSEE HAS DECLARED UNDIS CLOSED INCOME WHICH IS BUSINESS INCOME AND THEREFORE DEPRECIATION SHOULD HAVE BEEN ALLOWED. ON THE OTHER HAND LD. D.R. SUBMITTED THAT IF ASSESSEE WAS DOING BUSINESS THEN DEPRECIATION SHOULD HAVE BEEN CLAIMED IN REGULAR RE TURN. IT CANNOT BE CLAIMED IN BLOCK RETURN. SINCE THE ASSESSEE HAS NOT COME OU T WITH SOURCE OF INCOME OUT OF WHICH DISCLOSURE HAS BEEN MADE IN THE BLOCK RETURN AND RATHER IT HAS BEEN SHOWN AS EARNED AS SALARIED EMPLOYEE THE CLAI M OF DEPRECIATION CANNOT BE ALLOWED. IT IS NOT SHOWN THAT ASSESSEE HAD A MOT OR CAR WHICH WAS USED IN BUSINESS WHOSE INCOME WAS UNDISCLOSED AND THAT EXPE NDITURE RELATING TO RUNNING OF MOTOR CAR WAS ALSO CLAIMED IN BLOCK RETU RN. SINCE THE CLAIM IS NOT SUBSTANTIATED THE AUTHORITIES HAVE RIGHTLY DISALLO WED THE SAME. THIS GROUND OF THE ASSESSEE IS ALSO ACCORDINGLY REJECTED. NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 7 12. GROUND NO.5 IN ASSESSEES APPEAL AND GROUND NO.1 I N REVENUE APPEAL. THEY RELATE TO THE DISALLOWANCE OF EXPENSES OF RS.4 5 000/- OUT OF GIFT RECEIVED IN MARRIAGE. THE ASSESSEE HAS CLAIMED THAT HE GOT M ARRIED ON 12-3-99 AND IN THE MARRIAGE HE RECEIVED RS.90 000/- AS GIFT. THE A SSESSING OFFICER FOUND THAT NO DOCUMENTARY EVIDENCE IN SUPPORT OF THE CONTENTIO N THAT WHOLE OF THE MARRIAGE EXPENDITURE WERE BORNE BY IN-LAWS. THE ASS ESSEE HAS NOT SHOWN ANY CASH EXPENSES. ACCORDINGLY THE A.O. TREATED A SUM OF RS.90 000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 13. THE LD. C.I.T.(A) HOWEVER ACCEPTED THE CLAIM OF GIFT OF RS.90 000/- ON THE BASIS OF EVIDENCE SUBMITTED BY THE ASSESSEE AND AFTER GETTING THE REMAND REPORT BUT HE HELD THAT ASSESSEE MUST HAVE SPENT M ONEY ON ORGANIZING HIS MARRIAGE AND MUST HAVE SPENT RS 45 000/-. ACCORDING LY HE CONFIRMED THE ADDITION TO THIS EXTENT. IN THIS REGARD HE OBSERVED AS UNDER :- 9.2. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE THROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER AND THEN IN THE REMAND REPORT. I HAVE ALSO GONE THROUGH THE CONFIRMATIONS FILED BEFORE ME BY THE A.R. OF THE APPELLANT. ON CAREFUL PERUSAL OF THE SAME IT IS SEEN THAT THE APPELLANT HAS RECEIVED CASH GIF TS/CHANDLA FROM HIS RELATIVES AND FRIENDS ON OCCASION OF REMARRIAGE AND SOME OF THEM ARE ASSESSED TO INCOME TAX. IN THESE CIRCUMSTANCES IT CAN NOT BE SAID THAT THE APPELLANT HAS NOT DISCHARGED HIS ONUS. HAVING C ONSIDERED THE FACTS OF THE CASE CAREFULLY THE RECEIPT OF GIFTS OF RS. 90 000/- IS ACCEPTED. AT THE SAME TIME THE ASSESSING OFFICER HAS RIGHTLY PO INTED OUT THAT THE APPELLANT HAS NOT SHOWN ANY EXPENSES ON THE REMARRI AGE CEREMONY. EVEN IF THERE WAS A SIMPLE CEREMONY AT THE TIME OF REMARRIAGE AS STATED BY THE APPELLANT THERE WOULD BE SOME EXPEND ITURE INVOLVED. RECEIPT O GIFT AT A SOCIAL OCCASION LIKE REMARRIAGE IS NOT A ONE-WAY PROCESS. IF THERE IS A SOCIAL CEREMONY THERE HAS T O BE SOME EXPENSES ESPECIALLY A FUNCTION IN WHICH GIFTS OF RS. 90 000/ - HAVE BEEN RECEIVED. THE APPELLANTS A.R. WAS SPECIFICALLY ASKED ABOUT T HE EXPENSES INVOLVED IN THE CEREMONY BUT HE INSISTED THAT IT W AS A SIMPLE CEREMONY AND DID NOT GIVE ANY DETAILS OF EXPENDITURE. AFTER CONSIDERING THE FACTS OF CASE AND THE CIRCUMSTANCES I ESTIMATE THE EXPEN SES (NOT RECORDED NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 8 IN THE BOOKS) AT RS. 45 000/- (I.E.HALF OF THE TOTA L AMOUNT OF GIFTS RECEIVED). THE ADDITION CONFIRMED IS TO THE EXTENT OF RS.45 000/-. 14. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORDS. IN OUR CONSIDERED VIEW THE LD. C.I.T.(A) W AS JUSTIFIED IN ACCEPTING THAT THE ASSESSEE HAS RECEIVED GIFT OF RS.90 000/-. ALL THE DONORS ARE ASSESSED TO TAX. EVEN THOUGH THE MARRIAGE WAS SIMPLE BUT THE DO NORS HAVE ACCEPTED TO HAVE GIVEN GIFTS. THEREFORE FACTUM OF THE GIFT IS ACCEPTABLE. HOWEVER THEY CLAIM THAT MARRIAGE WAS SIMPLE CAN BE PARTIALLY ACC EPTED AND ACCORDINGLY ESTIMATE OF EXPENDITURE ON MARRIAGE IS REDUCED TO R S.30 000/-. THE ASSESSEE GETS A RELIEF OF RS.15 000/-.THIS GROUND OF THE ASS ESSEE IS PARTLY ALLOWED WHEREAS GROUND RAISED BY THE REVENUE IS DISMISSED. 15. GROUND NO.6 IN ASSESSEES APPEAL AND GROUND NO. 2 OF REVENUES APPEAL. 15.1. THE FACTS RELATING TO THESE GROUNDS ARE MENTI ONED BY THE ASSESSING OFFICER IN PARAGRAPH 9 OF HIS ORDER. AFTER EXAMININ G THE EVIDENCE ON PAGE 269- 270 OF ANNEXURE A-18 SHOWING RECEIPT AND PAYMENT OF MONEY BY THE ASSESSEE THE ASSESSING OFFICER MADE FOLLOWING INFE RENCES :- (1) IT IS HELD THAT THESE TRANSACTIONS NOTED ON PA GE 269 & 270 OF DIARY MAINTAINED BY SHRI J.O.SHAH IN THE COURSE OF HIS DUTIES AS PURCHASE MANAGER OF NIRMAL LTD. PERTAIN TO M/S. NI RMA LTD. AND NOT TO THE ASSESSEE. (2) IT IS ALSO HELD THAT THE UNDISCLOSED INCOME RET URNED BY THE ASSESSEE IS ON THE BASIS OF SEIZED EVIDENCES IS HIS OWN CASE. IN THIS AS PER NOTINGS ON PAGE-81 OF ANNEX. A-10 THE ASSESSEE HAD AS ON 3-7-2000 CASH IN HAND OF RS.27 LACS. THIS CASH BALANCE IS INCORPORATED IN THE BOOKS OF ACCOUNTS NO W SUBMITTED. (4) HOWEVER TO TAKE BENEFIT OF THIS CASH BAL ANCE WHICH HAS NOW BEEN INCORPORATED IN THE BOOKS OF ACCOUNTS SUBMITTE D FOR THE BLOCK PERIOD THE ASSESSEE HAS TRIED TO EXPLAIN THE UNACCOUNTED PAYMENTS OF HIS EMPLOYER MADE IN THE MONTH OF JUNE 2000 WHICH ARE EVIDENCED BY PAGES 269 & 270 OF ANNEXURE- A-18. IN VIEW OF THIS THESE TRANSACTIONS ARE BEING DEALT WI TH IN THE BLOCK ASSESSMENT OF NIRMA LTD. FURTHER IT IS HELD THAT AS THE ASSESSEE HAS ALREADY INCORPORATED THE CASH BALANCE REFLECTED ON PAGE 81 NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 9 OF A-10 IN THE BOOKS OF ACCOUNTS THIS OWING UP AND ITS REJECTION ON THE BASIS OF THE CIRCUMSTANTIAL EVIDENCES AS DIS CUSSED ABOVE HAS NO IMPACT OF ON THE ASSESSMENT OF UNDISCLOSED I NCOME OF THE ASSESSEE. THIS IS SO AS THE CASH OUTFLOW ON ACC OUNT OF THESE PAYMENTS INCORPORATED IN THE BOOKS NOW HELD TO BE OF NIRMA LTD. HAVE BEEN RECOUPED WITHIN A PERIOD OF 15 DAYS IN THE CASH BOOK ON ACCOUNT OF ALLEGED RETURN. 17. THE DETAILS OF TRANSACTIONS ARE GIVEN BY LD. A. O. AND C.I.T.(A) IN THEIR ORDERS. THE A.O. TREATED THIS INCOME AS THAT OF NIR MA LTD. AND PROPOSED TO MAKE SUBSTANTIVE ASSESSMENT IN THAT CASE WHEREAS HE PROPOSED PROTECTIVE ASSESSMENT IN THE CASE OF THE ASSESSEE. THE LD. C.I .T.(A) DID NOT AGREE WITH THE A.O. AND HELD THAT INCOME DID NOT PERTAIN TO NI RMA LTD. AND THEREFORE ONCE THE ASSESSEE HAS DECLARED THE SAME AS HIS INCO ME IN THE BLOCK RETURN THERE IS NO CASE FOR UPHOLDING IT AS INCOME OF NIRM A LTD. THE LD. CIT(A) BASED HIS REASONING AS UNDER :- (A) THE ISSUE UNDER QUESTION I.E. ADDITION OF UNDI SCLOSED INCOME OF RS.38.83 LACS. IS BASED ON NOTINGS ON PAGE 269 AND 270 OF ANNEXURE A-18 SEIZED FROM THE APPELLANTS RESIDENCE . AS PER PRESUMPTION U/S. 132(4A) OF THE I. T. ACT THE INCO ME IS DEEMED TO BE OF THE PERSON FROM WHICH THE SEIZED ASSET OR DOCUMENT IS FOUND UNLESS PROVED CONTRARY. THERE IS NO CONCLUSIV E PROOF THAT THE PAPERS OR THE TRANSACTIONS RECORDED THEREON DO NOT PERTAIN TO THE APPELLANT AND THERE IS NOTHING TO PROVE THAT TH E TRANSACTIONS ARE OF NIRMA LTD. ONLY AND NOT OF THE APPELLANT. (B) THE ASSESSING OFFICER HIMSELF HAS ADMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE STATEMENTS OF SHRI J.O. SHAH AND SHRI JITUBHAI PATEL PARTNER OF THE GAYATRI BLDG. MATERIAL SUPPLIERS WERE RECORDED. IN THE STATEMENT SHRI J.O . SHAH ACCEPTED THAT THE NOTINGS REPRESENT PAYMENTS. HE AL SO RECORDED THE NOTINGS ON THESE PAGES AND ACCEPTED THAT WHEREV ER THE NOTINGS ARE WITH DECIMAL POINTS OR CARRY THE SPECIF IC NARRATION LACS THE SAME REPRESENT PAYMENTS MADE IN RS. LACS AND WHEREVER THERE IS NO NARRATION AND ALSO NO DECIMAL POINTS ARE USED THE NOTINGS REPRESENT PAYMENTS MADE IN THOUSAN DS. WITH REGARD TO THESE TRANSACTIONS IT WAS EXPLAINED BY S HRI J. O. SHAH THAT (I) THE TRANSACTIONS NOTED ON THE VISITING CAR DS PERTAINED TO A PROPOSED LAND DEAL WITH SHRI JITUBHAI PATEL OF GAYA TRI MATERIAL SUPPLIERS AND THE PAYMENTS OF RS.25 33 000 WERE MAD E AS NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 10 ADVANCES WHICH WERE INCORPORATED IN THE BOOKS OF AC COUNTS OF SHRI SHAH FOR THE BLOCK PERIOD. (II) THE TRANSACTIO NS NOTED AGAINST THE NAME AMAR SHAH PERTAINED TO A PROPOSED DEAL FOR FLAT PAYMENT OF RS.13 50 000 WERE MADE AS ADVANCES WHIC H WERE INCORPORATED IN THE BOOKS OF ACCOUNTS PREPARED BY S HRI SHAH FOR THE BLOCK PERIOD AND (III) OTHER MISCELLANEOUS NOT INGS PERTAINED TO ADVANCES OF RS.25 000/- AND RS.17 000/- GIVEN TO VARIOUS PERSONS. THUS IN THE STATEMENTS RECORDED U/S. 131 T HESE PAYMENTS HAVE BEEN ADMITTED BY SHRI J. O. SHAH AS M ATERIAL TRANSACTIONS PERTAINING TO HIM WITH REGARD TO PURCH ASE OF LAND/FLAT. (C ) SIMPLY BECAUSE SHRI J. O. SHAH HAPPENS TO BE P URCHASE MANAGER OF NIRMA LTD. AND GAYATRI BUILDING MATERIAL SUPPLIERS IS ONE OF THE REGULAR SUPPLIERS OF NIRMA LTD. DOES NOT MEAN THAT THE APPELLANT CANNOT HAVE ANY PERSONAL; TRANSACTION WIT H SUPPLIER OF THE COMPANY. IN FACT THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY MATERIAL EVIDENCE TO PROVE THAT THE TRANSACTION S PERTAIN TO NIRMA LTD. ON THE CONTRARY THE STATEMENTS RECORDED AND EXPLANATION GIVEN BY SHRI J. O. SHAH AND SHRI JITUB HAI PATEL LEADS AS TO THE CONCLUSION THAT THE TRANSACTIONS B ELONGED TO THE APPELLANT. (D) THE APPELLANT HIMSELF HAS DISCLOSED THESE TRANS ACTIONS AS UNDISCLOSED INCOME IN THE RETURN OF INCOME FOR TH E BLOCK PERIOD AND THERE IS APPARENTLY NO REASON FOR THE APPELLANT TO OWN UP SOMEONE ELSES INCOME AS THE RATE OF TAX APPLICABLE IS THE SAME. 18. WE HAVE HEARD THE PARTIES CAREFULLY AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FO R INTERFERENCE IN THE ORDER OF THE LD. C.I.T.(A). REASONS ARE (I) THAT NO EVIDENCE IS FOUND IN THE SEARCH SO AS TO SHOW THAT THE TRANSACTION WAS THAT OF NIRMA LTD. THE INFERENCE HAVE BEEN DRAWN MERELY BY PRESUMPTION AND SURMISES. (II) THER E IS NO MATERIAL TO CONTRADICT THE STATEMENT OF THE ASSESSEE AND TO BEL IEVE THAT INCOME DID NOT BELONG TO HIM. (III) WHETHER INCOME WOULD PERTAIN T O NIRMA LTD. OR NOT CAN ONLY BE DECIDED IN THE CASE OF NIRMA LTD. IN CASE IT IS HELD THAT INCOME BELONGED TO NIRMA LTD. THEN A RECTIFICATION CAN BE CARRIED OUT IN THE CASE OF THE ASSESSEE. (IV) SIMPLY BECAUSE THE ASSESSEE IS A PURCHASE MANAGER AND M/S. GAYATRI BUILDING MATERIAL SUPPLIERS IS A REGUL AR SUPPLIER TO NIRMA LTD IT NO.IT(SS)325-321/A/2004 BLOCK PERIOD 1.4.95 TO 27.9.01 11 CANNOT BE INFERRED THAT TRANSACTION RECORDED BY SHR I J.O. SHAH PERTAINED TO NIRMA LTD. THERE HAS TO BE COGENT MATERIAL TO LINK NIRMA LTD. WITH THE TRANSACTIONS FOUND ON THE DOCUMENTS RECOVERED FROM THE PREMISES OF THE ASSESSEE. 19. AS A RESULT WE PARTLY CONFIRM THE ORDER O F THE LD. C.I.T.(A) AND PARTLY ALLOW THE APPEAL FILED BY THE ASSESSEE WHEREAS DISM ISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN OPEN COURT ON 23 /7/2010. SD/- SD/- (MAHAVIR SINGH) (D. C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER. AHMEDABAD. DATED: 23 /7 /2010. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.RE GISTRAR ITAT AHMEDABAD.