SHRI KIRAN KANTILAL CHOKHSI, Baroda v. THE DY.CIT.,CENT.CIR-1,, Baroda

ITSSA 351/AHD/2003 | misc
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 35120516 RSA 2003
Assessee PAN ABDPC2026A
Bench Ahmedabad
Appeal Number ITSSA 351/AHD/2003
Duration Of Justice 7 year(s) 3 month(s) 15 day(s)
Appellant SHRI KIRAN KANTILAL CHOKHSI, Baroda
Respondent THE DY.CIT.,CENT.CIR-1,, Baroda
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 07-01-2011
Date Of Final Hearing 28-12-2010
Next Hearing Date 28-12-2010
Assessment Year misc
Appeal Filed On 22-09-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI MUKUL KUMAR SHRAWAT J.M. AND HON'BLE SHRI D.C. AGRAWAL A.M.) I.T.(S.S.)A. NO. 349/AHD./2003 ASSESSMENT YEAR : BLOCK PERIOD 1.4.1989 TO 14.12.19 99 SHRI RATILAL KHIMCHAND CHOKSHI BARODA -VS.- DE PUTY COMMISSIONER OF INCOME TAX (PAN : ABDPC 2026 A) CENTRAL CIRCLE-1 B ARODA (APPELLANT) (RESPONDENT) & I.T.(S.S.)A. NO. 350/AHD./2003 ASSESSMENT YEAR : BLOCK PERIOD 1.4.1989 TO 14.12.19 99 SHRI KANTILAL KHIMCHAND CHOKSHI BARODA -VS.- D EPUTY COMMISSIONER OF INCOME TAX (PAN : ABDPC 8026 A) CENTRAL CIRCLE-1 BARODA (APPELLANT) (RESPONDENT ) & I.T.(S.S.)A. NO. 351/AHD./2003 ASSESSMENT YEAR : BLOCK PERIOD 1.4.1989 TO 14.12.19 99 SHRI KIRAN KANTILAL CHOKSHI BARODA -VS.- DEPUTY COMMISSIONER OF INCOME TAX (PAN : ABDPC 8025 D) CENTRAL CIRCLE-1 B ARODA (APPELLANT) (RESPONDENT) ASSESSEES BY : SHRI S.N. SOPARKAR SR. A.R. DEPARTMENT BY : SHRI S.R. MALIK D.R. O R D E R PER SHRI D.C. AGRAWAL ACCOUNTANT MEMBER : THESE THREE APPEALS FILED BY THE DIFFERENT ASSESSE ES INVOLVED COMMON ISSUES ARGUED BY LD. COMMON REPRESENTATIVE THEREFORE WE HAVE DECID ED TO DISPOSE OF THESE APPEALS BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN IT(SS)A. NO. 349/AHD/2003 THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS :- (1) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE ADD ITION OF RS.1 51 367/- BEING INVESTMENT IN SHARES TO THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE. (2) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE ADD ITION OF RS.2 00 000/- BEING THE CASH FOUND AND SEIZED DURING THE COURSE A ND CONSIDERED UNDISCLOSED INCOME BY THE ASSESSING OFFICER. 2 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 (3) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE ADD ITION OF RS.40 000/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED LOAN GIVEN B Y MRS. TARABEN WIFE OF THE APPELLANT TO SHRI BAKABHAI A. JOSHI. (4) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE OBS ERVATION OF THE ASSESSING OFFICER THAT YOUR APPELLANT HAD EARNED PROFIT OF RS .75 683/- ON SALE OF SHARE PROFIT OF RS.31 117/- ON THE ALLEGED UNACCOUNTED TR ANSACTION AND PROFIT OF RS.52 825/- ON THE ALLEGED UNACCOUNTED SALE OF SILV ER. (5) IT IS PRAYED THAT THE ADDITIONS CONFIRMED ABOVE BE DELETED. (6) YOUR APPELLANT CRAVES LEAVE TO ADD ALTER OR AM END ANY OF THE GROUND MENTIONED ABOVE. 3. IN IT(SS)A. NO. 350/AHD/2003 THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS :- (1) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE ADD ITION OF RS.1 73 040/- BEING INVESTMENT IN SHARES TO THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE. (2) THE LEARNED CIT(A.) ERRED IN HOLDING THAT THE I NVESTMENT IN BANK ACCOUNT OFRS.60 738/- IS THE UNACCOUNTED INCOME OF YOUR APP ELLANT AND FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.60 738/- ON THE AC COUNT. (3) IT IS PRAYED THAT THE ADDITION CONFIRMED AS PER GROUND NO. 1 & 2 ABOVE BE DELETED. (4) YOUR APPELLANT CRAVES LEAVE TO ADD ALTER OR AM END ANY OF THE GROUND MENTIONED ABOVE. 4. IN IT(SS)A. NO. 351/AHD/2003 THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS :- (1) THE LEARNED CIT(A.) ERRED IN CONFIRMING THE ADD ITION OF RS.76 398/- BEING INVESTMENT IN SHARES TO THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE. (2) THE LEARNED CIT(A.) ERRED IN HOLDING THAT THE I NVESTMENT IN BANK ACCOUNT OF RS.1 45 315/- IS THE UNACCOUNTED INCOME OF YOUR APPELLANT AND FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.1 45 315/- O N THE ACCOUNT. (3) IT IS PRAYED THAT THE ADDITION CONFIRMED AS PER GROUND NO. 1 & 2 ABOVE BE DELETED. (4) YOUR APPELLANT CRAVES LEAVE TO ADD ALTER OR AM END ANY OF THE GROUND MENTIONED ABOVE. 3 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 5. FIRST WE TAKE UP THE CASE OF SHRI KIRAN KANTILA L CHOKSHI IN IT(SS)A. NO. 351/AHD/2003 . THE FACTS OF THE ENTIRE GROUP OF THE CASES IS THA T SEARCH UNDER SECTION 132 OF THE AC T WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIA L PREMISES OF VARIOUS MEMBERS IN THE GROUP ON 14.12.1999. DURING THE COURSE OF SEARCH VARIOUS LO OSE PAPERS BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE FOUND AND SEIZED. IN ADDITION VARIO US ASSETS LIKE HOUSEHOLD ARTICLES SHARES GOLD ORNAMENTS ETC. WERE ALSO FOUND AND PARTLY THEY WER E SEIZED. IN THE BLOCK RETURN THE ASSESSEE DECLARED UNDISCLOSED INCOME OF RS.2 74 379/- WHICH COMPRISED OF THE FOLLOWING ASSETS :- A.Y. AMOUNT OF UNDISCLOSED INCOME (RS.) REMARKS 1993-94 11 200 INVESTMENT IN SHARES FOUND DURING THE COURSE OF SEARCH 1994-95 18 000 -DO- 1995-96 10 000 -DO- 1996-97 21 160 INVESTMENT IN FIXED DEPOSITS RS.5 300/- AND SHARES OF RS.15 860/-. 1997-98 5 583 INVESTMENT IN FIXED DEPOSITS RS. 5 000/- AND INTEREST RS.583/-. 1998-99 1 16 133 INVESTMENT IN KISAN VIKAS PATRA I NDIRA VIKAS PATRA AND INTEREST ON FIXED DEPOSITS. 1999-2000 38 483 INVESTMENT IN KISAN VIKAS PATRA FIXED DEPOSITS SHARES AND INTEREST ON UNDISCLOSED FIXED DEPOSITS ETC. AND INTEREST ON FIXED DEPOSITS ETC. 2000-01 (UPTO THE DATE OF SEARCH) 53 320 INVESTMENT IN KISAN VIKAS PATRA FIXED DE POSITS & SHARES AND INTEREST ON UNDISCLOSED FIXED DEPOSITS KISAN VIKAS PATRA ETC. TOTAL 2 74 379 THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE UN DISCLOSED INCOME DECLARED BY THE ASSESSEE IN THE BLOCK RETURN. HE IN ADDITION PROPOSED FOLLOWING ADDITIONS IN THE UNDISCLOSED INCOME DECLARED:- UNDISCLOSED SHARE INVESTMENT AS DISCUSSED IN PARA NO. 4 OF HIS ORDER RS. 76 398/- UNDISCLOSED INCOME ON SHARES AS DISCUSSED IN PARA NO. 5 OF HIS ORDER RS. 38 199/- UNEXPLAINED INVESTMENT IN BANK ACCOUNT AS DISCUSSED IN PARA NO. 6 OF HIS ORDER RS.1 45 315/- 4 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 THIS RESULTED IN ASSESSMENT AT RS.5 34 291/-. THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ADDITION OF RS.76 398/- AND OF RS.1 45 315/- AND DELETED THE OTHER ADDITION OF RS.38 199/-. THE REVENUE IS NOT IN APPE AL AGAINST THE RELIEF GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHEREAS THE A SSESSEE HAS CHALLENGED THE SUSTAINING OF OTHER TWO ADDITIONS AS PER GROUNDS ABOVE. (I) UNDISCLOSED SHARE INVESTMENT :- THE FACTS RELATING TO THIS ISSUE ARE THAT DURING THE COURSE OF SEARCH INCOME-TAX AUTHORITIES FOUND A RE GISTER WHICH CONTAINED THE INVESTMENT IN SHARES BY THE FAMILY MEMBERS INCLUDIN G THE PRESENT ASSESSEE. THE TOTAL INVESTMENT AS PER REGISTER WAS FOUND AT RS.9 15 645/- WHEREAS IRRESPECTIVE ASSESSEES HAD DECLARED LESSER AMOUNT IN THE BLOCK R ETURN. THE DETAILS OF THE INVESTMENT FOUND AS PER REGISTER A/7 SEIZED IN THE SEARCH AND THE AMOUNT OF UNDISCLOSED INCOME OFFERED IN THE BLOCK RETURN ARE AS UNDER :- SL. NO. NAME OF THE ASSESSEE INVESTMENT VALUE OF AS PER REGISTER A/7 VALUE OFFERED BY ASSESSEE IN BLOCK ROI DIFFERENCE IN INVESTMENT 1. KIRAN K. CHOKSHI & KALPANA RS.1 31 958/- RS. 55 560/- RS. 76 398/- 2. SHAILESH K. CHOKSHI & GOPI CHOKSHI RS.4 36 370/- RS.1 37 215/- RS.2 99 155/- 3. KANTILAL K. CHOKSHI RANJANABEN RS.1 95 950/- RS. 22 910/- RS.1 73 040/- 4. RATILAL K. CHOKSHI TARABEN RS.1 51 367/- NIL RS.1 51 367/- IN RESPONSE TO SHOW-CAUSE NOTICE AS TO WHY NOT THE DIFFERENCE IN THE INVESTMENT AS FOUND FROM THE SEIZED REGISTER AND AS OFFERED IN THE BLOCK RET URN BE NOT TAXED THE ASSESSEE FURNISHED THE FOLLOWING REPLY VIDE HIS LETTER DATED 21.12.2001 :- AT POINT NO. 11 YOU HAVE ASKED TO SHOW-CAUSE AS T O WHY THE INVESTMENT IN SHARES MADE AS PER ANNEXURE A7 BE NOT ASKED. IN THIS REGARD IT IS SUBMITTED THAT THE SHARES FOUND DURING THE COURSE O F SEARCH OUT OF THESE INVESTMENTS HAVE BEEN DISCLOSED IN THE BLOCK RETURN OF THE GROUP. REGARDING THE BALANCE INVESTMENTS IT IS REITERATED THAT THE SAME HAS BEEN DISPOSE OFF AND THE PROCEEDS HAVE BEEN INVESTED IN VARIOUS ASSETS FOUND AND DISCLOSED IN THE BLOCK RETURN. THESE PROCEEDS H AVE ALSO BEEN INVESTED IN THE INVESTMENT MADE FOR THE ALLEGED UNACCOUNTED SALES AND HENCE NO 5 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 SEPARATE ADDITION BE MADE IN RESPECT OF THESE ALLEG ED SHARES. IT IS FURTHER SUBMITTED THAT THE SHARES HAVE BEEN INVESTED OUT OF THE BANK ACCOUNTS AND SINCE IT IS PROPOSED TO ADD THE PEAK DEPOSITS IN TH E BANK ACCOUNT NO SEPARATE ADDITION CAN BE MADE IN RESPECT OF THESE I NVESTMENTS. THE ASSESSING OFFICER WAS NOT SATISFIED AS ACCORDI NG TO HIM INVESTMENT REFLECTED FROM THE REGISTER IS TOTALLY UNDISCLOSED AND REPRESENTED UNA CCOUNTED INCOME. HE ACCORDINGLY TAXED THE DIFFERENCE WHICH IN THE CASE OF THE ASSESSEE WAS WORKED OUT AT RS.76 398/- AS ABOVE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOLLOW ING HIS ORDER IN THE CASE OF KANTILAL K. CHOKSHI CONFIRMED THE ADDITION. IN THAT CASE THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS HELD AS UNDER :- 4.4. THE SUBMISSION OF THE APPELLANT AND THE REASO NING OF THE ASSESSING OFFICER IS DULY CONSIDERED. THIS IS AN UN DISPUTED FACT THAT IN REGISTER A7 THE TOTAL INVESTMENTS IN THE NAME OF T HE APPELLANT HAVE BEEN RECORDED AT RS.1 95 950/- WHICH ARE ADMITTEDLY UNAC COUNTED FOR AND OUT OF IT THE APPELLANT DISCLOSED IN THE BLOCK RETURN ONLY RS.22 910/- FOR THE REASON THAT THE SHARES OF THE VALUE OF RS.22 910/- WERE PHYSICALLY FOUND. FOR THE DIFFERENCE OF RS.1 73 040/- THE APPELLANT EXPLAINED THAT IT HAS BEEN SOLD AWAY AND THE SALE PROCEEDS HAVE BEEN INVE STED IN THE HOUSEHOLD ARTICLES FOUND DURING THE SEARCH. IN THE APPELLATE PROCEEDINGS THE APPELLANT WAS REQUESTED TO SUBMIT A CASH FLOW STATEMENT WHICH COULD EXPLAIN THE CONTENTION OF TH E APPELLANT THAT THE SALE PROCEEDS OF THE SHARES HAVE BEEN INVESTED IN T HE HOUSEHOLD ARTICLES. BEFORE ME HE EXPRESSED HIS INABILITY TO PREPARE A CASH FLOW STATEMENT. IT IS THE APPELLANTS CASE THAT THE SHARES RECORDED IN A7 HAVE BEEN SOLD AWAY THE SALE PROCEEDS HAVE BEEN INVESTED IN HOUSE HOLD ARTICLES. THEREFORE IT IS THE DUTY OF THE APPELLANT TO SUBST ANTIATE THE CLAIM. IN ABSENCE OF THE EVIDENCE IN MY VIEW THE ASSESSING OFFICER IS RIGHT IN ADDING THE ENTIRE INVESTMENT OF RS.1 95 950/- IN TH E HANDS OF THE APPELLANT. THE ARGUMENT OF THE APPELLANT THAT SINCE THESE SHARES WAS NOT PHYSICALLY FOUND THEREFORE IT HAS TO BE PRESUMED T HAT IT HAS BEEN SOLD AWAY IS MERELY A STATEMENT. THESE SHARES MIGHT HAV E BEEN KEPT BY THE ASSESSEE SOMEWHERE ELSE WHICH HAS NOT BEEN SEARCHE D. HOWEVER IN MY VIEW IN VIEW OF THE FACTS AND CIRCUMSTANCES THE C ONCLUSION OF THE ASSESSING OFFICER APPEARS TO BE IN ORDER. IN VIEW O F THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.1 73 040/- IS THUS CONFIRMED. THE GIST OF THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS THAT THE ASSESSEE FAILED TO PREPARE A CASH FLOW STATEMENT OR TO PROV E THAT THE SHARES HAVE BEEN SOLD OR THAT THE SALE PROCEEDS HAVE BEEN INVESTED IN HOUSEHOLD ARTICLES. 6 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 6. BEFORE US THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IF SHARES ARE NOT FOUND PHYSICALLY DURING THE COURSE OF THE SEARC H THEN IT IS PRESUMED THAT THEY ARE SOLD AND THE SALE PROCEEDS ARE INVESTED IN OTHER ASSETS FOUN D DURING THE COURSE OF SEARCH. WHATEVER SHARES THE ASSESSEE HAD IN POSSESSION ARE FOUND DURING THE COURSE OF SEARCH AND THERE IS NO REASON TO BELIEVE THAT THEY ARE KEPT ELSEWHERE AS HELD BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). TELESCOPING EFFECT SHOULD BE GIVEN AND D OUBLE ADDITION SHOULD NOT BE MADE. ONCE THE ASSETS ARE FOUND AND DECLARATION OF UNDISCLOSED INC OME HAS BEEN MADE IN THE RETURN OF INCOME ON THE BASIS OF ASSETS SO FOUND THEN THERE IS NO SC OPE FOR MAKING OTHER ADDITION ON THE BASIS OF DOCUMENTS IN RESPECT OF WHICH ASSETS ARE NOT FOUND. 7. AGAINST THIS THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE SUBMITTED THAT THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH REFLEC TED INVESTMENT IN SHARES IN THE CASE OF THE ASSESSEE TO THE EXTENT OF RS.1 31 958/-.IT IS LEGA LLY NOT CORRECT TO PRESUME THAT PART OF ASSETS AR E SOLD AND INVESTED IN SOME OTHER ASSETS. THE ASSESSE E HAS FAILED TO PREPARE A CASH FLOW STATEMENT SHOWING THE DIFFERENCE BETWEEN INVESTMENT AS PER RE GISTER AND AS PER SHARES PHYSICALLY FOUND WERE SOLD AND SALE PROCEEDS WERE INVESTED IN OTHER ITEMS SUCH AS KISAN VIKAS PATRAS FIXED DEPOSITS ETC. IN ABSENCE OF ANY SUPPORTING EVIDENC E THE PRESUMPTION CANNOT BE DRAWN AND FURTHER THE POSSESSION RAISED UNDER SECTION 132(4) CANNOT BE NULLIFIED MERELY ON THE BASIS OF THE STATEMENT OF THE ASSESSEE THAT PART OF THE SHARES A RE SOLD. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THE ADDITION OF RS.76 398/- NEEDS TO BE CONFIRMED. THE REASONS ARE THAT A REGISTER NAMED A/7 IS FOUND DURING THE COURSE OF SE ARCH. IT REFLECTED THE DETAILS OF SHARES SUCH AS NAME OF HOLDER DATE OF INVESTMENT AMOUNT OF INVES TMENT/ FACE VALUE DISTINCTIVE NOS. AND WHETHER THOSE SHARES ARE DEMATIZED OR NOT. WHEN ASS ESSING OFFICER HAD CALLED FOR AN EXPLANATION THEN THE ASSESSEE MERELY STATED THAT PART OF THE SH ARES HAD BEEN DISPOSED OF. IT IS NOT SUFFICIENT TO DISCHARGE THE ONUS LYING ON THE ASSESSEE. THE ASSES SEE HAS TO FURTHER GIVE SOME CREDIBLE EVIDENCE IN THE FORM OF DEMAT STATEMENT FROM THE BROKER OR O THER EVIDENCE OF SALES OF THE SHARES AND ALSO WAS REQUIRED TO PREPARE CASH FLOW STATEMENT SHOWING HOW THE SALE PROCEEDS HAVE BEEN INVESTED IN ACQUISITION OF OTHER ASSETS AND THEY WERE NOT SP ENT AWAY WITHOUT ACQUIRING ANY ASSETS. THE 7 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 PRESUMPTION LAID DOWN UNDER SECTION 132(4) IS DEFIN ITELY REBUTTABLE I.E. AS PER THAT SECTION CONTENTS OF THE DOCUMENTS FOUND IN THE SEARCH IS PR ESUMED TO BE TRUE. SUCH PRESUMPTION CAN BE REBUTTED BY THE ASSESSEE BY LAYING DOWN EVIDENCE. S INCE IN THE SEARCH NO EVIDENCE OF SALE OF SHARES WAS FOUND AND THERE WERE NO CORRELATION BETW EEN RECEIPTS OF ANY SALE PROCEEDS AND INVESTMENT IN SUBSEQUENT ASSETS AND ALSO THE ASS ESSEE FAILED TO PROVIDE ANY EVIDENCE IN SUPPORT OF ITS CLAIM TELESCOPING EFFECT CANNOT BE GIVEN. THOUGH IT MIGHT APPEAR PROBABLE THAT IT COULD HAPPEN THAT THE ASSESSEE MIGHT HAVE DISPOSED OF THE SHARES AS THEY WERE NOT FOUND IN THE SEARCH BUT THERE ARE TWO EQUAL PROBABILITIES ONE IS THAT THE ASSESSEE OR THE FAMILY MEMBERS WOULD HAVE KEPT SHARES ELSEWHERE OR IF THEY WERE SOLD THEN SAL E PROCEEDS MIGHT HAVE BEEN SQUANDERED AWAY OR SPENT ELSEWHERE OR THEY MAY BE INVESTED IN OTHER ASSET. WHEN SUCH PROBABILITIES ARE EQUAL THEN PRESUMPTION RAISED UNDER SECTION 132(4) CANNOT BE SAID TO BE DISCHARGED. ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. A.R. AND THEREFORE WE CONFIRM THE ADDITION. (II) THE OTHER ISSUE RELATES TO ADDITION IN RESPEC T OF DEPOSIT IN BANK ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER FOUND FOLLOWING RECURRING DEPOSITS IN VARIOUS BANK ACCOUNTS :- KALPANABEN K. CHOKSHI BANK OF INDIA RECURRING DEPOS IT RS.2 100/- - DO - BANK OF INDIA RECURRING DEPOSITS RS.15 165/- [PEAK DATED 3.12.1999] K.K. CHOKSHI SHREE CO-OP. BANK RECURRING DEPOSIT RS.30 500/- - DO - -DO - RS.31 000/- PAYAL K. CHOKSHI SWAMI NARAYAN CO-OP. BANK SAVINGS BANK ACCOUNT RS.30 000/- [PEAK DATED 20.2.1995] KRUPA K. CHOKSHI BANK OF BARODA SAVING BANK RS.36 5 50/- [PEAK DATED 20.11.1999] TOTAL INVESTMENT RS.1 45 315/- THESE INVESTMENTS WERE MADE IN THE ACCOUNTS OF VARI OUS FAMILY MEMBERS. THEY WERE ADMITTED TO BE UNACCOUNTED AND UNDECLARED BANK ACCOUNTS AND THE Y REPRESENTED UNACCOUNTED INVESTMENT OF THE ASSESSEE. THE ASSESSEE CLAIMED THAT CREDIT OF S ALE OF SHARES BE GIVEN IN RESPECT OF SUCH PEAK DEPOSITS. THE ASSESSING OFFICER HELD THAT NO EVIDEN CE HAS BEEN BROUGHT ON RECORD TO IDENTIFY THE NEXUS BETWEEN SOURCE FROM WHICH CREDIT HAS BEEN CLA IMED. HE ACCORDINGLY MADE THE ADDITION OF RS.1 45 315/-. THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE ADDITION BY 8 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 FOLLOWING HIS ORDER IN THE CASE OF KANTILAL K. CHOK SHI. IN THAT CASE ALSO THE ASSESSING OFFICER HAS FOUND SIMILAR DEPOSITS IN THE BANK ACCOUNT IN T HE NAMES OF FAMILY MEMBERS. HE HAD DETERMINED PEAK THEREIN AND ADDED THE TOTAL OF THE PEAKS IN THE TWO BANK ACCOUNTS AMOUNTING TO RS.60 738/-. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY HOLDING AS UNDER :- 6.2. BEFORE ME THE APPELLANT SUBMITTED THAT ON TH E DAY OF SEARCH THE BALANCE IN THE SAID ACCOUNTS WERE NOMINAL AND AMOUN TS ALLEGED TO HAVE BEEN DEPOSITED HAVE BEEN WITHDRAWN AND INVESTED IN VARIOUS UNACCOUNTED ASSETS FOUND DURING THE COURSE OF SEARC H. WITH REGARD TO THE EVIDENCE TO PROVE THE CONTENTION HE SUBMITTED THAT THE DEPOSITS IN THE BANK ACCOUNTS ARE PRIOR TO THE DATE OF INVESTMENT A ND THEREFORE THE WITHDRAWALS SUBSEQUENTLY CAN BE CLAIMED AS SET OFF AGAINST UNDISCLOSED INCOME. FOR THIS PURPOSE HE PLACED RELIANCE ON THE DECISION OF HON'BLE COCHIN TRIBUNAL IN THE CASE OF JOSE BROTHERS JEWELL ERY VS.- ACIT 67 TTJ 22 WHEREIN IT HAS BEEN HELD THAT DIFFERENCE B ETWEEN THE PEAK AMOUNT AND ASSESSEES INVESTMENT AND BALANCE AVAILA BLE ON THE LAST DATE OF THE PEAK PERIOD WAS AVAILABLE WITH THE ASSESSEE FOR MAKING SET OFF AND THEREFORE SET OFF THEREOF SHOULD BE ALLOWED AGAINS T THE AMOUNT OF UNEXPLAINED INVESTMENTS. HE REITERATED THAT THE BA LANCE IN THESE BANK ACCOUNTS WERE NEGLIGIBLE AND THEREFORE SUCH SET O FF SHOULD BE ALLOWED TO THE APPELLANT. THE SUBMISSION OF THE APPELLANT IS D ULY CONSIDERED. AS CAN BE SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSIN G OFFICER HAD ASKED THE EVIDENCE TO IDENTIFY THE NEXUS BETWEEN SOURCE F ROM WHICH CREDIT IS BEING CLAIMED. THE APPELLANT IN THE ASSESSMENT PROC EEDINGS AND ALSO IN THE APPELLATE PROCEEDINGS TO ESTABLISH THE SAME TH EREFORE THE ARGUMENTS OF THE APPELLANT ARE NOT APPLICABLE. IN VIEW OF THI S THE ADDITION OF RS.60 738/- IS CONFIRMED. THE GIST OF THE REASONING GIVEN BY THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) IS THAT THE ASSESSEE FAILED TO GIVE EVIDENCE TO IDENTIFY TH E NEXUS BETWEEN THE SOURCES FROM WHICH CREDIT IS BEING CLAIMED. 9. AGAINST THIS THE LD. A.R. FOR THE ASSESSEE SUBM ITTED THAT THERE IS CLEAR EVIDENCE OF WITHDRAWAL OF MONEY FROM THE BANK ACCOUNT OR THE PA YMENTS THEREFROM RESULTING IN REDUCING BALANCE. IT WAS NOT A CASE THAT THIS AMOUNT REMAINE D STATIC IN THE BANK ACCOUNT. THUS THE WITHDRAWALS MADE FROM THE BANK ACCOUNT WERE INVESTE D IN VARIOUS ASSETS AGAINST WHICH THE ASSESSEE HAS MADE DISCLOSURE IN THE BLOCK RETURN. T HEREFORE TELESCOPING EFFECT SHOULD BE GIVEN. 9 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 10. ON THE OTHER HAND THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVIDE ANY CASH FLOW STATEMENT AND ALSO FAILED TO GIVE ANY EVIDENCE TO SHOW THE NEXUS BETWEEN WITHDRAWAL OF MONEY FROM THE BANK ACCOUNT AND INVESTMENT INTO THE FIXED DEPOSITS SHARES OR KISAN VIKAS PATRAS AGAINST WHICH DISCLOSURE HAS BEEN MADE IN T HE BLOCK RETURN. IN FACT PART OF THE WITHDRAWAL MUST HAVE GONE INTO HOUSEHOLD EXPENDITURE AND OTHER INVESTMENTS NOT ON RECORD THEREFORE IT CANNOT BE PRESUMED THAT WITHDRAWALS FROM THE BANK A CCOUNTS WERE AVAILABLE FOR MAKING INVESTMENT IN THESE SHARES KVPS F.DS AGAINST WHI CH DISCLOSURE OF RS.2 74 379/- IS MADE. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERF ERENCE IN THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE REASONS ARE THAT ONCE INV ESTMENT IN BANK ACCOUNT IS FOUND AND ASSESSING OFFICER HAS ONLY TAKEN UP THE PEAK AS UND ISCLOSED DEPOSIT THEN IT IS NOT THE CASE THAT WITHDRAWALS FROM THE BANK ACCOUNTS COULD HAVE BEEN INVESTED IN KISAN VIKAS PATRAS ETC. IN SUBSEQUENT YEARS AS PEAK WOULD MEAN THAT WITHDRAWA LS FROM THE BANK ARE AVAILABLE FOR REDEPOSIT. IT IS LEGALLY REQUIRED FOR THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH DEPOSITS. IF THE SOURCE OF SUCH DEPOSITS IS NOT EXPLAINED THEN THE ADDITION IN RESPECT THEREOF HAS TO BE MADE. NOW FOR CLAIMING THE BENEFIT OF TELESCOPING THE ONUS IS ON THE ASSESSEE TO SHOW THE NEXUS BETWEEN WITHDRAWALS FROM THE BANK ACCOUNTS AND INVESTMENTS IN KVPS./ FDS/ SHARES SUBSEQUENTLY. IF NO CREDIBLE EVIDENCE IS SUBMITTED BY THE ASSESSEE THEN ASSESSING OFFICER IS DUTY BOUND TO MAKE ADDITION. ACCORDINGLY WE CONFIRM THE ADDITION AS T HE ASSESSEE FAILED TO ESTABLISH THE NEXUS BETWEEN THE WITHDRAWALS FROM THE BANK ACCOUNT AND I NVESTMENTS IN ASSETS SUBSEQUENTLY. 12. AS A RESULT THE APPEAL BEING IT(SS)A. NO. 351 /AHD/2003 FILED BY THE ASSESSEE IS DISMISSED. 13. NOW WE TAKE UP THE CASE OF SHRI KANTILAL KHIMCH AND CHOKSHI IN IT(SS)A. NO. 350/AHD/2003 . IN THIS CASE THE ASSESSEE HAD MADE A TOTAL DISCLO SURE OF RS.11 36 140/- WHICH COMPRISED OF FOLLOWING ASSETS :- A.Y. NATURE OF INVESTMENT/ INCOME AMOUNT (RS.) 1993-94 INVESTMENT IN SHARES 3 300/- 10 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 1994-95 INVESTMENT IN SHARES 8 600/- 1995-96 INVESTMENT IN SHARES 7 760/- 1996-97 INVESTMENT IN SHARES 3 250/- 1997-98 INVESTMENT IN SHARES NIL 1998-99 INVESTMENT IN SHARES NIL 1999-2000 INVESTMENT IN SHARES NIL FOR THE PERIOD 1.4.99 TO 14.12.1999 VALUE OF GOLD VALUE OF HOUSEHOLD ARTICLES 9 74 330/- 1 38 900/- TOTAL UNDISCLOSED INCOME 11 36 140/- THE ASSESSING OFFICER PROPOSED FURTHER THREE ADDITI ONS AS UNDER :- UNDISCLOSED INVESTMENT IN SHARES AS DISCUSSED IN PARA NO. 4 OF HIS ORDER RS.1 73 040/- UNDISCLOSED PROFIT AS DISCUSSED IN PARA NO. 5 OF HIS ORDER RS. 86 520/- UNACCOUNTED INVESTMENT IN BANK ACCOUNT AS DISCUSSED IN PARA NO. 6 OF HIS ORDER RS. 60 738/- IT RESULTED INTO TOTAL UNDISCLOSED INCOME OF RS.14 56 438/-. ALL THE THREE ISSUES ARE IDENTICAL AS DISCUSSED IN THE CASE OF KIRAN KANTILAL CHOKSHI AS ABOVE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF RS.86 520/- WHEREAS HE CONFIRMED THE OTHER TWO ADDITIONS. 13.1. REGARDING ISSUE NO. 1 INVESTMENT IN SHARES AMOUNTING TO RS.1 73 040/- - AS PER REGISTER A-7 THE ASSESSEE WAS FOUND TO OWN SHARES WHEREIN I NVESTMENT AMOUNTING TO RS.1 95 950/- WAS MADE. AS AGAINST THIS THE ASSESSEE HAD DECLARED AN INVESTMENT OF RS.22 910/- IN THE BLOCK RETURN. WHEN ASKED TO EXPLAIN THE ASSESSEE FURNISHED THE S IMILAR REPLY AS GIVEN IN THE CASE OF KIRAN KANTILAL CHOKSHI THAT PART OF THE SHARES WAS DISPOS ED OF IN INVESTMENT IN ACQUISITION OF FRESH ASSETS. THE ASSESSING OFFICER WAS NOT SATISFIED AND MADE ADDITION OF THE DIFFERENCE AMOUNTING TO RS.1 73 040/-. THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) CONFIRMED THE ADDITION AS DISCUSSED ABOVE IN THE CASE OF SHRI KIRAN KANTILAL CHOKSHI. 14. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AU THORITIES BELOW ARGUMENTS OF LD. A.R. AND D.R. OF THE SAME AS IN THE CASE OF KIRAN KANTIL AL CHOKSHI. FOLLOWING OUR DECISION IN THAT 11 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 CASE WE HOLD THAT THERE IS NO REASON TO INTERFERE WITH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY THIS GROUND OF A SSESSEES APPEAL IS REJECTED. 15. THE NEXT ISSUE IS ABOUT DEPOSIT IN BANK ACCOUNT AMOUNTING TO RS.60 738/-. THE ASSESSING OFFICER HAD FOUND DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THAT THE ASSESSEE HAD MADE PEAK DEPOSITS IN BANK ACCOUNTS IN HIS NAME AND THE NAME OF THE FAMILY MEMBERS :- KANTILAL K. CHOKSHI SWAMI NARAYAN CO.OP. BANK SAVING ACCOUNT RS.26 020/- (PEAK ON 19.12.1994) RANJANBEN K. CHOKSHI BANK OF INDIA SAVINGS BANK DEPOSITS RS.34 718/- (PEAK DATED 1.12.1998) TOTAL INVESTMENT RS.60 738/- AS THE ASSESSEE FAILED TO ESTABLISH A NEXUS BETWEEN WITHDRAWAL FROM THE BANK ACCOUNT AND INVESTMENT IN OTHER ASSETS THE ASSESSING OFFICER M ADE THE ADDITION AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAME FOR THE REASONS GIVEN ABOVE IN THE CASE OF KIRAN KANTILAL CHOKSHI. 16. WE HAVE HEARD THE LD. A.R. AND D.R. FOR THE REA SONS GIVEN BY US IN THE CASE OF KIRAN KANTILAL CHOKSHI WE CONFIRM THE ADDITION. ACCORDIN GLY THIS GROUND OF ASSESSEE IS ALSO REJECTED. 17. IN THE RESULT THE APPEAL BEING IT(SS)A. NO. 35 0/AHD/2003 FILED BY THE ASSESSEE IS DISMISSED. 18. NOW WE TAKE UP THE APPEAL BEING IT(SS)A. NO. 349/AHD/2003 IN THE CASE OF SHRI RATILAL KHIMCHAND CHOKSHI. IN THIS CASE THE LD. A.R. DID NOT PRESS GROUND NO . 4 WHICH IS ACCORDINGLY REJECTED AS NOT PRESSED. 19. GROUND NO. 1 RELATES TO ADDITION IN RESPECT OF INVESTMENT IN SHARES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD F OUND THAT THE ASSESSEE HAD FILED BLOCK RETURN ON AN UNDISCLOSED INCOME OF RS.10 33 500/-. THE ASS ESSING OFFICER PROPOSED THE FOLLOWING THREE ADDITIONS :- UNDISCLOSED INVESTMENT IN SHARES AS DISCUSSED IN PARA NO. 4 RS.1 51 367/- UNEXPLAINED CASH AS DISCUSSED IN PARA NO.6 RS.2 00 000/- 12 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 UNEXPLAINED INVESTMENT AS DISCUSSED IN PARA NO.7 RS. 40 000/- ENTIRE UNDISCLOSED INCOME HAS BEEN SHOWN TO HAVE BE EN EARNED DURING THE PERIOD FROM 1.4.1999 TO 14.12.1999 AS REFLECTED FROM COMPUTATION OF INCO ME-SHEET FILED ON PAGE 3 OF THE PAPER BOOK. ON PAGE 9 BEING PART 3 OF THE RETURN IT HAS BEEN M ENTIONED THAT THIS UNDISCLOSED INCOME IS THE INVESTMENT IN THE PLOT OF LAND AT NIRMAL COOPERATIV E HOUSING SOCIETY MANJALPUR BARODA. 20. THE FIRST GROUND RELATES TO ADDITION OF RS.1 51 367/- BEING THE UNEXPLAINED INVESTMENT IN SHARES. THE ASSESSING OFFICER COMPARED THE INVESTME NT MADE BY THE ASSESSEE IN SHARES AS REFLECTED FROM REGISTER A/7 SEIZED DURING THE COURS E OF SEARCH AND INVESTMENT DECLARED BY THE ASSESSEE. IT WAS FOUND THAT THE ASSESSEE HAD MADE I NVESTMENT OF RS.1 51 367/- IN THE SHARES AS PER REGISTER A/7 BUT IT DID NOT DECLARE ANY INVESTMENT THEREIN IN THE BLOCK RETURN. THE ASSESSING OFFICER ACCORDINGLY MADE THE ENTIRE ADDITION. THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAME FOLLOWING HIS ORDER IN THE CASE OF KANTILAL K. CHOKSHI. 21. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ISSUE IS SIMILAR TO THE ONE DISCUSSED BY US IN THE CASE OF KIRAN KANTILAL CHOKSHI ABOVE. FOR THE REASONS MENTIONED THEREIN WE CONFIR M THE ADDITION AND REJECT THIS GROUND OF ASSESSEE. 22. GROUND NO.2 RELATES TO THE ADDITION OF RS.2 00 000/- BEING THE CASH FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE FACTS RELATING TO THIS GROUND IS THAT DURING THE COURSE OF SEARCH CASH OF RS.2 38 530/- WAS FOUND AND AFTER GIVING RE ASONABLE CREDIT FOR PAST SAVINGS CASH OF RS.2 00 000/- WAS SEIZED. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE ASSESSEE FURNISHED THE FOLLOWING EXPLANATION :- 'REGARDING CASH OF RS.2 00 000/-FOUND FROM THE RESI DENTIAL PREMISES OF RATILAL CHAKSHI IT IS REITERATED THAT THE AMOUNT RECEIVED R EPRESENTS NOTHING BUT THE SURPLUS REMAINING WITH HIM AFTER MEETING THE EXPENSES TOWAR DS PUBLICATION. THE LIST OF MEMBERS WHO CONTRIBUTED WOULD CLEARLY INDICATE THER E ARE SUBSTANTIAL MEMBERS WHO HOVE CLEARLY INDICATED THERE ARE SUBSTANTIAL ME MBERS WHO HAVE CONTRIBUTED AMOUNTS RANGING FROM 100 TO 500. THESE AMOUNTS ARE RECEIVED TOWARDS CONTRIBUTION FOR SUBSCRIPTION. THE EXPENSES TOWARDS PRINTING OF THE BOOKS AND OTHER PUBLICATION EXPENSES IS MET OUT OF THESE CONTRIBUTI ON AND BALANCE AMOUNT OF RS.2 00 000/- REPRESENTS THE AMOUNT LEFT AFTER MEET ING THE EXPENSES. IT IS VERY DIFFICULT IF NOT IMPOSSIBLE TO PRODUCE CONFIRMATION FROM THE MEMBERS AS THESE ARE LOCATED ALL OVER THE COUNTRY INCLUDING PLACES LIKE BARODA MUMBAI SURAT ETC. THE 13 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 PUBLICATION WAS STARTED AROUND 3-4 YEARS AGO HOWEVE R SINCE THE REGISTRATION OF THE SAME WAS REJECTED BY THE OFFICE OF REGISTRAR OF NEW SPAPERS FOR INDIA VIDE ITS INTIMATION NO. 3528/97 DID. 6/11/97 THE BANK ACCOUN TS AND OTHER ACCOUNTS NECESSARY COULD BE MAINTAINED AND HENCE WE ARE NOT IN POSITION TO PRODUCE ANY EVIDENCE FOR THE CASH FOUND DURING THE COURSE OF SE ARCH. THE LIST OF THE MEMBERS CLEARLY INDICATES THAT THERE ARE NUMEROUS PEOPLE WH O SUBSCRIBE TO THESE PUBLICATIONS AND TO PRODUCE CONFIRMATIONS FOR SUBSC RIPTION GIVEN IN THE PAST WOULD BE HIGHLY DIFFICULT. ASSUMING WITHOUT ADMITTING THAT THESE AMOUNT REPRES ENT UNEXPLAINED INVESTMENT IT IS ONCE AGAIN REITERATED THAT THE SAME HAS BEEN MAD E OUT OF THE PROFITS EARNED ON THE TRANSACTION ALLEGED TO HAVE BEEN UNRECORDED IN THE BOOKS AND HENCE NO FURTHER ADDITION CAN BE MADE IN RESPECT OF THE SAME.'' THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE EXP LANATION AS NO CONFIRMATION FROM THE MEMBERS WAS FOUND. THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) ALSO CONFIRMED THE SAME FOR THE SAME REASONS. 23. BEFORE US THE LD. A.R. FOR THE ASSESSEE ARGUED THAT THE ASSESSEE HAD BEEN RUNNING A MAGAZINE NAMED PATHEY FOR WHICH SUBSCRIPTIONS FROM VARIOUS MEMBERS WERE COLLECTED AND CASH SO FOUND REPRESENTED SUCH COLLECTION. IN SUPPORT OF THIS ARGUMENT THE LD. A.R. DREW OUR ATTENTION TO THE LIST OF MEMBERS WHO HAVE SUPPOSEDLY PAID TH E MONEY TO THE ASSESSEE. THE LD. A.R. ALSO DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE HA S MADE AN ATTEMPT TO GET THE MAGAZINE REGISTERED WITH THE APPROPRIATE AUTHORITIES BUT HO WEVER THE SAME COULD NOT BE REGISTERED AS THE TITLE WAS NOT ACCEPTED. 24. ON THE OTHER HAND THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY ACCOUNT IN RESPECT OF ALLEGED PUBLICATION OF THE MA GAZINE. IT HAS NOT ISSUED ANY RECEIPT TO ANY MEMBER AS NO RECEIPT BOOK HAS BEEN FOUND IN THE SE ARCH OR SUBMITTED DURING THE COURSE OF ASSESSMENT. THE ASSESSEE HAS NOT SHOWN HOW MUCH FUN DS SHE HAS COLLECTED HOW MUCH WAS SPENT AND WHY THEY WERE NOT DEPOSITED IN THE BANK ACCOUNT . THEREFORE THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND SATISFACTORY. ACCORDING TO THE LD. D. R. THE ASSESSEE MIGHT BE RUNNING THE PUBLICATION OF MAGAZINE BUT WHETHER THIS MONEY BELO NGED TO THE MAGAZINE SECTION IS NOT PROVED. 25. IN REJOINDER THE LD. A.R. SUBMITTED THAT IN TH E ALTERNATIVE TELESCOPING EFFECT SHOULD BE GIVEN AS THE ASSESSEE HAS MADE DISCLOSURE OF RS.10 33 500/-. 14 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 26. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE REASONS ARE THAT IF THE A SSESSEE IS RUNNING INDEPENDENTLY A MAGAZINE FOR THE BENEFIT OF JAIN COMMUNITY AND IT IS COLLECT ING SUBSCRIPTION FROM THEM THEN HE WAS SUPPOSED TO MAINTAIN BOOKS OF ACCOUNTS SEPARATELY RECORD THE RECEIPTS FROM THE SO-CALLED MEMBERS AND ALSO THE EXPENDITURE INCURRED FOR THE P URPOSE OF THAT MAGAZINE. FURTHER THE ASSESSEE IS SUPPOSED TO ISSUE RECEIPTS TO EACH MEMB ER WHO HAS PAID MONEY TO HIM. AT LEAST OFFICE COPY OF SUCH RECEIPTS SHOULD HAVE BEEN FOUND DURING THE COURSE OF SEARCH OR SHOULD HAVE BEEN PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING S. IN ADDITION TO CASH SOME OTHER DOCUMENTS SHOWING THE RECEIPT OF MONEY OR THE ACCOU NTS RELATING TO SUCH RECEIPTS SHOULD HAVE BEEN FOUND DURING THE COURSE OF THE SEARCH. SINCE I T WAS ONLY CASH WAS FOUND AND SUBSEQUENTLY THE ASSESSEE IS ATTRIBUTING SUCH CASH TO THE ALLEGE D RECEIPTS FROM THE MEMBERS FOR THE PURPOSE OF RUNNING THE MAGAZINE THE CLAIM CANNOT BE ACCEPTED IN ABSENCE OF CREDIBLE EVIDENCE. WE AGREE WITH THE LD. D.R. THAT THE ASSESSEE MIGHT BE PURSUI NG THE MAGAZINE BUT THE FACT THAT THE MONEY SO FOUND IN THE SEARCH BELONGED TO THAT PART OF THE AC TIVITY OF THE ASSESSEE IS NOT PROVED. SINCE EXPLANATION TO CASH FOUND DURING THE COURSE OF SEAR CH IS NOT FOUND SATISFACTORY THE ADDITION IS REQUIRED TO BE CONFIRMED. ACCORDINGLY WE REJECT TH IS GROUND OF ASSESSEE. 27. THE LAST GROUND RELATES TO ADDITION OF RS.40 00 0/-. DURING THE COURSE OF SEARCH CERTAIN LOOSE PAPERS WERE SEIZED. ANNEXURE A-35 THEREFROM R EVEALED THAT THE ASSESSEES WIFE SMT. TARABEN R. SHAH HAD GIVEN LOAN TO SHRI BAKABHAI A. JOSHI OF RS.40 000/-. THE ASSESSING OFFICER HAD ASKED TO EXPLAIN THE SOURCE OF THIS ADVANCE BY SMT. TARABEN R. SHAH BUT IN ABSENCE OF ANY CREDIBLE EVIDENCE AND SMT. TARABEN HAVING NO INDEPE NDENT SOURCE OF INCOME THE ASSESSING OFFICER MADE THE ADDITION. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION FOR THE SAME REASONS. 28. BEFORE US THE LD. A.R. FOR THE ASSESSEE SUBMIT TED THAT THE LOAN WAS GIVEN BY SMT. TARABEN AND NOT BY THE ASSESSEE. SMT. TARABEN HAD H ER OWN MONEY EVEN THOUGH SHE MIGHT NOT HAVE FILED THE RETURN OF INCOME. SHE WOULD SAVE OUT OF HER OWN PIN MONEY AND COULD HAVE ADVANCDE LOAN. SINCE THE ASSESSING OFFICER IS HOLDI NG SUCH ADVANCE OF LOAN AS BENAMI OF THE 15 IT(SS)A NOS. 349-AHD-2003 350-AHD-2003 & 351-AHD-2003 ASSESSEE THE ONUS IS ON HIM TO PROVE THAT THE CORP US FOR LOAN WAS GIVEN BY THE ASSESSEE OR THAT INTEREST IS COMING BACK TO THE ASSESSEE OR THAT DOC UMENTS WERE EXECUTED FOR AND ON BEHALF OF THE ASSESSEE. SINCE NO SUCH EFFORTS HAVE BEEN DONE BY T HE ASSESSING OFFICER THE ADDITION IS NOT CALLED FOR. 29. AGAINST THIS THE LD. D.R. SUPPORTED THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 30. AFTER HEARING THE PARTIES WE ARE OF THE CONSID ERED VIEW THAT THE ADDITION CANNOT BE MADE MERELY BY SAYING THAT SMT. TARABEN R. SHAH DID NOT HAVE ANY SOURCE OF INCOME. THE SUM OF RS.40 000/- IS NOT A BIG AMOUNT AND THAT LADY OF TH E FAMILY COULD HAVE SAVINGS TO THAT EXTENT. FURTHER WITHOUT PROVING THAT INITIAL CORPUS WAS ADV ANCED BY THE ASSESSEE IT CANNOT BE SAID THAT IT IS THE INCOME OF ASSESSEE. ACCORDINGLY WE DELETE T HIS ADDITION. RESULTANTLY THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 31. IN THE RESULT THE APPEALS BEING IT(SS)A. NO. 3 51/AHD/2003 IN THE CASE OF SHRI KIRAN KANTILAL CHOKSHI & IT(SS)A. NO. 350/AHD/2003 IN THE CASE OF SHRI KANTILAL KHIMCHAND CHOKSHI BOTH ARE DISMISSED WHEREAS THE APPEAL BEIN G IT(SS)A. NO. 349/AHD/2003 IN THE CASE OF SHRI RATILAL KHIMCHAND CHOKSHI IS PARTLY ALLOWED . THE ORDER WAS PRONOUNCED IN THE COURT ON 07.01.20 11 SD/- SD/- (MUKUL KUMAR SHRAWAT) (D.C . AGRAWAL) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED : 07 / 01 / 2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR ITAT AHMEDABAD LAHA/SR.P.S.