The ACIT, Circle-6,, Ahmedabad v. M/s. Gujwire Industries, Ahmedabad

ITSSA 60/AHD/2007 | misc
Pronouncement Date: 20-08-2010 | Result: Dismissed

Appeal Details

RSA Number 6020516 RSA 2007
Bench Ahmedabad
Appeal Number ITSSA 60/AHD/2007
Duration Of Justice 3 year(s) 4 month(s) 28 day(s)
Appellant The ACIT, Circle-6,, Ahmedabad
Respondent M/s. Gujwire Industries, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 20-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 20-08-2010
Date Of Final Hearing 10-08-2010
Next Hearing Date 10-08-2010
Assessment Year misc
Appeal Filed On 23-03-2007
Judgment Text
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.60/AHD/2007 [BLOCK PERIOD 1-4-1990 TO 20-10-2000] ACIT CIR.6 AHMEDABAD. VS. M/S.GUJWIRE INDUSTRIES 5 VISHRUT SOCIETY SUBHASH CHOWK MEMNAGAR AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.M. MAHESH ASSESSEE BY : SHRI G.C.PIPARA O R D E R PER G.D. AGRAWAL VICE-PRESIDENT: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XII AHMEDABAD DATED 08.12.2006 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 158BD OF THE INCOME TAX ACT 1961. 2. THE FIRST GROUND OF THE REVENUES APPEAL READS A S UNDER: THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITIONS MADE OF RS.15 LACS AND RS.10 LACS TOTALLI NG RS.25 LACS ON ACCOUNT OF UNDISCLOSED INVESTMENT IN MASTER DEVELOPERS AND HOTEL RAJPATH RESPECTIVELY. WHILE OTHER GROUNDS ARE OF GENERAL IN NATURE NEED S NO SPECIFIC ADJUDICATION. 3. THE FACTS OF THE CASE ARE THAT SEARCH PROCEEDING S WERE CARRIED OUT IN THE MASTER DEVELOPERS CASES. ONE OF THE DOCUMENTS SEIZ ED FROM THE BUSINESS PREMISES OF THE ASSESSEE WAS LOAN APPLICATION FURNI SHED BY THE ASSESSEE FOR TAKING LOAN FROM GUJARAT INDUSTRIAL CO-OPERATIVE BA NK LTD. IN COLUMN NO.30 OF IT(SS)A.NO.60/AHD/2007 -2- THE LOAN APPLICATION FORM INVESTMENT IN MASTER DEVE LOPERS AND HOTEL RAJPATH WAS SHOWN AT RS.15 LAKHS AND RS.10 LAKHS RESPECTIVE LY. DURING THE ASSESSMENT PROCEEDINGS IT WAS EXPLAINED BY THE ASS ESSEE THAT COLUMN NO.30 OF THE APPLICATION THE INVESTMENT OF THE APPLICANT FI RM AND ITS PARTNERS IS TO BE DISCLOSED. THAT THE INVESTMENT IN THE FIRM MASTER DEVELOPERS AND HOTEL RAJPATH WAS BY THE PARTNERS OF THE ASSESSEE-FIRM VI Z. SHRI RAJESH JIVRAJBHAI DESAI AND NOT THE ASSESSEE. IT WAS ALSO EXPLAINED IN THE SAID APPLICATION ITSELF THE DETAILS OF ASSETS AND LIABILITIES OF THE ASSESS EE FIRM AS ON 31-3-1999 WAS GIVEN IN WHICH NO INVESTMENT BY THE ASSESSEE FIRM W ITH MASTER DEVELOPERS OR THE HOTEL RAJPATH WAS SHOWN. HOWEVER THE AO DID N OT ACCEPT THE ASSESSEES EXPLANATION AND MADE THE ADDITION OF RS.25 LAKHS FO R UNEXPLAINED INVESTMENT BY THE ASSESSEE. 4. ON APPEAL THE CIT(A) ACCEPTED THE ASSESSEES CO NTENTION THAT THE INVESTMENT IN THE MASTER DEVELOPERS AND HOTEL RAJPA TH WAS BY THE PARTNER SHRI RAJESH JIVRAJBHAI DESAI AND NOT THE ASSESSEE. THER EFORE HE DELETED THE ADDITION. THE REVENUE AGGRIEVED WITH THE ORDER OF THE CIT(A) IS IN APPEAL BEFORE US. 5. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CI T(A) HAS CONSIDERED THE FACTS OF THE CASE IN DETAILS AND HELD AS UNDER: 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE OBSERVATIONS OF THE A.O. AS WELL AS THE ARGUMENTS FORWARDED BY THE LEARNED A.R. OF THE APPELLANT. I FIND THAT THE SEIZED PAGE NO.74 TO 78 PERTAINS TO MERELY AN APPLICATION FOR LOAN FROM THE GUJARAT INDUSTRIAL CO -OP. BANK LTD. AND THE FIGURES MENTIONED THEREIN WERE NOT THE EXACT FI GURES BUT ROUND FIGURES. IT IS ALSO A MATTER OF FACT THAT AS EVIDEN T FROM THE BALANCE SHEET OF MASTER DEVELOPERS AND HOTEL RAJPATH AS AT 31/03/ 1.999 THERE APPEARS NO SUCH INVESTMENT BY THE APPELLANT FIRM I N THE SAID CONCERNS. ON THE OTHER HAND THE EVIDENCES FURNISHED BY THE A PPELLANT FIRM BEFORE THE A.O. AS WELL AS BEFORE ME SHOW THAT THE INVESTM ENT OF RS.15.00 LACS AND RS.10.00 LACS STATED TO BE THE INVESTMENT OF TH E APPELLANT FIRM IN IT(SS)A.NO.60/AHD/2007 -3- MASTER DEVELOPERS HOTEL RAJPATH RESPECTIVELY WAS IN FACT THE INVESTMENT OF THE PARTNER OF THE APPELLANT FIRM NAM ELY SHRI RAJESH J. DESAI AND NOT THE APPELLANT FIRM. A COPY OF ACCOUN T OF SHRI RAJESH J DESAI FROM THE BOOKS OF MASTER DEVELOPERS AND HOTEL RAJPATH FOR F.Y. 1998-99 AND 1999-00 AND COPY OF THE BALANCE SHEET O F HOTEL RAJPATH AND MASTER DEVELOPERS AS AT 1/03/1999 AS SUBMITTED WITH ME WRITTEN SUBMISSIONS SUPPORT THE ABOVE TACT THAT THE INVESTM ENT HAS BEEN MADE BY :HE PARTNER OF THE APPELLANT FIRM. I WOULD LIKE TO POINT OUT AT THIS STAGE THAT THE APPELLANT HAD ALREADY CLAIMED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE INVESTMENT MENTIONE D IN THE SEIZED PAPERS PERTAIN TO THE INVESTMENT MADE BY THE PARTNE R OF THE FIRM AND NOT THE APPELLANT FIRM. THE EVIDENCES FURNISHED BEF ORE ME ARE ONLY IN CONTINUATION OF AND TO JUSTIFY THE SAID CLAIM AND H ENCE ARE ONLY CLARIFICATORY IN NATURE AND NOT TOTALLY FRESH EVIDE NCES. IN THIS CONNECTION THE APPELLANT HAS RELIED UPON THE JUDGM ENT OF BOMBAY HIGH COURT IN THE CASE OF SMT. PRABBAVATI S. SHAH VS. CI T (1998) 231 ITR I (BOM) WHICH APPEARS TO BE ACCEPTABLE AND RELEVANT I N THE CASE OF THE APPELLANT. 3.3 FURTHER TO ABOVE I AM ALSO INCLINED TO AGREE WITH THE ARGUMENTS OF THE LEARNED A.R. THAT THE TACT THAT THE IMPUGNED INVESTMENT IN MOTEL RAJPATH AND MASTER DEVELOPERS HAS BEEN MADE BY THE PARTNER OF THE APPELLANT FIRM AND NOT THE APPELLANT FIRM IS ALSO DULY SUPPORTED FROM THE FACTS AND FIGURES OF ASSETS AND LIABILITIES OF THE APPELLANT FIRM AS AT 31/03/1999 FURNISHED ON PAGE-12 OF THE LOAN APPLICA TION AS APPEARING ON PAGE NO.73 OF SEIZED ANNEXURE A-48 ITSELF WHEREI N INTERALIA NO SUCH INVESTMENT IN SISTER CONCERNS IS SHOWN. I ALSO AGRE E WITH THE CONTENTION THAT THE APPELLANT FIRM COULD NOT HAVE GIVEN SUCH C ONTRARY DETAILS IN 2 DIFFERENT COLUMNS OF THE SAME LOAN APPLICATION SINC E HAD THE APPELLANT FIRM MADE THE INVESTMENT THE SAME WOULD HAVE BEEN MENTIONED/REFLECTED IN THE BALANCE SHEET OF THE APP ELLANT FIRM AS AT 31/03/1999 AS APPEARING ON PAGE NO.73 OF ANNEXURE A -48. THUS THE CONTENTION OF THE APPELLANT THAT THE AMOUNT MENTION ED IN COLUMN NO.30 OF THE APPLICATION ARE PERTAINING TO THE APPROXIMAT E INVESTMENT MADE BY THE PARTNER OF THE APPELLANT FIRM AND NOT THE AP PELLANT FIRM AS PRESUMED BY THE AO APPEARS TO BE CORRECT AND EMERGI NG OUT OF SEIZED RECORDS ITSELF. 3.4 ON PERUSAL OF THE COPY OF ACCOUNTS OF MASTER DE VELOPERS AND HOTEL RAJPATH APPEARING IN THE BOOKS OF ACCOUNT OF RAJESH J. DESAI AS FURNISHED BY THE APPELLANT WITH WRITTEN SUBMISSIONS DATED 05/05/2005 IT IT(SS)A.NO.60/AHD/2007 -4- IS SEEN THAT THE ACCOUNT OF MASTER DEVELOPERS FOR F .Y.1999-2000 CLEARLY SHOW THAT RS.5.00 LACS AND RS.10.00 LACS AGGREGATIN G TO RS.15.00 LACS HAVE BEEN GIVEN TO MASTER DEVELOPERS ON 27/10/1999 AND 11/12/1999 RESPECTIVELY. SIMILARLY ON PERUSAL OF COPY OF ACCO UNT OF HOTEL RAJPATH FOR F.Y.1998-99 IT CAN BE SEEN THAT AN AMOUNT OF R S.7.50 LACS AND RS.2.50 LACS AGGREGATING TO RS.10.00 LACS HAVE BEEN GIVEN TO THE SAID CONCERN BY SHRI RAJESH J. DESAI ON 24/02/1999 AND 0 4/03/1999. I AM THUS OF THE OPINION THAT THE SAID UNDISPUTED FACTS ARE SUFFICIENT TO PRIMA FACIE ESTABLISH THE CONTENTIONS RAISED BY THE APPEL LANT THAT ON THE BASIS OF THE SAID AMOUNTS GIVEN BY SHRI RAJESH J. DESAI T O MASTER DEVELOPERS AND HOTEL RAJPATH THE FIGURES WERE MENTIONED IN TH E LOAN APPLICATION PREPARED IN DECEMBER 1999. ACCORDINGLY NO ADDITI ON IS WARRANTED IN THE HANDS OF THE APPELLANT ON THE BASIS NOTINGS IN THE LOAN APPLICATION THE SAID AMOUNTS NOT BEING INVESTMENT OF THE APPELL ANT FIRM BUT INVESTMENT OF SHRI RAJESH J. DESAI. FURTHER ON PE RUSAL OF THE LOAN APPLICATION APPEARING ON 74 TO 78 OF ANNEX. A-48 ON THE BASIS OF WHICH THE IMPUGNED ADDITION HAS BEEN MADE IT CAN BE SEEN THAT THE DATE OF APPLICATION IS NOT WRITTEN AND IS LEFT BLANK. THAT APART THE VARIOUS FIGURES MENTIONED IN THE SAID APPLICATION PERTAINS TO THE YEARS TILL 31/03/1999 ONLY AND ARE IN ROUND FIGURES TO THE BES T OF KNOWLEDGE AND BELIEF OF THE PERSON PREPARING THE APPLICATION FORM . MOREOVER THE FIGURES MENTIONED IN THE LOAN APPLICATION FORM ALSO DO NOT GO TO ESTABLISH THAT THE FIGURES MENTIONED THEREIN ARE PE RTAINING TO A PARTICULAR DATE. IN MY CONSIDERED OPINION THESE F ACTS AS COMING OUT OF THE SEIZED RECORDS ITSELF ALSO SUPPORTS THE CONTENT IONS AND ARGUMENTS OF THE APPELLANT. ACCORDINGLY THE ADDITIONS OF RS.10 00 000/- AND RS.15 00 000/- ARE HEREBY DELETED. AT THE TIME OF HEARING BEFORE US THE LEARNED DR WA S UNABLE TO CONTROVERT THE ABOVE FINDING RECORDED BY THE CIT(A). IN THE APPLI CATION FORM FURNISHED WITH THE BANK THE FIGURES OF THE ASSETS AND LIABILITIES OF THE ASSESSEE FIRM WAS FURNISHED IN WHICH NO INVESTMENT IN MASTER DEVELOPE RS AND HOTEL RAJPATH WAS SHOWN. THAT COLUMN 30 WAS FOR INVESTMENT IN OTHER CONCERN BY THE APPLICANT AS WELL AS PARTNER OF THE APPLICANT. THE CIT(A) HA S RECORDED THE FINDING THAT THE INVESTMENT IN THE MASTER DEVELOPERS AS WELL AS IN THE HOTEL RAJPATH WAS BY RAJESH J. DESAI AND THE SAME WAS DULY RECORDED IN H IS BOOKS OF ACCOUNTS. NO EVIDENCE WAS BROUGHT ON RECORD BY THE REVENUE TO PO INT OUT THAT IN THE BOOKS OF MASTER DEVELOPER OR HOTEL RAJPATH THERE WAS ANY INVESTMENT BY THE ASSESSEE. CONSIDERING THE TOTALITY OF THE ABOVE FA CTS AND CIRCUMSTANCES OF THE IT(SS)A.NO.60/AHD/2007 -5- CASE WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A) THE SAME IS SUSTAINED. 6. IN THE RESULT THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON 20 TH AUGUST 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 20-08-2010 VK* 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