The ACIT, Circle-7,, Ahmedabad v. Shri Dineshchandra N.Desai, Ahmedabad

ITA 1164/AHD/2007 | 2003-2004
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 116420514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 1164/AHD/2007
Duration Of Justice 2 year(s) 11 month(s) 11 day(s)
Appellant The ACIT, Circle-7,, Ahmedabad
Respondent Shri Dineshchandra N.Desai, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 26-02-2010
Date Of Final Hearing 25-02-2010
Next Hearing Date 25-02-2010
Assessment Year 2003-2004
Appeal Filed On 16-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' (BEFORE S/SHRI N S SAINI AND MAHAVIR SINGH) ITA NO.1164/AHD/2007 (ASSESSMENT YEAR:- 2003-04) THE ASSISTANT COMMISSIONER OF INCOME- TAX CIRCLE-7 AHMEDABAD V/S SHRI DINESHCHANDRA N DESAI C/12 BHAGWATINAHAR NAVRANGPURA AHMEDABAD [PETITIONER] [RESPONDENT] PETITIONER BY :- SHRI M C PANDIT SENIOR DR RESPONDENT BY:- SHRI B S RAJPUT O R D E R PER N S SAINI (ACCOUNTANT MEMBER) : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME-TAX (APPEALS) DATED 27-12-2006 FOR ASSESSMEN T YEAR 2003-04. 2 GROUND NO.1 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN REDUCING THE ESTIMATED PROFIT FROM THE PROPRIETARY CONCERN M /S DIAMOND INTERNATIONAL FROM RS.5 22 880/- TO A LOSS OF RS.5 55 057/-. 3 THE ASSESSEE IS IN THE BUSINESS OF TRADING IN NOT E BOOKS AND STATIONERY ITEMS AND DECLARED TRADING LOSS OF RS.9 22 175/-. THE LEARNED ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE REASON FOR INCURRING THE LOSS. THE ASSESSEE EXPLAIN ED THAT IT PURCHASED GOODS AT A PRE-DETERMINED PRICE AS THE NA TURE OF BUSINESS OF THE ASSESSEE WAS SEASONAL. THE ASSESSEE COULD NOT SELL THE GOODS AT PROFIT BECAUSE OF STIFF COMPETITION FA CED FROM TWO 2 TRUSTS. VIZ. SWAMINARAYAN GURUKUL AND ASHARAM BAPU TRUST WHO HAD PUT UP HUGE QUANTITY OF STOCKS IN THE MARKET AN D SOLD THE SAME AT CONCESSIONAL RATES. SINCE THE BUSINESS OF THE AS SESSEE WAS SEASONAL IN CHARACTER AND AS THE ASSESSEE DECIDED T O DISCONTINUE ITS BUSINESS IT WAS FORCED TO SELL THE GOODS AT A PRIC E LESS THAN THE COST RESULTING IN A LOSS. 4 THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE LEARNED ASSESSING OFFICER. ACCORDING TO THE AO THE ASSESSEE PURCHASED GOODS AT A HIGHER PRICE FROM ITS ASSOCIAT E CONCERNS NAMELY D D ENTERPRISES AND M/S JAYSHREE STATIONERY MART AT A TIME WHEN PRICES HAD ACTUALLY FALLEN. THE AO FURTHE R OBSERVED THAT WHEN THE ASSESSEE WAS FORCED TO SELL THE GOODS AT A LOWER PRICE THAN THE PURCHASE PRICE DUE TO ALLEGED STIFF COMPET ITION THEN THERE WAS NO REASON FOR HIM TO MAKE PURCHASES FROM ITS AS SOCIATE CONCERNS DURING THE OFF SEASON AT A HIGHER RATE. TH EREFORE THE AO REJECTED THE CLAIM OF LOSS OF THE ASSESSEE AND ADOP TED GROSS PROFIT RATE OF 6.2% ON THE BASIS OF THE GROSS PROFIT DECLA RED IN THE PRECEDING ASSESSMENT YEAR AND ESTIMATED THE PROFIT OF THE ASSESSEE AT RS.5 22 880/-. 5 IN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED ASSESSING OFFICER AND SUBMITTED THAT FULL Q UANTITATIVE DETAILS OF ITEMS PURCHASED AND SOLD ARE MAINTAINED BY THE ASSESSEE AND NO DEFECT WAS POINTED OUT BY THE AO. MERELY BEC AUSE CERTAIN PURCHASES WERE MADE FROM ASSOCIATE CONCERNS DURING THE OFF SEASON DOES NOT IMPLY THAT THE ASSESSEE HAD INTENTI ONALLY INCURRED THE LOSS. IT WAS FURTHER SUBMITTED THAT THE GENUINE NESS OF THE PURCHASES AND SALES ARE NOT DOUBTED BY THE LEARNED ASSESSING OFFICER AND THEREFORE THE LOSS INCURRED IN THE NORM AL COURSE OF THE 3 BUSINESS CANNOT BE REJECTED. THE ASSESSEE RELIED U PON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. AMRISH & CO. 84 TAXMAN 239 (AHD). 6 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD TH AT THE LEARNED ASSESSING OFFICER HAS NOT PROPERLY INVESTIGATED INT O THE REASONS ADVANCED BY THE ASSESSEE TO JUSTIFY ITS CLAIM OF LO SS. THE EXPLANATION OF THE ASSESSEE THAT THE GOODS WERE PUR CHASED AT AN AGREED PRICE AT THE START OF THE SEASON AND THAT TW O BIG TRUSTS HAD SOLD HUGE QUANTITY OF NOTE BOOKS AT A HIGHLY CONCES SIONAL RATE THEREBY GIVING STIFF COMPETITION HAS NOT BEEN PROPE RLY EXAMINED BY THE LEARNED ASSESSING OFFICER AS THERE IS NO DIS CUSSION ABOUT THE SAME IN THE ASSESSMENT ORDER. THE CONTENTION OF THE ASSESSEE THAT COMPLETE QUANTITATIVE DETAILS OF PURCHASES AND SALES ALONG WITH THE RATE AND VALUE WERE PRODUCED BEFORE THE LE ARNED ASSESSING OFFICER AND NO DEFECT WAS POINTED OUT BY THE LEARNED ASSESSING OFFICER IS ALSO FOUND TO BE CORRECT AS T HE LEARNED ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT BY MAKING GENERAL OBSERVATION THAT THEIR SEASON HAD FAILED. I N THESE CIRCUMSTANCES WHEN THE ASSESSEE HAS MAINTAINED COM PLETE QUANTITATIVE DETAILS TOGETHER WITH PURCHASES AND SA LES INVOICES AND VOUCHERS THE LOSS CLAIMED BY THE ASSESSEE CANNOT B E REJECTED UNLESS THE LEARNED ASSESSING OFFICER PROVES THAT TH ERE WAS A COLORFUL DEVICE ADOPTED BY THE ASSESSEE TO REDUCE T HE INCIDENCE OF TAX EITHER BY RESORTING TO INFLATION OF PURCHASE PR ICE OR BY UNDERSTATEMENT OF SELLING PRICE. SINCE THE LEARNED ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE PURC HASES AND SALES THEREFORE THE DECISION OF THE AHMEDABAD BEN CH OF THE TRIBUNAL IN THE CASE OF AMRISH & CO. SQUARELY COVER S THE PRESENT FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE. IT WAS FURTHER 4 OBSERVED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE ASSESSEE HAS MADE PURCHASES FROM ITS ASSOC IATE CONCERNS DURING OFF SEASON PERIOD AT HIGHER PURCHASE PRICE I N COMPARISON TO MARKET PRICE. THE ASSESSEE MADE PURCHASES OF RS.24 25 948/- FROM D D ENTERPRISES AND PURCHASES OF RS.12 64 085/- FRO M M/S JAYSHREE STATIONERY MART TOTALING TO RS.36 90 033/- . THE TOTAL PURCHASES OF THE ASSESSEE DURING THE ENTIRE YEAR WA S RS.92 68 660/-. THUS THE PURCHASES MADE FROM ASSOC IATE CONCERNS WORKS OUT TO 39.81% OF THE TOTAL PURCHASES. ACCORD ING TO THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IT WOU LD MEET THE ENDS OF JUSTICE IF THE GROSS LOSS IS DISALLOWED TO THE EXTENT OF 39.81% WHICH IS EQUAL TO THE TOTAL AMOUNT OF PURCHA SES MADE FROM THE ASSOCIATE CONCERNS BECAUSE THE ASSESSEE WAS NOT ABLE TO GIVE CONVINCING REASONS FOR MAKING THE PURCHASES OF GOOD S DURING THE OFF SEASON FROM ASSOCIATE CONCERNS AT A PRICE HIGHE R THAN THE MARKET PRICE. THUS THE LEARNED COMMISSIONER OF INC OME-TAX (APPEALS) HELD THAT ASSESSEE HAS MADE EXCESSIVE PAY MENT TO ASSOCIATE CONCERNS OF RS.3 67 118/- I.E. (RS.9 22 1 75/- X 39.81%) WHICH IS REQUIRED TO BE DISALLOWED U/S 40A(2)(B) OF THE ACT. ACCORDINGLY HE REDUCED THE LOSS TO RS.5 55 257 (RS .9 22 175 RS.3 67 118) AND ALLOWED RELIEF OF RS.10 77 937/- T O THE ASSESSEE. 7 THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER WHEREAS THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 8 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE THE ASSESSEE IS ENGAGED IN THE BU SINESS OF TRADING IN NOTE BOOKS AND OTHER STATIONERY ITEMS. DURING TH E YEAR THE ASSESSEE HAS SHOWN LOSS OF RS.9 22 175/- IN THE RET URN OF INCOME 5 FILED BY HIM. THE ASSESSEE EXPLAINED BEFORE THE AO THAT HE HAD PURCHASED GOODS AT PRE-DETERMINED PRICES AS THE NAT URE OF HIS BUSINESS WAS SEASONAL AND THAT HE COULD NOT SELL TH E GOODS AT A PROFIT ON ACCOUNT OF TOUGH COMPETITION FACED FROM T WO TRUSTS VIZ. SWAMINARAYAN GURUKUL AND ASHARAM BAPU TRUST WHO PUT HUGE QUANTITY OF STOCK IN THE MARKET AND SOLD IT AT MUCH CONCESSIONAL RATE. AS THE ASSESSEE HAD DECIDED TO DISCONTINUE TH E BUSINESS AND AS THE NATURE OF BUSINESS WAS SEASONAL IT WAS FORC ED TO SELL ITS GOODS AT LESS PRICE THAN ITS COST RESULTING IN A LO SS. THE AO DID NOT ACCEPT THE SAID EXPLANATION OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE PURCHASED GOODS AT A HIGHER PRICE FROM ITS ASSOCIATE CONCERNS VIZ. D D ENTERPRISES AND M/S JAYSHREE STA TIONERY MART AT A TIME WHEN THE PRICES HAD FALLEN. THEREFORE TH E AO DISREGARDED THE LOSS AND ESTIMATED THE INCOME BY AD OPTING GROSS PROFIT RATE OF 6.2% WHICH WAS THE RATE OF GROSS PRO FIT SHOWN BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR AND ESTIMATED THE INCOME AT RS.5 22 880/-. IN APPEAL THE LEARNED COMM ISSIONER OF INCOME-TAX (APPEALS) OBSERVED THAT THE AO HAS NOT P ROPERLY INVESTIGATED THE REASONS GIVEN BY THE ASSESSEE TO J USTIFY THE CLAIM OF LOSS. THE REASON GIVEN BY THE ASSESSEE THAT IT H AD TO PURCHASE THE GOODS AT THE AGREED PRICE AT THE START OF THE S EASON AND HAD TO SELL THE SAME AT A PRICE LOWER THAN ITS COST DUE TO TOUGH COMPETITION FROM SWAMINARAYAN GURUKUL TRUST AND ASH ARAM BAPU TRUST WHO WERE SELLING THE GOODS AT A MUCH LOWER PR ICE WAS NOT EXAMINED BY THE LEARNED ASSESSING OFFICER AS THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER. THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) ALSO OBSERVED THAT THE ASSESSE E WAS MAINTAINING COMPLETE QUANTITATIVE DETAILS TOGETHER WITH PURCHASE AND SALE INVOICES / VOUCHERS AND THE CLAIM OF LOSS CANNOT BE REJECTED BY THE LEARNED ASSESSING OFFICER WITHOUT S HOWING THAT THE ASSESSEE HAS ADOPTED ANY COLORFUL DEVICE IN ORD ER TO REDUCE THE 6 INCIDENCE OF TAX. THE LEARNED COMMISSIONER OF INCOM E-TAX (APPEALS) FURTHER OBSERVED THAT THE GENUINENESS OF THE PURCHASES AND SALES SHOWN BY THE ASSESSEE WAS NOT DOUBTED BY THE AO. THEREFORE HE DID NOT ACCEPT THE ORDER OF THE AO IN NOT ACCEPTING THE LOSS SHOWN BY THE ASSESSEE. HOWEVER HE OBSERVE D THAT THE ASSESSEE HAD MADE PURCHASES OF RS.36 90 033/- FROM ITS ASSOCIATE CONCERNS WHICH WAS 39.81% OF THE TOTAL PURCHASES MA DE DURING THE YEAR OF RS.92 68 660/-. THEREFORE BY INVOKING THE PROVISIONS OF SECTION 40A(2)(B) DISALLOWED THE LOSS SHOWN ON THE PURCHASES MADE FROM THE ASSOCIATE CONCERNS DURING THE OFF SEA SON AT HIGHER PURCHASE PRICE WHICH WAS DETERMINED BY HIM AT THE R ATE OF 39.81% OF THE TOTAL LOSS OF RS.9 22 175/- WHICH AMOUNTED T O RS.3 67 118/-. THUS THE LEARNED COMMISSIONER OF INCOME-TAX (APPEA LS) ALLOWED THE LOSS OF RS.5 55 057/- TO THE ASSESSEE OUT OF TH E TOTAL LOSS OF RS.9 22 175/- CLAIMED BY THE ASSESSEE THEREBY GRANT ING RELIEF OF RS.10 77 937/- CLAIMED BY THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED A SSESSING OFFICER BUT COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE CIT(A) . WE FIND THAT THE LEARNED ASSESSING OFF ICER REJECTED THE BOOK RESULT ON THE GROUND THAT THE BOOK RESULT SHOWED A LOSS AND THE ASSESSEE MADE PURCHASES FROM HIS ASSOCIATE CONCERNS AT A HIGHER PRICE. THE CIT(A) FOUND THAT OUT OF TOTAL PU RCHASES OF RS.92 68 660/- PURCHASES FROM ASSOCIATE CONCERNS WA S RS.36 90 063/- WHICH WORKS OUT TO 39.81%. THE CIT(A ) ON THE BASIS OF THE SAME DISALLOWED 39.81% OF THE LOSS CLA IMED BY THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 40A(2)(B ) OF THE ACT. THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST T HE ORDER OF THE CIT(A). WE FIND THAT THE LEARNED ASSESSING OFFICER COULD NOT POINT OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOU NT MAINTAINED BY THE ASSESSEE. FURTHER THE REVENUE COULD NOT BRI NG ANY MATERIAL BEFORE US TO SHOW THAT ENTIRE LOSS OF RS.9 22 175/- CLAIMED BY THE 7 ASSESSEE WAS ON ACCOUNT OF PURCHASE MADE FROM THE A SSOCIATE CONCERNS. FURTHER NO MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE MARKET VALUE OF THE GOODS WAS LOWER THAN THE RATE AT WHICH GOODS WAS PURCHASED BY THE A SSESSEE FROM ITS ASSOCIATE CONCERNS ON THE DATE OF ACTUAL PURCHA SE. IN THE SBOVE CIRCUMSTANCES WE DO NOT FIND ANY MERIT IN THIS GROU ND OF APPEAL OF THE REVENUE AND HENCE THE SAME IS DISMISSED. 9 GROUND NO.2 OF THE APPEAL OF THE REVENUE IS DIREC TED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST RELATING TO INTEREST FREE LOANS GIVEN TO FAMILY MEM BERS AND ASSOCIATE CONCERNS TO THE EXTENT OF INTEREST EXPENS ES CLAIMED. 10 THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD ADVANCED LOANS AGGREGATING TO RS.7 37 05 797/- OUT OF WHICH RS.7 10 00 359/- RELATES TO AMOUNTS GIVEN TO FAMILY MEMBERS AND ASSOCIATE CONCERNS ON WHICH NO INTEREST HAS BEEN CH ARGED. THE ASSESSEE EXPLAINED BEFORE THE LEARNED ASSESSING OFF ICER THAT ALL THE FAMILY MEMBERS AND ASSOCIATE CONCERNS TO WHOM T HE SUMS WERE ADVANCED HAVE SUFFERED HUGE LOSSES IN SHARE TRADING BUSINESS AND THEY WERE NOT IN A POSITION TO RE-PAY BACK EVEN THE PRINCIPAL AMOUNT. INTEREST HAS NOT BEEN PROVIDED DUE TO BAD F INANCIAL POSITION OF THESE DEBTORS. THE OTHER REASON GIVEN W AS THAT THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS AVAILAB LE WITH IT. THE SAID EXPLANATION WAS NOT ACCEPTED BY THE LEARNED AS SESSING OFFICER WHO CALCULATED THE INTEREST AT THE RATE OF 12% PER ANNUM ON THE TOTAL ADVANCES OF RS.7 10 00 359/- AND WORKE D OUT THE INTEREST INCOME OF RS.85 20 043/- AND MADE ADDITION TO THE INCOME OF THE ASSESSEE. 8 11 IN APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME-TAX (APPEALS) THE ASSESSEE SUBMITTED THAT THERE WAS NO PROVISION UNDER THE IT ACT WHICH ALLOWED THE LEARNED ASSESSING OFFI CER TO CHARGE NOTIONAL INTEREST. FOR THIS RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. A RAMAN & CO. 67 ITR 11 (SC). IT WAS ALSO ARGUED THAT IT IS NOT THE CASE OF THE LEARNED ASSESSING OFFICER THAT INTEREST BEARING FUN DS HAVE BEEN DIVERTED TO THE FAMILY MEMBERS AND ASSOCIATE CONCER NS WITHOUT CHARGING ANY INTEREST. IT WAS SUBMITTED THAT APART FROM ITS OWN INTEREST FREE CAPITAL OF RS.1 41 11 007/- THE ASSES SEE HAD INTEREST FREE UNSECURED LOANS OF RS.6 10 37 713/-. SINCE INT EREST FREE FUNDS AVAILABLE WITH THE ASSESSEE WAS MORE THAN THE INTER EST FREE ADVANCES TO FAMILY MEMBERS THERE WAS NO QUESTION OF CHARGING ANY INTEREST. RELIANCE WAS PLACED ON THE DECISION OF TH E AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHAHIBAUG ENTE PRENEURS VS ITO (1994) 50 ITD 113 (AHD). 12 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD TH AT THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED IN CHARGING NOT IONAL INTEREST ON INTEREST FREE ADVANCES WHICH ARE FOUND TO BE GIV EN OUT OF INTEREST FREE FUNDS OF THE ASSESSEE. 13 THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDER OF THE LEARNED ASSESSING OFFICER WHEREAS THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 14 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE THE ASSESSEE HAD ADVANCED LOANS TO ITS FAMILY 9 MEMBERS AND ASSOCIATE CONCERNS OF RS.7 10 00 359/- ON WHICH NO INTEREST WAS CHARGED BY THE ASSESSEE. THE LEARNED A SSESSING OFFICER THEREFORE ESTIMATED THE INTEREST INCOME AT THE RATE OF 12% P.A. ON THE SAID AMOUNT AND MADE ADDITION OF RS.85 20 043/- ON ACCOUNT OF INTEREST ACCRUED ON LOANS AND ADVANCES. IN APPEAL THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) DELETE D THE SAME BY OBSERVING THAT THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED IN CHARGING NOTIONAL INTEREST ON AMOUNTS ADVANCED T O FAMILY MEMBERS AND ASSOCIATE CONCERNS OUT OF INTEREST FREE FUNDS OF THE ASSESSEE. IN THE ABOVE FACTS AND CIRCUMSTANCES OF T HE CASE WE ARE OF THE CONSIDERED OPINION THAT THE LAW DOES NOT OBL IGE A TRADER TO MAKE THE MAXIMUM PROFIT THAT HE CAN OUT OF HIS TRAD ING TRANSACTIONS. INCOME WHICH ACCRUES ALONE CAN BE TAX ABLE IN HIS HANDS AND NOT THE INCOME WHICH COULD HAVE BUT HAVE NOT BEEN EARNED OR ACCRUED TO HIM. FURTHER WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS UTILIZED BORROWED FUNDS TO MAKE INTEREST FREE ADVANCES TO ITS FAMILY MEMBERS AND SI STER CONCERNS THEREBY REDUCING ITS TAXABLE INCOME. THEREFORE WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE O RDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). IT IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSE D. 15 IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 26-02-2010 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (N S SAINI) ACCOUNTANT MEMBER DATE : 26-02-2010 10 COPY OF THE ORDER FORWARDED TO : 1. SHRI DINESHCHANDRA N DESAI C/12 BHAGWATINAHAR NAVRANGPURA AHMEDABAD 2. THE ACIT CIRCLE-7 AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XIII AHMEDABAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD