Vimalbhai Mauljibhai Gabani, Surat v. The Income tax Officer,Ward-9(4),, Surat

ITA 491/AHD/2008 | 2002-2003
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 49120514 RSA 2008
Assessee PAN ABPPG8114P
Bench Ahmedabad
Appeal Number ITA 491/AHD/2008
Duration Of Justice 2 year(s) 3 month(s) 10 day(s)
Appellant Vimalbhai Mauljibhai Gabani, Surat
Respondent The Income tax Officer,Ward-9(4),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 21-05-2010
Date Of Final Hearing 18-05-2010
Next Hearing Date 18-05-2010
Assessment Year 2002-2003
Appeal Filed On 11-02-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.491-492 & 494/AHD/2008 ASSESSMENT YEARS :2002-03 TO 2004-05 DATE OF HEARING:18.5.10 DRAFTED:18.5.10 SHRI VIMALBHAI MULJIBHAI GABANAI 7 TRIKAMNAGA SOCIETY-I LAMBE HANUMAN ROAD SUAT- 395006 ITA NO.ABPPG8114P V/S . THE INCOME-TAX OFFICER WARD-9(4) SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI R.N. VEPARI AR REVENUE BY:- SHRI SANJEEV KASHYAP SR-DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- THESE ARE THE THREE APPEALS FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2002-03 TO 2004-05 AGAINST THE ORDER OF LD. CIT(APPEALS) DATED 25-10-2007. SINCE ALL THESE APPEALS INVOLVED COMMON ISSUE HENCE THEY ARE TAKEN UP TOG ETHER FOR THE SAKE OF CONVENIENCE. 2. IN THESE APPEALS ONE OF THE COMMON GROUNDS RAISE D IS THAT ASSESSING OFFICER WAS NOT JUSTIFIED AND ACCORDINGLY LD. CIT(APPEALS) ALSO WAS NOT JUSTIFIED IN UPHOLDING THE RE-OPENING ASSESSMENT U/S.147. 3. THE FACTS OF THE CASE ARE THAT A SURVEY U/S.133A WAS CARRIED OUT AT THE PREMISES IN THE CASE OF SHI PANKAJ DANAWALA CHARTERED ACCOUNTANT W HO WAS FOUND TO HAVE PREPARED PROFIT & LOSS ACCOUNT CAPITAL ACCOUNT AND BALANCE-SHEET S HOWING BUILDING OF CAPITAL FROM YEAR-TO- YEAR IN THE NAME OF SEVERAL ASSESSEES. THE RELEVANT DOCUMENTS WERE FOUND IN THE SURVEY. SHRI ITA NO.491-92 & 494/AHD/2008 A.YS. 02-03 TO 04-05 SH. VIMALBHAI M GABANI V. ITO WD-9(4) SRT PAGE 2 PANKAJ DANAWALA IS A PRACTICING CA. HE HAS CREATED CAPITAL IN LARGE NUMBER OF CASES. AFTER BUILDING CAPITAL FOR SEVERAL YEARS RETURNS OF INCOM E-TAX WERE FILED SHOWING SUCH ENHANCED OPENING CAPITAL. FURTHER THERE USED TO BE DIFFEREN CE BETWEEN CLOSING ACCOUNT AS ON 31 ST MARCH OF THE ACCOUNTING YEAR AND OPENING CAPITAL ON THE 1 ST DAY OF APRIL OF THE NEXT ACCOUNTING YEAR. THE DIFFERENCE REMAINED UNEXPLAINE D IN THE CASE OF THE PRESENT ASSESSEE. SUCH DISCREPANCIES WERE NOTICED BY THE ASSESSING OF FICER FROM THE DOCUMENTS FOUND FROM THE PREMISES OF SHRI PANKAJ DANAWALA. CLOSING CAPIT AL IN THE CASE OF PRESENT ASSESSEE FOR THE ASSESSMENT YEAR 2001-02 WAS SHOWN AT RS.5 45 960/- WHEREAS OPENING CAPITAL ON 01-04- 2001 WAS SHOWN AT RS.29 45 960/-. THUS CAPITAL BAL ANCE WAS INFLATED BY RS.24 LAKH. THIS ENHANCE CAPITAL OF RS.24 LAKH WAS UTILIZED OR SHOWN TO HAVE BEEN INVESTED IN VARIOUS FIRMS AS UNDER:- SR.NO NAME/PARTICULARS OF OTHER INVESTMENTS DURING THE YE AR AMOUNT RS. 1. LOAN SCHEDULE A (SCHEDULE NOT FILED WITH RETURN) 350000 2. LOAN SCHEDULE B (SCHEDULE NOT FILED WITH RETURN) 237000 3. NARMADA TEXTILE MACHINERY WORKS 280000 4. SAMESHWAR TEXTILE MACHINERY WORKS 640000 5. GANESH ENGINEERING WORKS 463000 6. AMBCA TEXTILES MACHINERY STORES 430000 TOTAL 2400000 SINCE SUCH FICTITIOUS INVESTMENT WAS NOTICED BY THE ASSESSING OFFICER HE PROCEEDED TO RE- OPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003 -04 ALSO. THE ASSESSEE HAD SHOWN TO HAVE EARNED INCOME OUT OF SUCH INVESTMENTS WHICH MA Y FALL FOR CONSIDERATION IN THE ASSESSMENT YEAR 2004-05. 4. THE LD. CIT(APPEALS) CONFIRMED THE RE-OPENING OF THE ASSESSMENT AS WELL AS ADDITION ON MERITS. 5. BEFORE US LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER HAS NOT PROVIDE TO HIM THE COPIES OF THE REASONS RECORDED AND HE HAS N OT BEEN ABLE TO MEET OUT THOSE REASONS AT THE INITIAL STAGE. IN FACT THE DEPARTMENT HAS NOT FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF G.K.N.DRIVE SHAFT (INDIA) LTD. V. ITO (2003) 259 ITR 90 (SC). ITA NO.491-92 & 494/AHD/2008 A.YS. 02-03 TO 04-05 SH. VIMALBHAI M GABANI V. ITO WD-9(4) SRT PAGE 3 6. LD. SR-DR ON THE OTHER HAND SUPPORTED THE ORDERS OF LOWER AUTHORITIES BELOW. 7. AFTER CONSIDERING THE RIVAL CONTENTIONS WE REST ORE THE MATTER TO THE FILE OF ASSESSING OFFICER FOR PROVIDING OF THE COPIES OF REASONS RECO RDED TO THE ASSESSEE INVITING HIS OBJECTION THEREON. AFTER RECEIVING OBJECTION AO WILL PASS A SPEAKING ORDER ACCEPTING OR REJECTING THE OBJECTION. IN CASE OBJECTIONS ARE ACCEPTED THERE NO FURTHER ACTION FOR ASSESSING ALLEGED INCOME-TAX WOULD BE TAKEN. OTHERWISE ASSESSMENT PRO CEEDINGS AS PER LAW WILL BE UNDERTAKEN AFRESH. AS A RESULT APPEALS FILED BY THE ASSESSEE ARE RESTORED TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AS INDICATE ABOVE. 8. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 21/05/2010 SD/- SD/- ( T.K.SHARMA ) ( D.C.AGRAWAL ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 21/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-V SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD