THE ASSTT. CIT, CEN. Circle-1(4), Ahmedabad v. SHRI RASIKLAL S. PATEL,, Ahmedabad

ITSSA 150/AHD/2003 | misc
Pronouncement Date: 29-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 15020516 RSA 2003
Assessee PAN AAVPP8971G
Bench Ahmedabad
Appeal Number ITSSA 150/AHD/2003
Duration Of Justice 6 year(s) 8 month(s) 28 day(s)
Appellant THE ASSTT. CIT, CEN. Circle-1(4), Ahmedabad
Respondent SHRI RASIKLAL S. PATEL,, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 29-01-2010
Date Of Final Hearing 18-01-2010
Next Hearing Date 18-01-2010
Assessment Year misc
Appeal Filed On 01-05-2003
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM ASST. CIT CENTRAL CIRCLE 1(4) AHMEDABAD V/S . RASIKLAL S. PATEL 8-TEJENDRA PARK OPP. BHAVIN SCHOOL MIRAMBICA ROAD AHMEDABAD. PAN NO.AAVPP 8971 G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SHELLEY JINDAL SR. DR RESPONDENT BY:- SHRI DHIREN SHAH AR O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOLL OWING GROUNDS :- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN - (I) RESTRICTING THE ADDITION OF RS.81 200/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE HOLD ITEMS TO RS.35 000/- (II) ALLOWING RELIEF OF RS.50 020/- OUT OF THE A DDITION OF RS.2 04 362/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT AND FURTH ER DIRECTING THAT TELESCOPING EFFECT BE GIVEN TO THE ADDITION SU STAINED OF RS.59 317/- AGAINST THE RETURNED UNDISCLOSED INCOME OF RS.1 50 000/- (III) DELETING THE ADDITION OF RS.5 01 365/- MADE O N ACCOUNT OF PEAK AMOUNT OF UNEXPLAINED INVESTMENT IN BANK ACCOUNT A ND IT(SS)A NO.150/AHD/2003 BLOCK PERIOD 1.4.89 TO 21.12.99: 2 (IV) DELETING THE ADDITION OF AN AMOUNT OF RS.3 32 370/- OUT OF TOTAL ADDITION OF RS.3 91 932/- MADE ON ACCOUNT OF UNEXPL AINED INVESTMENT IN SHARES AND FURTHER DIRECTING THAT TEL ESCOPING EFFECT BE GIVEN TO THE ADDITION SUSTAINED OF RS.59 562/- AGAI NST THE RETURNED UNDISCLOSED INCOME OF RS.1 50 000/-. 2. THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZ URE OPERATION IN THE CASE OF SOMABHAI PATEL GROUP WAS CARRIED OUT ON 21.12.1999. THE ASSESSEE IS CLOSELY RELATED TO SHRI SOMABHAI PATEL. SEARCH WAS ALSO CONDUCTED AT HIS PREMISES. PROCEEDINGS UNDER SECTIO N 158 BC WERE INITIATED AGAINST HIM. RETURN OF INCOME FOR THE BLO CK PERIOD WAS FILED ON 18.12.2001 DISCLOSING UNDISCLOSED INCOME OF RS.1 50 000/-. AFTER CONSIDERING VARIOUS DOCUMENTS FOUND DURING SEARCH A ND EXPLANATION OF THE ASSESSEE AO PROPOSED THE FOLLOWING ADDITIONS A S PER HIS BLOCK ASSESSMENT ORDER. OUT OF THESE LD. CIT(A) ALLOWED P ARTIAL RELIEF. IT IS NOW THE REVENUE WHICH HAS CHALLENGED THE RELIEF ALLOWED TO THE ASSESSEE:- I) UNEXPLAINED INVESTMENT AS PER ANNEXURE VF (PARA-3) RS.81 200/- II) UNEXPLAINED CASH AS DISCUSSED ABOVE (PARA 1) RS.9 300/- III) UNEXPLAINED INVESTMENT IN SHARES AS DISCUSSED ABOVE (PARA-1 RS.2 04 362/- IV) PEAK CREDIT IN THE BANK A/ 12344 (PARA 5) RS.5 01 365/- V) UNEXPLAINED INVESTMENT IN SHARES (PARA-6 RS.3 91 932/- TOTAL UNDISCLOSED INCOME RS.11 88 159/- 3. THE FIRST ISSUE RELATES TO ADDITION OF RS.81 200 /- BEING UNEXPLAINED INVESTMENT IN HOUSEHOLD ITEMS. AO CONSIDERED VARIOU S ITEMS/HOUSEHOLD GADGETS AS MENTIONED IN ANNEXURE VF. HE CONSIDERED MANY ITEMS AS UNEXPLAINED AND PROPOSED ADDITION OF RS.81 200/- AS UNEXPLAINED INVESTMENT IN THESE GADGETS. LD. CIT(A) CONSIDERED THAT ASSESSEE HAS DECLARED A SUM OF RS.1 50 000/- AS UNDISCLOSED IN T HE BLOCK RETURN. HE 3 TREATED A SUM OF RS.46 200/-AS COMING OUT OF UNDISC LOSED INCOME DECLARED BY THE ASSESSEE AND ADDITION OF RS.35 000/ - WAS UPHELD BY HIM. 4. WHILE MAKING ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT OF RS.2 04 362/- LD. AO OBSERVED THAT ASSESSEE HAS MA DE INVESTMENT IN VARIOUS COMPANIES WHICH ARE INVENTORISED AS PER ANN EXURE-O-3. THE FACE VALUE OF THESE SHARES WAS AT RS.1 10 427/- BUT THE AO REJECTED THE STAND OF THE ASSESSEE THAT FACE VALUE OF THE SHARES SHOUL D BE TAKEN INTO ACCOUNT AND HE CONSIDERED THE DIFFERENCE BETWEEN FACE VALUE AND MARKET VALUE AS AVAILABLE IN THE AHMEDABAD STOCK EXCHANGE AND MADE THE ADDITION OF RS.2 04 362/-. ACCORDINGLY THE ADDITION WAS MADE. L D. CIT(A) NOTED THAT ASSESSEE HAS SUBMITTED YEAR-WISE STATEMENT OF VARIO US SHARES ACQUIRED. THE CORRESPONDING ACKNOWLEDGEMENT SLIPS HAVE BEEN S UBMITTED TO THE AO. THE INVESTMENT FROM REGULAR BANK ACCOUNT HAS BE EN SHOWN BY THE ASSESSEE. THUS THE ADDITION PROPOSED BY THE AO WAS HALF HEARTED. ACCORDING TO HIM AO HAS FURTHER MADE MISTAKE IN CAL CULATING THE UNEXPLAINED INVESTMENT. THE ACTUAL COST OF INVESTME NT IS RS.1 40 437/-. FURTHER THERE WAS MISTAKE OF RS.30 000/- IN CALCUL ATING SUCH INVESTMENT . IN ADDITION TO THIS MARKET VALUE OF SOME OF THE SH ARES WAS RS.92 795/- AS AGAINST RS.93 895/- TAKEN BY THE AO. THIS RESULTED IN MISTAKE RS.1 100/-. THE AO SHOULD HAVE TAKEN COST IN RESPECT OF SOME OF THE SHARES PURCHASED IN PRELIMINARY MARKET NOT THE MARKET VAL UE THEREOF. THE DIFFERENCE IN COST PRICE AND MARKET PRICE COMES TO RS.63 925/- (1 16 645 52 720). FURTHER THE ASSESSEE HAD SUBMITTED DETAI LS OF SHARES OF RS.50 020/-. ACCORDINGLY THE LD. CIT(A) ALLOWED REL IEF OF RS.1 45 045/- (RS.30 000/- + RS.1 100/- + RS.63 925/- + RS.50 020 /-) ON THE BASIS OF DETAILS ALREADY FURNISHED BY THE ASSESSEE. FOR THE BALANCE AMOUNT DETAILS WERE NOT FURNISHED ACCORDINGLY THE ADDITION WAS SUS TAINED. THE ADDITION SUSTAINED WAS OF RS.59 317/-. THEREAFTER LD. CIT ( A) DIRECTED THE AO TO 4 ALLOW TELESCOPING BENEFIT OF RS.1 50 000/- DECLARED BY THE ASSESSEE IN THE BLOCK RETURN. 5. THE NEXT ISSUE IS REGARDING DELETION OF ADDITION OF RS.5 01 365/- BEING PEAK AMOUNT IN THE BANK ACCOUNT. THE AO EXAMI NED THE BANK ACCOUNT NO.12344 WITH BANK OF BARODA NAVRANGPURA B RANCH AHMEDABAD AND NOTICED PEAK CREDIT OF RS.5 01 365/-. IT WAS EXPLAINED THAT THIS CREDIT IS OUT OF RETIREMENT BENEFIT RECEI VED BY THE ASSESSEE BUT THE AO DID NOT AGREE AND THE ADDITION WAS MADE. LD. CIT (A) NOTED THAT ASSESSEE HAS RECEIVED RETIREMENT BENEFIT WHICH WAS DEPOSITED IN THE BANK ACCOUNT PART OF THE AMOUNT WAS GIVEN ON LOAN WHICH WAS RECEIVED BACK AND SUBSEQUENTLY RS.5 00 000/- WAS CREDITED IN THIS BANK ACCOUNT. LD. CIT(A) ACCORDINGLY DELETED THE ADDITION. 6. WE HAVE HEARD THE PARTIES. LD. AR SUBMITTED THAT ASSESSEE HAS RECEIVED A SUM OF RS.4 77 148/- ON 4.7.1995 AND DEP OSITED IN BANK ACCOUNT. THEREAFTER A SUM OF RS.2 00 000/- WAS GIVE N AS ADVANCE FOR PURCHASE OF FLAT ON 7.7.1995. A SUM OF RS.1 00 000/ - WAS GIVEN AS TEMPORARY LOAN TO NATRAJ TRADING. ON 13.7.1995 ANOT HER SUM OF RS.1 77 000/- WAS GIVEN AS TEMPORARY LOAN TO BHARAT TRADING CO. THESE LOANS WERE RETURNED ON 9.11.1995 AND 17.11.1995. OU T OF THESE A SUM OF RS.2 70 000/- WAS PAID TO KAILASHBHAI FOR LAND PURC HASE . THE ASSESSEE RECEIVED THE SUM OF RS.2 32 604/- AS PF FROM ARVIND MILLS. IT WAS CREDITED IN BANK ACCOUNT NO.12344 WITH BANK OF BARO DA OUT OF WHICH ASSESSEE GAVE A TEMPORARY LOAN OF RS.1 00 000/- AND RS.1 30 000/- ON 7.8.1995 AND 9.8.1995 RESPECTIVELY. THEY WERE RECEI VED BACK ON 9.11.1995 AND 18.11.1995 RESPECTIVELY. OUT OF THIS A SUM OF RS.2 30 000/- WAS PAID TO KAILASHBHAI FOR PURCHASE OF LAND. SUBSEQUENTLY ON 3.6.1996 ASSESSEE RECEIVED BACK RS.2 30 000 + RS .2 70 000/- WHICH 5 WAS CREDITED. BUT THE A.O. TREATED ENTIRE SUM AS UNEXPLAINED AND ADDED PEAK CREDIT IN THE BANK ACCOUNT AS UNEXPLAINED. LD. DR SUBMITTED THAT THERE IS NO NEXUS BETWEEN THE VARIOUS SUMS GIVEN BY THE ASSESSEE AND REFUND FROM THE DEBTORS AND SUBSEQUENT CREDIT OF RS .5 00 000/- IN THE BANK ACCOUNT. IT IS FOR THE ASSESSEE TO ESTABLISH T HE NEXUS WHICH HAS NOT BEEN DONE. NO DOCUMENTARY EVIDENCE HAS BEEN FILED B EFORE THE AO. 7. THE LAST ISSUE IS ABOUT DELETING ADDITION OF RS. 3 32 370/- OUT OF ADDITION OF RS.3 91 932/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES. THE AO FOUND THAT ASSESSEE HAS BEEN MAINTAINING DEM AT ACCOUNT IN HIS NAME AS WELL AS IN THE NAMES OF HIS FAMILY MEMBERS. THE ASSESSEE WAS ASKED TO EXPLAIN THE ACQUISITION OF SHARES. IT WAS EXPLAINED THAT ASSESSEE HAS RECEIVED RS.4 77 148/- AND RS.2 23 404/- FROM A RVIND MILLS ON RETIREMENT. THE AO DID NOT FIND NEXUS BETWEEN THE M ONEY RECEIVED AND THE INVESTMENT MADE AND ACCORDINGLY MADE THE ADDITI ON. LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT AO HAS NOT CONSIDERED THAT ASSESSEE PURCHASED SHARES IN 1984-85. IT HAS ALSO R ECEIVED BONUS SHARES. THE ADDITION COULD BE MADE ON THE BASIS OF COST PRI CE AND NOT ON THE MARKET PRICE. MOST OF THE SHARES ARE ACQUIRED FROM EXPLAINED SOURCES. THE DETAILS SUBMITTED BY ASSESSEE ARE ALSO SUPPORTE D BY ACKNOWLEDGEMENT SLIPS BONUS WARRANTS RIGHT WARRAN TS AS WELL AS DETAILS OF ACQUISITION OF DEBENTURES AND CONVERSION OF THE SAME INTO SHARES. TO THE EXTENT ASSESSEE WAS ABLE TO EXPLAIN LD. CIT(A) DELETED THE ADDITION AMOUNTING TO RS.3 32 170/- AND REST OF THE ADDITION WAS CONFIRMED BUT TELESCOPING BENEFIT OF RS.1 50 000/- WAS GIVEN. 8. WE HAVE HEARD THE PARTIES. REGARDING GROUND NO.( III) RELATING TO DELETION OF ADDITION OF RS.5 01 365/- IT IS CONSIDE RED NECESSARY THAT ASSESSEE SHOULD ESTABLISH NEXUS BETWEEN VARIOUS DEP OSITS AND 6 WITHDRAWALS AND FINAL DEPOSITS OF RS.5 00 000/- IN THE BANK ACCOUNT AS ON 3.6.1996. IT SEEMS THAT EXPLANATION AND CERTIFICATE REGARDING RETURN FROM KAILASHBHAI ARE SOUGHT TO BE SUBMITTED FOR THE FIRS T TIME BEFORE US. WE ARE UNABLE TO TAKE ANY COGNIZANCE THEREOF. LET THE NEXU S BE ESTABLISHED BEFORE THE AO. ONLY. ACCORDINGLY THIS ISSUE IS REST ORED TO THE A.O. THIS GROUND OF REVENUE IS ALLOWED FOR STATISTICAL PURPOS ES. 9. REGARDING OTHER ISSUES WE FIND THAT THERE IS NO CONTRARY MATERIAL AGAINST THE ORDER OF LD. CIT(A). VERY DETAILED REAS ONS HAVE BEEN ADVANCED AS TO HOW THE AO HAS COMMITTED MISTAKE. AF TER CONSIDERING ALL THESE ASPECTS LD. CIT(A) HAS DELETED THE ADDITION A ND SUSTAINED A PART OF IT WHICH WAS CONSIDERED AS COVERED BY DISCLOSURE OF RS .1 50 000/-. WE DO NOT FIND ANYTHING CONTRARY EITHER IN FACTS OR IN LA W TO HOLD OTHERWISE THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) CANNOT BE COVERED BY THE DISCLOSURE OF RS.1 50 000/-. THEREFORE GROUND NOS. (I) (II) & (IV) RAISED BY THE REVENUE ARE REJECTED WHEREAS GROUND NO.3 REG ARDING DELETION OF ADDITION OF RS.5 01 365/- IS SET ASIDE TO THE FILE OF AO. 10. IN THE RESULT APPEAL OF THE REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. SD.- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 29.01.2010 ORDER PRONOUNCED IN OPEN COURT ON 29.01.2010 7 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD