Income Tax Appellate Tribunal - Ahmedabad
Jaydeep Jewellers, Ahmedabad vs Department Of Income Tax on 25 May, 2007
-1-
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "D" AHMEDABAD
Before S/Shri G. D. Agrawal, VP & Mukul Kr. Shrawat, JM
ITA No. C.O.No. Asst. Year
1.3525/Ahd/2007 1999-2000
2.3526/Ahd/2007 350/Ahd/2007 2000-2001
3. 3527/Ahd/2007 351/Ahd/2007 2002-2003
4. 3528/Ahd/2007 352/Ahd/2007 2003-2004
5. 3529/Ahd/2007 353/Ahd/2007 2004-2005
Income-tax Officer, Ward- M/s Jaydeep Jewellerrs,
7(1), Ahmedabad. Main Bazar, Bareja, Ta.
Dascroi, Dist. Ahmedabad
Appellant Vs. Respondent
AND
ITA No. Asst. Year
3901/Ahd/2007 2001-2002
M/s Jaydeep Jewellerrs, Income-tax Officer, Ward-7(1),
Main Bazar, Bareja, Ta. Ahmedabad.
Dascroi, Dist. Ahmedabad.
Appellant Vs. Respondent
Revenue by: Shri G. S. Souryawansi, DR
Assessee by : Shri M. K. Patel, AR
ORDER
Per Mukul Kumar Shrawat, Judicial Member.
All the six appeals along with the Cross Objections have arisen from the identical orders of CIT(A) XIII, Ahmedabad, dated 25.5.2007. Since the facts and issues involved are identical in all these appeals and ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 Cross Objections, therefore, they are consolidated and hereby decided by this single order.
(A) Revenue's Appeals :-
2. Ground No.1 for all the years is in respect of addition under section 68 of the Income-tax Act. For Asst. Year 1999-00 Rs.5,11,224/-, A.Y. 2000-01 Rs.4,26,645/-, A.Y.2002-03 Rs.14,79,258/-, A.Y. 2003-04 Rs.19,87,086/- and A.Y.2004-05 Rs.56,560/- were respectively taxed.
3. A survey was conducted on 14.3.2005. The assessee firm is in the business of trading and job work of jewellery. During the course of assessment proceedings certain queries were raised in respect of the change in the accounts of the assessee. That change was noticed as per the revised return which was stated to be filed in compliance of notice u/s 148 of Income-tax Act, 1961(herein after the Act). The AO has found that the assessee had shown a certain loan liability out of which a sum of Rs.5,11,224/- pertained to the Asst. Year 1999-00. The assessee was asked to give the names and addresses of the depositors. As per the AO the requisite details were not furnished, therefore, for Asst. Year 1999-00 taxed a sum of Rs.5,11,224/- under section 68 of the Act.
4. Likewise for Asst. Year 2000-01 it was noticed by the AO that the assessee had shown deposits of Rs.7,78,057/-. In this regard the AO has also referred a statement of Mr. Rohit N. Soni which was recorded under section 133A of the Act dated 14.3.2005. The claim of the assessee was that the depositors have duly confirmed their respective deposits and by filing their confirmations the assessee had discharged its primary onus of their identity, genuineness and creditworthiness.2
ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
5. Almost identical was the situation in Asst. Year 2002-03. The AO has noticed that unexplained cash credits were to the tune of Rs.18,70,413/-.
6. For Asst. Year 2003-04 the unexplained cash credits were of Rs.25,07,606/- and for Asst. Year 2004-05 the amount of cash credits was Rs.7,49,012/-. For all the years against the said additions, appeals were filed for each year before the first appellate authority.
7. During the course of hearing before Ld. CIT(A) it was vehemently stated that the assessee has discharged the onus of proving the creditworthiness, identity of the creditors and genuineness of the transactions by furnishing their confirmation letters along with their PAN. To verify the same, ld. CIT(A) has called the present AO and on perusal of record it was found that the assessee has actually furnished the confirmations, complete addresses, PAN alongwith the copies of their contra accounts. The then AO has affirmed that those were filed through written submissions and available on record.
8. For Asst. Year 1999-00 on examination of relevant evidences ld. CIT(A) has deleted the addition of Rs.5,11,224/-.
9. For Asst. Year 2000-01 it was found that the depositors to the extent of Rs.3,51,412/- have appeared and affirmed the transactions, therefore, the ld. CIT(A) has deleted the addition up to that extent and the balance amount of Rs.4,26,645/- was confirmed.
10. For Asst. Year 2002-03 almost identical was the situation because ld. CIT(A) has found that only to the extent of Rs.3,91,155/- the assessee was able to discharge the primary onus to prove the genuineness of the 3 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 deposit hence it was deleted, however, rest of the amount of Rs.14,79,258/- being not established hence confirmed.
11. For Asst. Year 2003-04 out of the total addition of Rs.25,07,606/- a sum of Rs.5,20,520/- was deleted being the primary onus was discharged. However, in respect of the balance amount of Rs.19,87,086/- the action of the AO was confirmed.
12. In Asst. Year 2004-05 the position was that the total addition under section 68 was made of Rs.7,49,012/- but the assessee was able to establish the genuineness of the deposits to the extent of Rs.6,92,452/- hence the said amount was deleted and the balance of Rs.56,560/- was confirmed.
13. Now the Revenue is in appeal challenging the part relief granted by the ld. CIT(A) and the assessee is in Cross Objection in respect of the balance amount which was confirmed by the ld. CIT(A).
14. We have heard both the sides. We have carefully perused the orders of the authorities below. From the side of Revenue ld. DR Mr. Souryawansi has contested that the additions were made primarily because of the reasons that the assessee has failed to comply with the provisions of section 68. He has also contested that the assessee has made changes in the balance sheet after the survey and filed the revised accounts as per the returns filed in compliance of notice u/s 148 of the Act. According to his arguments law of estoppel should apply on the assessee because the return originally filed along with the balance sheet could not be allowed to be changed especially after the survey operation.
4ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
15. On the other hand, from the side of the respondent assessee, Mr. M. K. Patel has submitted that the requisite details, relevant confirmations and the PAN of all the depositors were duly furnished during the assessment proceedings. This fact was even affirmed by the AO before the ld. CIT(A). He has also replied that the law of estoppel could not be applied in the present situation because the assessee had to file a return in compliance of notice u/s 148 and in that return he was expected to file the true and correct position of accounts which were found at the time of survey operation.
16. Having heard the rival submissions we are of the considered view that the assessee has admittedly discharged its primary onus by furnishing the confirmation letters, relevant copies of accounts and the PAN of the respective parties. This fact was admitted by the AO before the ld. CIT(A). It was confirmed that on perusal of assessment record it was found that all those evidences and details were furnished by the assessee which were found placed in the assessment record. Once Revenue authorities as well as the first appellate authority have affirmed that the assessee has duly discharged its primary onus as prescribed u/s 68 of the Act by filing their confirmations, their identity, creditworthiness along with PAN of those parties, therefore, we find no fallacy in the view taken by the ld. CIT(A). It is pertinent to mention that only in respect of Asst. Year 1999-00 the total addition was deleted. However, in respect of rest of the years on verification of accounts and on the basis of confirmations by those respective parties, only part relief to the extent being satisfied was granted and rest of the amount which was not established as per the parameters under section 68 of the Act was confirmed. In view of this, for all the years grounds raised by the Revenue on this issue are hereby dismissed.
5ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
17. Apropos Ground No.2 for Asst. Year 1999-00 and 2000-01 it was noticed by the AO that partners have respectively introduced in their capital accounts fresh capital which was stated to be in the form of gold and silver. The explanation of the assessee was that such capital in the shape of gold and silver was introduced out of their ancestral property inherited. The facts have revealed that the statements of all the partners were recorded under section 131 of the Act. In their statements they have confirmed having introduced capital out of their individual source of income. It was also noted that the partners were individually subjected to tax. The explanation given by the assessee was not accepted by the AO and rejected the explanation regarding the source of gold and silver claimed to be ancestral family property and Stridhan. For Asst. Year 1999-00 an addition of Rs.4,89,848 was made and for Asst. Year 2000-01 addition of Rs.6,07,501/- was made. The matter was carried before the first appellate authority.
18. The ld. CIT(A) has examined the facts and primarily on the ground that the partners were independently subjected to tax and they have confirmed the said introduction of capital in their capital account as per the statement recorded under section 131 of the Act and that the source was stated to be out of the inherited gold and silver hence following few case laws held that the firm could not be assessed in respect of the capital introduced by the said partners. Reliance was placed on several decisions namely - (1) CIT vs. Metachem Industries 245 ITR 160 (M.P) and (2) ACIT vs. Patel Rajesh Kumar Kantilal 64 TTJ 460.
19. Having heard the submissions of both the sides as also on careful perusal of the findings of the authorities below once it was an admitted factual position that the partners are independently subjected to tax 6 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 and they have affirmed their respective capital account as per the statement recorded u/s 131 and also explained source of the said introduction of capital claimed to be out ancestral property in the shape of gold and silver, therefore, totality of the circumstances thus demonstrated that there was no fallacy in the view taken by ld. CIT(A). In our considered opinion he has rightly placed reliance on certain judgments, therefore, his view is hereby confirmed. This ground of the Revenue, is therefore, dismissed.
20. For Asst. Year 2000-01 ground no.3 is in respect of an addition of Rs.75,000/- pertaining to gift amount introduced in the capital account of the three partners of the firm. There were three credits of Rs.25,000/- in the accounts of the three partners of the firm. The explanation was that the said gifts were received by way of gifts from friends and relatives on the opening ceremony of the shop. It was explained that those gifts were received in their individual capacity. The AO was not convinced and held that the addition in the partners capital account was not duly supported by the evidences etc., hence taxed the entire amount in the hands of the firm.
21. While dealing with this ground ld. CIT(A) has relied upon his earlier decision on the same line that once the partners were independently subjected to tax and disclosed the necessary information as per their respective returns of income , therefore, should not be subject to tax again in the hands of the partnership firm.
22. On hearing both the sides and considering the entirety of the circumstances of the case we are also of the view that the ld. CIT(A) has rightly followed his earlier decision through which it was held, by placing reliance on few precedents, that once the partners have affirmed 7 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 through the statements recorded u/s 131 the introduction of capital in their respective capital accounts and also individually they were subjected to tax independently then there was no reason to take another view in respect of the impugned gifts introduced in their capital account. We hereby confirm the finding of ld. CIT(A) and dismiss this ground of Revenue.
23. Ground No.4 for Asst. Year 2000-01 is in respect of an addition of Rs.5,92,278/-, the undisclosed expenditure on dead stock and shop construction. The AO has observed that as per the old balance sheet the amounts towards assets side were as follows :-
(1) Dead stock Rs.332902/-
(2) Vehicle Rs.159181/-
(3) Building Rs.269179/-
----------------
Rs.751262/-
In the revised balance sheet a consolidated figure of rs.7,51,259/- was mentioned. However, on verification the break up was mentioned as follows :-
(1) Dead Stock Rs.132902/-
(2) Vehicle Rs.159181/-
(3) Building Rs.459156/-
------------------
Rs.751259/-
Since there was a change in the amounts, therefore, an explanation was called for. The AO has noted that no register for dead stock was maintained by the assessee. Since there was discrepancy in the building account also in the account of dead stock, therefore, in the absence of explanation of the source of construction in the shop the total of the two was taxed at Rs.5,92,078/-.
8ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
24. The ld. CIT(A) has held that as far as the cost of fixtures and furniture was concerned it was wrongly held as dead stock and the very basis of making the impugned addition suffered from infirmity. In respect of the expenditure incurred towards construction/renovation for shop it was held that the supporting vouchers were placed and the AO remained silent about the genuineness of these bills and vouchers, therefore, the addition was wrongly made. Now the Revenue has challenged those findings of ld. CIT(A).
25. We have heard both the sides at some length and also carefully perused the orders of the authorities below. We are not inclined to agree with the findings of ld. CIT(A). We have noted that there was change in the balance sheet as furnished by the assessee on two occasions. As per old balance sheet the value of the dead stock was stated to be Rs.3,32,902/- however, as per the revised statement it was reduced to Rs.1,32,902/-. About this discrepancy no satisfactory reply was furnished by the assessee and ld. CIT(A) had gone wrong in holding that the AO had wrongly presumed that it was the account of dead stock. However, as per the assessment order it was the assessee's balance sheet and it was assessee's explanation through which the AO had come to know that the said amount represented the dead stock. As against that, the ld. CIT(A) has given a finding that the said figure represented the cost of furniture and fixtures. On what basis he had arrived at the said conclusion is not clear from the judgment. However, ld. DR has vehemently contested that the assessee must not have changed the balance sheet in respect of the nomenclature of the assets. Naturally the assessee is aware about his affairs and, therefore, he has mentioned that the amount represented the 9 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 dead stock. It is assessee's onerous duty to explain the nature of the entries correctly and to bear the consequences if failed.
Like-wise in respect of the building a/c, earlier the figure was at Rs.2,59,179/- which was increased to Rs.4,59,156/-. The ld. CIT(A) has not mentioned about furnishing of any reconciliation in this regard. What was all those bills and vouchers which were allegedly examined by the ld. CIT(A) and how the amount under the head building had gone up and why it was not correctly disclosed in the old balance sheet at the first stance. We have not found any reasonable answer of these questions from the order of the ld. CIT(A). In our considered opinion the assessee has to demonstrate through bills and vouchers the nature of investment made in the building construction/renovation. Thereafter the next step is to establish the source of the funds. Further assessee is under strict obligation to reconcile the change in the figures of balance sheets. Because of these reasons we are of the view that the Revenue was rightly aggrieved by the said decision of ld. CIT(A), therefore, we deem it proper to restore this issue back to the stage of first appellate authority to examine afresh in the light of our observations made hereinabove, needless to say after providing adequate opportunity of hearing to both the sides. This ground is therefore allowed for statistical purpose.
26. For Asst. Year 2002-03 & 2003-04 ground No.2 is in respect of cash deposits in the bank of the assessee respectively amounting to Rs.11,49,000/- and Rs.25,30,000/-.
27. On examination of current account of Commercial Bank Ltd. it was noticed by the AO that certain cash deposits have been made. The AO has added all those cash deposits which were above Rs.50,000/- for both the years. When the matter had gone in appeal it was explained that sufficient 10 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 cash as well as sales receipts from job work were disclosed during the years under consideration and out of those receipts the assessee had deposited the amounts in question in bank. The ld. CIT(A) has accepted the explanation as per the following observations :-
"4.3 In order to decide the issue, I have carefully considered the various arguments of the ld. AR and have perused the assessment order. The appellant has obtained loans and advances to the extent of rs.18,70,413/- in cash out of which Rs.3,91,155/- has been accepted to be genuine as per the discussion in para 3.3 above. With the result, the balance of the deposits totaling to Rs.14,79,258/- i.e. (Rs.18,70,413/- minus Rs.3,91,155/-) are held to be the unaccounted income of the firm u/s 68 of the Act. It is not in dispute that all these deposits were introduced by the firm in their books of accounts in cash. The appellant thus can be said to have unaccounted cash of Rs.14,79,258/- and in the interest of justice and fair play, the cash deposited in the bank can be allowed to be set off against such addition. Since the total cash deposits relating to the current assessment year amounting to Rs.13,19,000/- are less than Rs.14,79,258/- having been separately confirmed in para 3.3 above, any further addition on account of the cash deposited in the bank would result into double addition. The addition of Rs.11,49,000/- is therefore, deleted."
Like-wise for Asst. Year 2003-04, assigning the same reasons, the addition was deleted.
28. After perusing the orders of the authorities below and on hearing both the sides we have found that the AO was not justified in making the addition of all those amounts which were found deposited in cash in the bank. It was an admitted factual position that the sales and the job receipts were received in cash and duly recorded in the books of accounts. Out of the said recorded receipts it was stated to be deposited in the bank. That explanation was not controverted by the Revenue. Therefore, in our considered opinion ld. CIT(A) has rightly 11 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 deleted the addition. We find no force in this ground of Revenue hence dismissed.
29. For Asst. Year 2004-05 the AO has made the addition of Rs.20,30,000/-, found deposited in cash in the current account of Kalupur Com. Co-op. Bank. When the matter was carried before ld. CIT(A) it was held that considering the sales of the year plus cash loans received etc.; still there was a shortage of cash to the extent of Rs.5,48,271/-. With the result the said addition of Rs.20,30,000/- was reduced to Rs.5,48,271/- as per following observation :-
"4.3 In order to decide the issue, I have carefully considered the various arguments of the ld. AR and have perused the assessment order. The appellant has obtained loans and advances to the extent of Rs.25,35,000/- in cash out of which Rs. 1.05,000^-have been accepted by the Assessing Officer and balance of Rs 6,92,452/- has been accepted to be genuine as per the discussion in para 3,3 above. With the result the balance of the deposits totalling to Rs.56,560/- are hold to be the unaccounted income of the firm u/s. 68 of the Act. It is not in dispute that all these deposits were introduced by the firm in their books of accounts in cash. The appellant thus can be said to have cash of Rs.7.49,012/- introduced through cash deposits and in the interest of justice and fair play, the cash deposited in the bank can be allowed to be set off against such cash and any further addition on account of the cash deposited in the bank would result into double addition.. This leaves [he balance of deposits to R».13,85,988/-(Rs.21,35,000 minus Rs.7,49,012/-). The appellant has declared cash sales of Rs.17,09,117/- apart from having job work income of Rs.1,03,808/-.The contention raised by the ld Authorised Representative that the appellant was depositing the cash sales and other income in its bank accounts is also fortified by the fact that all the purchases have b«n made through the cheques issued from the same bank account. The appellant has declared gross profit of Rs.7,33,909/- out of cash sales of Rs.17,09,117/-which can be said to be lying deposited in the bonk as surplus cash. Similarly, the job work income received in cash of Rs.1,03,808/- was deposited in the bank. The credit of cash of Rs. 8,37,717/-( Rs.7.33.909/- + Rs.l,03,808/-) thus can be allowed to the appellant in order to explain a part of the balance cash deposits of Rs13,85,988/-. The addition of the balance amount i.e. Rs.5,48,271/-(Rs.12
ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 13,85,988 minus Rs.8,37,717) is therefore, required to be confirmed . The appellant thus gets a relief of Rs.14,81t729/-."
30. After hearing the submissions of both the sides we are of the view that ld. CIT(A) has thoroughly examined the source of the cash deposits in the bank account and after considering the relevant information and the evidences he has rightly decided to grant part relief to the extent the assessee had tendered satisfactory explanation. We find no reason to interfere with those findings on facts hence confirm the verdict of ld. CIT(A) and dismiss this ground of Revenue.
(B) C.O. No.350/Ahd/2007 Asst. Year 2000-01
31. In this Cross Objection the assessee has raised following grounds:-
(1) The ld. CIT(A) has erred in treating the balance sheet and profit & loss account as books of account and confirming the addition on the basis of deposits as per original balance sheet whereas, no such deposits are appearing in the books of accounts.
(2) The ld. AO and the CIT(A) has erred in law and on facts in not accepting the revised trading a/c, P & L a/c and balance sheet filed with the return of income in response to notice u/s 148 of the Act, which are based on correct state of affairs. In view of facts, submission and evidences filed, the AO and the CIT(A) ought to have accepted the said revised accounts while ignoring the original accounts attached with the original return, the same being incorrect for the valid reasons stated in the submissions filed before the AO and the CIT(A).
(3) The ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs.4,26,645/- out of the total addition of Rs.7,78,057/- on account of cash credits being the difference between the closing and the opening balance as per the original balance sheet and which is not reflected in the books of account.
In view of the facts, submissions and evidences filed, the impugned addition of Rs.4,26,645/- also requires to be deleted.
C. O. No.351/Ahd/2007 Asst. Year 2002-03 13 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
32. In this Cross Objection following grounds have been raised :-
(1) The ld. CIT(A) has erred in treating the balance sheet and profit & loss account as books of account and confirming the addition on the basis of deposits as per original balance sheet whereas, no such deposits are appearing in the books of accounts.
(2) The ld. AO and the CIT(A) has erred in law and on facts in not accepting the revised trading a/c, P & L a/c and balance sheet filed with the return of income in response to notice u/s 148 of the Act, which are based on correct state of affairs. In view of facts, submission and evidences filed, the AO and the CIT(A) ought to have accepted the said revised accounts while ignoring the original accounts attached with the original return, the same being incorrect for the valid reasons stated in the submissions filed before the AO and the CIT(A).
(3) The ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs.14,79,258/- out of the total addition of Rs.18,70,413/- on account of cash credits being the difference between the closing and the opening balance as per the original balance sheet and which is not reflected in the books of account. In view of the facts, submissions and evidences filed, the impugned addition of Rs.14,79,258/- also requires to be deleted.
C.O. No.352/Ahd/2007 Asst. Year 2003-04
33. The assessee has raised following grounds in this cross objection :-
(1) The ld. CIT(A) has erred in treating the balance sheet and profit & loss account as books of account and confirming the addition on the basis of deposits as per original balance sheet whereas, no such deposits are appearing in the books of accounts.
(2) The ld. AO and the CIT(A) has erred in law and on facts in not accepting the revised trading a/c, P & L a/c and balance sheet filed with the return of income in response to notice u/s 148 of the Act, which are based on correct state of affairs. In view of facts, submission and evidences filed, the AO and the CIT(A) ought to have accepted the said revised accounts while ignoring the original accounts attached with the original return, the same being incorrect 14 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 for the valid reasons stated in the submissions filed before the AO and the CIT(A).
(3) The ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs.19,87,086/- out of the total addition of Rs.25.07,606/- on account of cash credits being the difference between the closing and the opening balance as per the original balance sheet and which is not reflected in the books of account. In view of the facts, submissions and evidences filed, the impugned addition of Rs.19,87,086/- also requires to be deleted.
C.O.No.353/Ahd/2007 Asst. Year 2004-05
34. In this C.O. the assessee has raised following grounds :-
(1) The ld. CIT(A) has erred in treating the balance sheet and profit & loss account as books of account and confirming the addition on the basis of deposits as per original balance sheet whereas, no such deposits are appearing in the books of accounts.
(2) The ld. AO and the CIT(A) have erred in law and on facts in not accepting the revised trading a/c, P & L a/c and balance sheet filed with the return of income in response to notice u/s 148 of the Act, which are based on correct state of affairs. In view of facts, submissions and evidences filed, the AO and the CIT(A) ought to have accepted the said revised accounts while ignoring the original accounts attached with the original return, the same being incorrect for the valid reasons stated in the submissions filed before the AO and the CIT(A).
(3) The ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs.56,560/- out of the total addition of Rs.7,49,012/- on account of cash credits being the difference between the closing and the opening balance as per the original balance sheet and which is not reflected in the books of account.
In view of the facts, submissions and evidences filed, the impugned addition of Rs.56,550/- also requires to be deleted.
(4) The ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs.5,48,271/- out of total addition of Rs.20,30, 000/- made by the AO on account of cash deposited in bank as unexplained without proper consideration and appreciation of the facts of the case. In view of the facts and 15 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 submissions filed as well as legal position, the impugned addition of Rs.5,48,271/- requires to be deleted.
35. In all these Cross Objections almost in identical manner the cross objector has challenged the findings of ld. CIT(A). The balance sheet and profit and loss account were considered, only thereafter part relief was granted while deciding some of the grounds of the assessee. Rather it is wrong on the part of the cross objector to raise this ground that the revised trading and profit and loss accounts have not been accepted by the ld. CIT(A). We have observed that the ld. CIT(A) has duly considered the revised accounts and thereafter decided each ground as deemed fit. We find no force in the ground Nos.1 & 2 of the cross objector and, therefore, dismiss the same.
36. Through Ground No.3 in all the Cross-Objections the part relief in respect of the cash credits is challenged. However, we have already discussed the veracity of the part relief granted by the ld. CIT(A) and confirmed the same. Since the assessee has failed to furnish the necessary information as prescribed u/s 68 in respect of some of the deposits, therefore, ld. CIT(A) has rightly held that the onus as prescribed u/s 68 was not properly discharged. In view of this, ground No.3 for all the cross objections is hereby dismissed.
36.1) For A.Y.04-05 in cross-objection the asessee has challenged the part relief granted by the Ld.CIT(A) in respect of the cash deposits in a bank. After considering the over all circumstances we have upheld the view taken by CIT(A) as above while deciding the appeal of the Revenue. Consequently this ground is also dismiussed.
(C) ITA No.3901/Ahd/2007 Asst. Year 2001-02 (assessee's appeal) 16 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005
37. This appeal is barred by 77 days. An application for condonation of delay along with an affidavit dated 28.Jun 2010 from one Shri Bhogilal S. Ranpara has been filed. The contents of the Affidavit are as under :-
"I, the undersigned Bhogilal Sukhlal Ranpara, aged 69 years, residing at "Suraj", 8/14, Gundawadi, Rajkot, affirm and state as under :
1. I was employed as an accountant with M/s Jaydeep Jewellers, Bareja in the C.Y.2007. I was attending to the accounts work as well as attending to Chartered Accountant for Income-tax work.
2. In the year 2007, I had collected the Appeals along with challans to be submitted to Hon. Income-tax Appellate Tribunal for the assessment years 1999-00 to 2004-05.
3. I had collected the appeals and challans and kept in the drawer of my table where I was working.
4. I left the job with effect from 01.08.2007 and I forgot to inform the partners of the firm regarding ITAT appeal papers and challans collected by me from Chartered Accountant.
5. Whatever stated above is true to the best of my knowledge and belief."
38. We have heard the parties and perused the material on record. After considering the facts and circumstances of the case, we condone the delay and admit the appeal for hearing.
39. Ground Nos.1 & 2 are identical as raised in the Cross Objections by the assessee. We have already assigned our reasons that these grounds have no force, therefore, for this appeal as well these two grounds are hereby dismissed.
40. The only ground left is ground No.3 which is reproduced below:
(3) The ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.2,54,629/- on account of cash credits being the 17 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 difference between the closing and the opening balance as per the original balance sheet and which is not reflected in the books of account. In view of the facts, submissions and evidences filed, the impugned addition of Rs.2,54,629/- requires to be deleted.
41. After hearing the submissions of both the sides the main distinction noticed by ld. CIT(A) in respect of the cash credit addition for the year under consideration was that no confirmation or related evidences were filed before the AO as it was filed in respect of the other years. The concerned AO was present before the ld. CIT(A) and on perusal of the assessment record it was informed that the assessee had not filed any written confirmation in respect of the deposits introduced during the year amounting to Rs.2,54,629/-. Because of these reasons ld. CIT(A) has confirmed the addition as is evident from the following observations:-
"3.3 In order to decide the issue, I have carefully considered the various arguments put up by the ld. AR in this regard and have also perused the assessment order. While the AO has held all the deposits introduced during the year aggregating to Rs.2,54,629/- to be unexplained on the ground that the appellant has failed to furnish any evidence in the form of their names, complete addresses, PANos. And copies of their contra accounts etc., the ld. AR on the other hand emphatically argued that written confirmations in respect of all the deposits were duly submitted before the ld. AR through their letters dated 23/8/06, 10/11/2006 and 16/12/2006 and the observations of the AO in this regard are therefore, factually incorrect. In order to verify such contention of the ld. AR, the present AO Ms. Latha V. Kumar was requested to confirm whether any confirmations of the deposits introduced during the current assessment year were filed or not. On perusal of the records, she has confirmed that the contention of the ld. AR raised in this regard is not correct because the appellant did not file any written confirmations of the depositors totaling to Rs.2,54,629/- introduced during the year. She has further confirmed that these depositors were called by the then AO in person but again they did not file any evidence in this regard. In this background of the matter where the appellant has not been able to prove the genuineness and creditworthiness of the deposits, the primary onus casted on the appellant in terms of section 68 of the Act cannot be said to be duly discharged. It is therefore, held that the appellant was not able to discharge the primary onus to prove the genuineness of these deposits and addition of Rs.2,54,629/- made on this account is therefore liable to be confirmed.
The alternative contention of the AR that no addition at the first place could be made as these are not appearing in their books of accounts is not tenable because all 18 ITA Nos.3525, 3526/Ahd/2007 & others and CO Nos.350 to 353/Ahd/2007 Asst. Years 1999-2000 to 2004-2005 these deposits are appearing in the original balance sheet which was prepared on the basis of entries reflected in their regular books of accounts."
Even before us, the assessee has not improved its case and since the revenue authorities have given a finding that the requisite confirmations etc. were not furnished as prescribed u/s 68, therefore, we find no fallacy in the order of ld. CIT(A). This ground of the assessee is dismissed and the cross objection is dismissed.
42. In the result -
ITA No.3525/Ahd/2007 Asst. Year 1999-2000 (Revenue's appeal) isdismissed.
ITA No.3526/Ahd/2007 Asst. Year 2000-2001 (Revenue's appeal) ispartly allowed for statistical purposes.
ITA No.3527/Ahd/2007 Asst. Year 2002-03 (Revenue's appeal) isdismissed.
ITA No.3528/Ahd/2007 Asst. Year 2003-04 (Revenue's appeal) isdismissed ITA No.3529/Ahd/2007 Asst. Year 2004-05 (Revenue's appeal) is dismissed ITA No.3901/Ahd/2007 Asst. Year 2001-2002 (assessee's appeal) is dismissed.
All the four Cross Objections filed by the assessee are dismissed.
Order was pronounced in open Court on 11.3.11.
Sd/- Sd/-
(G.D. Agrawal) (Mukul Kr. Shrawat)
Vice President Judicial Member
Ahmedabad,
Dated : 11/3/11
Mahata/-
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ITA Nos.3525, 3526/Ahd/2007 & others
and CO Nos.350 to 353/Ahd/2007
Asst. Years 1999-2000 to 2004-2005
Copy of the Order forwarded to:-
1. The Assessee.
2. The Revenue.
3. The CIT(Appeals)-
4. The CIT concerns.
5. The DR, ITAT, Ahmedabad
6. Guard File.
BY ORDER,
Deputy/Asstt.Registrar
ITAT, Ahmedabad
1.Date of dictation 7/3/2011
2.Date on which the typed draft is placed before the Dictating 8/3/ 2011 Member................Other Member................
3.Date on which the approved draft comes to the Sr.P.S./P.S.............
4.Date on which the fair order is placed before the Dictating Member for pronouncement..............
5.Date on which the fair order comes back to the Sr.P.S./P.S...............
6.Date on which the file goes to the Bench Clerk...........
7.Date on which the file goes to the Head Clerk.............
8.The date on which the file goes to the Asstt. Registrar for signature on the order........................
9.Date of Despatch of the Order.................
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