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IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD,
"SMC" BENCH
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BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT
ITA No.5/Ahd/2011
[Asstt.Year : 2003-2004]
Shri Dilipbhai Vaghjibhai Patel /Vs. ITO, Ward-9(1)
Block No.1, Gala No.3 Surat.
Ashwin Society Bhat ni Wadi
Varachcha Road, Surat.
PAN : ADSPP 6006 C
( / Appellant) (× / Respondent)
[ / : Shri Ronak Parekh
Assessee by
/ : Shri D.K. Mishra, Sr.DR
Revenue by
/ : 18th December, 2013
Date of Hearing
/ :
Date of Pronouncement 03-02-2014
/ O R D E R
This appeal of the assessee for the assessment year 2003-04 is
directed against the order of the CIT(A)-V, Surat dated 12.03.2010.
2. The ground nos.1, 2 and 3 of the assessee are as under:
"1. On the facts and in the circumstances of the case as well as
law on the subject, the ld.CIT(A) has erred in applying provisions
of sec. 147 & 148 of the Act.
2. On the facts and in the circumstances of the case as well as law
on the subject, the ld.CIT(A) has erred in giving reasonable
ITA No.5/Ahd/2011
opportunity of being heard and hence addition of income and
thereby made addition and taxing the same as income of the
assessee which is against the law of natural justice and equity.
3. On the facts and in the circumstances of the case as well as
law on the subject, the ld.CIT(A) has erred in treating business of
the assessee and not applying provisions of sec. 44AD of the Act."
3. The learned counsel for the assessee submitted that the reopening
was made within four years from the end of the assessment year and the
assessment was framed under section 144 of the Act. He submitted that
the provision of section 44AD of the Act should have been applied to the
facts of the case of the assessee. The learned DR opposed the
submissions of the learned counsel for the assessee.
4. I have considered rival submission. I find that the reopening in this
case is valid as the reopening is within four years from the end of the
relevant assessment year and the assessment was framed under section
144 of the Act due to non-cooperation on the part of the assessee. No
cogent reason for applicability of section 44AD of the Act could be given
by the assessee. Accordingly, the ground nos.1, 2 and 3 of the assessee's
appeal are dismissed.
5. The ground no.4 of the assessee's appeal is as under:
"4. On the facts and in the circumstances of the case as well as
law on the subject, the ld.CIT(A) has erred in treating
disallowance of expenses of Rs.27,948/- and thereby made addition
and taxing the same as income of the assessee."
6. The learned counsel for the assessee submitted that the
disallowance of 25% of the purchase was made by the AO which was
restricted to 10% of the total expense at `27,948/- by the CIT(A). He
submitted that no reason for the disallowance was given by the
ITA No.5/Ahd/2011
department. The learned DR has relied on the orders of the AO and the
CIT(A).
7. I have considered rival submissions and perused the orders of the
AO and the CIT(A). I find that in the facts and circumstances of the case,
the disallowance restricted to 10% of the total expenses at `27,948/- was
quite reasonable, which is confirmed and the ground no.4 of the assessee
is dismissed.
8. The ground no.5 of the assessee's appeal is as under:
"5. On the facts and in the circumstances of the case as well as
law on the subject, the ld.CIT(A) has erred in treating unexplained
credits in to capital account for Rs.17,345/- and thereby made
addition and taxing the same as income of the assessee."
9. The learned counsel for the assessee submitted that the
disallowance under this head was restricted to `17,345/- by the CIT(A).
He submitted that there is no valid reason for confirmation of part
disallowance made by the AO. The learned DR has relied on the orders
of the AO and the CIT(A). I have considered rival submissions. I find
that major portion of the addition on account of agricultural income from
agricultural land received in inheritance after the death of father of the
assessee was deleted by the CIT(A). The balance addition made was due
to unexplained credit in the capital account on account of miscellaneous
gifts and mutual fund refund, which could not be proved by the assessee.
In these facts, I find no merit in the ground no.5 of the assessee, which is
accordingly dismissed.
10. The ground no.6 of the assessee's appeal is as under:
ITA No.5/Ahd/2011
"6. On the facts and in the circumstances of the case as well as
law on the subject, the assessing officer has erred in making
addition of unexplained investment of Rs.1,67,200/-"
11. The learned counsel for the assessee submitted that there were nine
entries of loans & advances on the assets side of the balance sheet of the
assessee and the interest on such loans & advances has been shown by the
assessee in its computation of total income, and therefore, no case of
addition of this amount, as unexplained investment, could be made out by
the Revenue. The learned DR has referred to the relevant portions of the
assessment order and the CIT(A)'s order in support of the case of the
Revenue.
12. I have considered rival submission and perused the orders of the
AO and the CIT(A). I find that there were nine entries of loans &
advances in the assets side of the balance sheet filed of the assessee.
None of these entries was found to be outside the books of accounts of
the assessee. The CIT(A) has recorded a finding that undisputedly these
assets are shown in the balance sheet of the assessee. It is not explained
by the Revenue that what further proof or evidence regarding source of
investment was required to be submitted by the assessee, when the asset
was already shown in its balance sheet filed in the statement of account
duly audited by the Chartered Accountant. In these facts of the case, I
hold that there is no valid reason to make the aforesaid addition by
holding the unexplained investment in the hands of the assessee, which is
according deleted and the ground no.6 of the assessee is allowed.
13. In the result, the appeal of the assessee is partly allowed.
Order pronounced in Open Court on the date mentioned hereinabove.
Sd/-
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(../G.C. GUPTA)
Ú¢ /VICE-PRESIDENT
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