Bhagwanji Gopalji Chauhan, Navsari vs Assessee

सुनवाई क तार ख/Date o f Hearing : 1 6/06/2015 घोषणा क तार ख /Date o f Prono unceme nt: 19/06/2015

आदेश /O R D E R

PER S.S. GODARA, JUDICIAL MEMBER

This assessee's appeal for A.Y.2003-04, arises from order of CIT(A), Valsad dated 27.01.2011 passed in case no.CIT(A) VLS/329/05-06, restricting unaccounted cash addition of Rs.3,35,393/- to Rs.2,20,000/-, in proceedings under section 143(3) of the Income Tax Act, in short 'the Act'.

2. The assessee-individual is in laundry and dry cleaning business. The department conducted a survey in his business permises on 21.2.2003. It came across alleged incriminating documents such as loose paper, computerized books of account ITA No.1680/Ahd/2011 Bhagwanji Gopalji Chauhan For A.Y.2003-04 -2-

showing FDRs, KVPs and NSCs etc in the names of assessee's family members. A cash amount of Rs.3,35,393/- was also found which was not explained in the books. The assessee appears to have disclosed additional income of Rs.10 lacs over and above the regular one as per his statement recorded. However, he filed his return admitting the said income of Rs.1,70,000/- only. The Assessing Officer took up scrutiny and sought for reasons thereof. The assessee retracted from his statement. He pleaded that there was no undisclosed income supported by any record in his case. The Assessing Officer heavily relied in assessee's statement in assessment order dated 28.2.2006 retracted after almost twenty months after the date of survey and made an addition of Rs.8,30,000/- i.e. Rs.10 lacs - 1.70 lacs in assessment order.

3. The assessee preferred an appeal. We find that the CIT(A) accept his explanation qua the aforesaid addition of Rs.8,30,000/- and holds that cash amount of Rs.3,35,393/- detected during the survey was explained only to the extent of Rs.1,15,393/-. He observes that the assessee has shown low withdrawals in his case. The findings under challenge read as under:

"I have carefully gone through the assessment order and also the submissions made by the Id.AR. I have also perused the Remand Report submitted by the AO and the contents of the Paper Book, The short point here to be decided is whether the addition of Rs. 3,30,000/-

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made by the AO is sustainable? As mentioned earlier, the additions made was on the basis of incrimination loose sheets, FDRs. NSCs. KVPs and the unaccounted cash found in the course of survey and the statement recorded at that time. During the appellate proceedings the ld. AR submitted details of investments both movable and immovable made in the name of the appellant and in the name of partners and their family members. It is a fact that though the AO got the opportunity to strengthen the addition by offering suitable comments on the materials given by the appellant in the paper book, the AO took the same stand taken in the assessment order. The disclosure amount of 10,00,000/- was not matched with the corresponding assets and investment in this case. At the same time, the submissions made by the appellant cannot be ignored. With regards to the FDRs, NSCs, KVPs etc. found during the survey, the appellant's letters to the AO dated. 12.10.2004 and 20.02.2006 are most important. In the letter dated 12.10.2004 address to the AO, the appellant had submitted inter-alia bank details, PAN details, investments details and the deposits in the name of family members and relatives. Some of the FDs are carry forward from the years 1993, 1997, 2000, 2001 onwards. The details in this regards do not suggest that these FDs are benami and belong to the appellant. Similarly, the IVPs & NSC chart shows that they are duly recorded by the appellant and his family members. That leaves the unaccounted cash. I have perused the withdrawals made by the appellant and the family members. There seems to be low withdrawals. The unaccounted cash was not explained to the satisfaction. Therefore, the cash detected should be treated as concealment. Before me the appellant could establish source for cash amount of Rs.1,15,393/- out of Rs.3,35;393/- detected during the survey. Therefore, the balance amount be added to the income of the appellant. Thus, the AO is directed to recompute the income of the appellant as per the above findings. This ground of appeal is partly allowed."

4. We have heard both sides. The lower appellate order has added a sum of Rs.2,20,393/- out of the total cash found of Rs.3,35,393/- on account of low withdrawals. We find from the CIT(A) order challenge that there are no reasons with supportive evidence are forthcoming for arriving at this conclusion. We reiterate that the Assessing Officer added the ITA No.1680/Ahd/2011 Bhagwanji Gopalji Chauhan For A.Y.2003-04 -4-

unaccounted income of Rs.8,30,000/- (supra) without examining the assessee's withdrawal patterns. In these circumstances, we hold that the findings under challenge are without any evidence. The assessee has also fails to produce his withdrawals details. We hold in these peculiar circumstances and hold that instead of remanding the matter for one more innings, larger interest of justice would be met in case the impugned addition of Rs.2,20,000/- is restricted to Rs.1 lac only. This order shall not be taken as a precedent. The assessee's sole substantive ground partly succeeds.

5. The assessee's appeal is partly allowed.

Order pronounced in the Court on this day, the 19th June, 2015 at Ahmedabad.

Sd/- Sd/- (N.S. SAINI) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 19/06/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT

4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad