9911796707
TMI Blog2012 (12) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of assessment particulars of some of the persons in whose names a part of the FDRs stood, did not establish the nexus of even these FDRs with the said persons and did not discharge the onus cast by section 106 and 110 of the Indian Evidence Act r.w.s. 69A of the Income-tax Act. 1(b) The ld. CIT(A) further failed to appreciate that the FDRs constituted valuables and hence the cash value of these FDRs was liable to be added u/s.69A of the Act in the year in which the assessee was found to be the owner of these valuables within the meaning of this provision and not in the year in which these valuables were acquired. 1(c) Without prejudice, the CIT(A) failed to appreciate that in the letter of the assessee dated 23-12-2005 relied upon by him (page 3 of his order), the PAN or any other income tax particular is not mentioned in respect of six persons in whose names eleven FDRs of the cash value of Rs.4,97,374/- stood and there was no such letter dated 21-04-2003 as referred by the CIT(A) on page 9 of his order, which rendered the aforesaid amount of Rs.4,97,374/- as liable to addition u/s 69A in any case. 2(a) On the facts and in the circumstances of the case and in law, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the source of those fixed deposits and it was mentioned by the AO that those fixed deposits belonged to friends and relatives, claimed to have been staying abroad. It was informed to the AO that the FDRs were placed with the assessee only to manage the money. As per AO on enquiry from the Bank the said statement of the assessee could not be corroborated. He has concluded that; in the absence of proof and the identity of the real holders; the said deposits were the undisclosed income of the assessee. The entire amount of Rs.32,99,383/- was accordingly taxed. The matter was carried before the first appellate authority. 3. An elaborate explanation was furnished to the CIT(A) who has in turn called for a remand report and those information were sent for requisite confirmation. Ld.CIT(A) has considered the remand report and the explanation of the assessee in the light of few case laws; namely, CIT vs. Roshanlal Sheth (1989)178 ITR 660 (P&H) and CIT vs. Lakshman Swarup Gupta & Bros., (1975) 100 ITR 222 (Raj.) and, thereafter, deleted the addition as per the following observations:- "7. I have considered the rival submissions. It is observed that the issue involves two sets of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-3-2006. However, I was told to give explanation of the above paper tomorrow. We registered out dissatisfaction of not giving us copy of loose papers found and impounded by the survey party even though we have requested to supply photo copy of those papers. This amounts to not giving proper opportunity and time to explain our stand on various papers and issues raised on such papers". The appellant furnished the details through this letter after recording its grievance and dissatisfaction in the form of tabulated information signed by the Senior Branch Manager, Bank of Baroda, Mehlav. This information was sent to the Assessing Officer along with the appellant's submissions for examination and comments in the remand report. It is observed from the remand report dated 16-1- 2007 that Smt.Kokilaben V.Patel and Shri Vikrambhai M.Patel had been summoned by the Assessing Officer on 10-1-2007 and their statement was recorded wherein they have categorically confirmed their earlier explanation. It is further observed from the remand report that the Assessing Officer has not made any adverse comments in this regard. The appellant has argued, in these circumstances that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what circumstances the Assessing Officer chose to make the addition since the appellant had given the names of the owners of the FDRs, their PAN and the proof of filing their IT returns along with certificate from the bank and details of reference of the old FDRs representing the source of investment in the FDRs found out during the survey. It is pertinent to point out that in the remand report also the Assessing Officer has not made any remark, what to say of any adverse remarks. The only comments made in this regard are "regarding the rest of the FDRs amounting to Rs.12,21,689/-, the assessee was unable to substantiate its claim to be correct during the course of assessment proceedings, inspite of sufficient time and opportunity been given by the then Assessing Officer. Therefore, Assessing Officer's view may hold as it is". It is to be noted from here that no fresh enquiries have been made. After examining the entire material available on record, the Assessing Officer seems to have entertained no reason to doubt the correctness and genuineness of the appellant's claim and has, therefore, simply referred to the past proceedings. Under the circumstances, the appellant's contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was informed that the FDRs belonged to family members out of which some of them stated to be staying outside India. Since the funds of those relatives are managed by the assessee, therefore the FDRs were found in possession of the assessee. It has also been noted by the ld.CIT(A) that during remand proceedings Smt.Kokilaben V.Patel and Shri Vikrambhai M.Patel were summoned by the A.O. and the statement was recorded. As per the recorded statement, those persons have categorically confirmed their ownership on FDRs. Since on some of the vital points, the AO remained silent in his remand report, hence the ld.CIT(A) has considered the explanation as offered by the assessee. In respect of the other set of FDRs of Rs.12,21,689/- details were furnished in respect of the PAN of those FDR holders, name of the Bank, the original amount of deposit, the date of maturity and the details of renewal of those FDRs. A clear finding was given by ld.CIT(A) that the AO had not been able to conclusively prove that those FDRs were in fact the property of the firm. Under the totality of the circumstances of the case, we hereby affirm the factual as also legal finding of the first appellate authority an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has not raised any doubt about the same except that on personal visit the Income-tax Inspector found that Ambica Trading Co. was not existing in Sunhoula. However, the appellant has claimed that he had left Sunhoula and was operating from Bhagalpur, a fact which it had conveyed to the Assessing Officer through its letter dated 11-10-2006 sent by fax. But it is seen that the Income-tax Inspector has not recorded any written confirmation from the local resident/s of Sunhoula in this regard. It is pertinent to point out in this context that the appellant has questioned the relevance and correctness of the inspector's report in these circumstances. It is thus seen that the claim by the appellant of sale of 2687 bags of tobacco to Ambica Trading Co., partial lifting of 1600 bags of tobacco by it and the fact of not lifting of balance 1087 bags from the Mehlav Godown has gone unchallenged by the Assessing Officer. It is also pertinent to note that the Assessing Officer has not doubted the fact of the total sale figure of 2687 bags of tobacco to Ambica Trading Co. It is further noted that the Assessing Officer in the remand report has not questioned or doubted the appellant's claim tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No.5, an enquiry was made in respect of the stock lying in the three go-downs belonging to the assessee-firm. It was stated that stock belonged to Ambica Trading Co. out of the total sales made. It has also been stated that goods were sold to Pinak Pani Traders and part of the bags were yet to be delivered. Ld.CIT(A) has specifically stated that in the remand report the AO had not questioned or doubted the above facts. The appellant's claim of partial lifting of stock or partial delivery of stock was not contradicted by the AO. Thus, the totality of the circumstances warrants to affirm the factual findings of the CIT(A). These grounds of the Revenue are, therefore, dismissed. 8. Apropos to Ground No.3(b), the first appellate authority has taken a view as under:- "As regards the addition on account of excess tobacco dust of 68,638 KG, short kandi stock of 8905 KG and short pashari stock of 16,655 KG valued at Rs.68,638/-, Rs.2,65,369/- and Rs.4,96,319/- respectively, it is observed that the apparent difference in stock noticed on the day of the survey had been reconciled by the appellant in the form of detailed working sheet filed along with the letter dated 11-3-2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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