Shri Kalpesh K.Patel, Ahmedabad V. The ACIT.,Cent.Circle-2(4), Ahmedabad

CO 216/AHD/2011

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2605 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVAS T BIDARI
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Document seized; Retraction; Documents seized
• Section: 69; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ASSESSEE BY : NONE REVENUE BY : SHREE NIVAS T. BIDARI, CIT-DR / DATE OF HEARING : 30/11/2016 / DATE OF PRONOUNCEMENT: 09/12/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- IT(SS)A NOS. 433 & 434/AHD/2011 ARE THE APPEALS FIL ED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-III, A HMEDABAD DATED 08.06.2011 AND 09.06.2011 FOR AY 2003-04 AND 2009-10 RESPECTIV ELY. ITA NO.2030/AHD/2011 IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-III, AHMEDABAD DATED 09.06.2011 FOR AY 2009-10 AND CO NO.216/AHD/2011 IS THE CROSS-OBJECTION THEREOF FILE D BY THE ASSESSEE. 2. AT THE TIME OF HEARING, NONE APPEARED FOR THE AS SESSEE DESPITE SERVICE OF THE NOTICES; CONSEQUENTLY THESE APPEALS ARE DECI DED EX-PARTE QUA ASSESSEE AFTER HEARING THE LD. DR AND PERUSING THE MATERIAL AVAILABLE ON RECORD. IT(SS)A NO. 433/AHD/2011 ASSESSEES APPEAL FOR AY 2003-04 3. THE EFFECTIVE GROUNDS RAISED ARE TO THE EFFECT T HAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING FOLLOWING ADDITIO NS:- SN ITA/IT(SS)A/CO NO. AY APPELLANT RESPONDENT 1 IT(SS)A NO. 433/AHD/2011 2003-04 SHRI KALPESH KANTILAL PATEL, E/17, SUN TRACK FLATS, K.K. NAGAR ROAD, GHATLODIA, AHMEDABAD-380061 PAN : AWQPP 7965 B ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD 2 IT(SS)A NO. 434/AHD/2011 2009-10 ASSESSEE REVENUE 3 ITA NO. 2030/AHD/2011 2009-10 REVENUE ASSESSEE 4 CO NO. 216/AHD/2011 2009-10 ASSESSEE REVENUE ITA NO. 433, 434, 2030 & CO NO.216/AHD/2011 KALPESH KANTILAL PATEL VS. ACIT AY : 2003-04 & 2009-10 2 (I) OPENING BALANCE OF THE PRECEDING YEAR, I.E. AY 2002-03 AMOUNTING TO RS.5,16,356/- FOR WHICH THE DETAILS WERE FURNISHED; (II) CONFIRMING INCOME EARNED DURING THE YEAR 2001- 02 OF RS.45,556/-; (III)IN CONFIRMING THE INVESTMENT OF RS.7,20,000/- MADE AGAINST WHICH INCOME EARNED OF RS.4,60,800/- RELATING TO ASSESSME NT YEAR 2009-10. IT(SS)A NO. 434/AHD/2011 ASSESSEES APPEAL FOR AY 2009-10 4. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL ARE TO THE EFFECT THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN:- (I) CONFIRMING THE ADDITION OF FOLLOWING AMOUNTS WH ICH WERE ALREADY CONSIDERED AS INCOME IN EARLIER YEARS AND WRONGLY A SSUMED TO BE INCOME OF AY 2009-10. A. BROKERAGE INCOME - RS.3,13,000/- B. WITHDRAWAL FROM BANK - RS.2,00,000/- C. CARRIED FORWARD AMOUNT - RS. 50,000/- D. FOR CAR - RS. 20,000/- (II) CONFIRMING ADDITION U/S 69 OF THE ACT, AMOUNTI NG TO RS.45,142/-; (III) CONSIDERED INVESTMENT OF RS.7,20,000/- AGAINS T WHICH INCOME OF RS.4,60,800/- WAS EARNED OF THE AY 2009-10, BUT IN FACT THE INVESTMENT WAS MADE IN THE YEAR PRIOR TO ACCOUNTING YEAR 2002- 03 AND INCOME WAS EARNED THEREON OF RS.4,60,800/- IN THE SAME YEA R. ITA NO. 2030/AHD/2011 REVENUES APPEAL FOR AY 200 9-10 5. IN THIS APPEAL BY THE REVENUE, FOLLOWING GROUNDS ARE RAISED:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS.42,52,000/- OUT OF TOTAL ADDITIONS OF RS.61,15,000/- MADE BY AO RELYING ON THE NOTING IN THE SEIZED MATERIALS AND THE SUBMISSIONS MADE BY THE ASSESSEE WHICH WERE NOT CORROBORATED WITH EVIDENCE AND THE IDENTITY AND CREDITWORTHINESS OF THE PERSONS MENTIONED IN THE SEIZED DOCUMENTS COULD NOT BE PROV ED BY THE ASSESSEE. ITA NO. 433, 434, 2030 & CO NO.216/AHD/2011 KALPESH KANTILAL PATEL VS. ACIT AY : 2003-04 & 2009-10 3 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE AS HE DID NOT CONSIDER THE UNACCOUNTED INCOME ADMITTED BY THE ASSESSEE DURING THE COURSE OF SEARCH WHICH WAS RETR ACTED AFTER MORE THAN A MONTH AS AN AFTERTHOUGHT WITHOUT GIVING ANY CONCRET E EVIDENCE. CO NO. 216/AHD/2011 BY ASSESSEE - AY 2009-10 6. IN THIS CROSS-OBJECTION, THE ASSESSEE HAS RAISED FOLLOWING GROUND:- THE LD. COMMISSIONER OF INCOME TAX (A) HAS GIVEN TH E RELIEF OF RS.42,52,000/- INSTEAD OF RS.60,15,000/-. I HAVE A LSO FILED AN APPEAL FOR THE RELIEF OF ANOTHER DIFFERENTIAL AMOUNT OF RS.17,63,0 00/-. 7. THE BRIEF FACTS ARE A SEARCH ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 23.05.2008 IN THE GROUP CASES OF ADI AVIRAT GROU P. A WARRANT OF AUTHORIZATION U/S 132 WAS ISSUED IN THE NAME OF THE ASSESSEE. THE ASSESSEE IS A CONSTITUENT OF THE GROUP. 7.1 LD. DEPARTMENTAL REPRESENTATIVE CONTENDS THAT T HE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS WAS NON-COOPERATIVE AND NO DETAILS ABOUT THE SOURCE AND MANNER OF ACCUMULATING OPENING BALANCE F ROM EARLIER YEARS WERE FURNISHED. THE LD. AO WAS CONSTRAINED TO MAKE THE ADDITIONS WHICH WERE CHALLENGED BY THE ASSESSEE IN FIRST APPEAL. 7.2 DURING THE COURSE OF SEARCH IN THE STATEMENT RE CORDED U/S. 132(4), THE ASSESSEE ADMITTED UNACCOUNTED INCOME OF RS. 61,60,0 00/-. THIS DISCLOSURE WAS SUBSEQUENTLY RETRACTED BY THE ASSESSEE ON THE G ROUND THAT NO INCRIMINATING DOCUMENTS WERE FOUND FROM HIS PREMISE S. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FAILED TO CO RROBORATE THE RECEIPT AND PAYMENT ENTRIES AS PER ANNEXURE-A-1/1 OF THE SEIZED DOCUMENTS. THE DIFFERENCE OF THE ENTRIES AMOUNTING TO RS. 60,15,00 0/- WAS ADDED TO THE TOTAL INCOME AS UNEXPLAINED CASH CREDIT. 7.3 AS MENTIONED ABOVE, BEFORE THE LD. AO NO SATISF ACTORY EXPLANATIONS WERE GIVEN; HOWEVER, LD. CIT(A), RELIED ON THE EXPL ANATION FURNISHED BY THE ITA NO. 433, 434, 2030 & CO NO.216/AHD/2011 KALPESH KANTILAL PATEL VS. ACIT AY : 2003-04 & 2009-10 4 ASSESSEE, GAVE SUBSTANTIAL RELIEF. THE FINDINGS O F THE LD. CIT(A) ARE NOT CORRECT AS DURING THE SEARCH PROCEEDINGS THE ASSESS EE HAD ADMITTED RS.61,60,000/- AS HIS UNACCOUNTED INCOME WHICH WAS RETRACTED VIDE LETTER DATED 5TH JULY, 2008. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS IN FACT ADMITTED RS. 61,60,000/- AS HI S UNACCOUNTED INCOME DURING SEARCH PROCEEDINGS THEREAFTER RETRACTED HIS STATEMENT ON 5TH JULY, 2008 WHICH IS MORE THAN A MONTH AFTER THE SEARCH. T HE ITAT AHMEDABAD BENCH 'C' IN THE CASE OF MANHARLAL KASTURCHAND CHOK SHI V. ASSISTANT COMMISSIONER OF INCOME-TAX, HAD HELD THAT IF IN COU RSE OF SEARCH, ASSESSEE, IN HIS STATEMENT UNDER SECTION 132(4), MADE A VOLUN TARY DISCLOSURE REPRESENTING UNACCOUNTED INVESTMENTS AND CASH BUT A FTER OVER TWO MONTHS RETRACTED THEREFROM STATING THAT STATEMENT WAS MADE UNDER PRESSURE THEN IN ABSENCE OF ANY EVIDENCE TO SHOW THAT ASSESSEE HAD M ADE DISCLOSURE UNDER DURESS, PRESSURE AND COERCION, RETRACTION AFTER A L APSE OF OVER TWO MONTHS WAS AN AFTER-THOUGHT AND, THEREFORE, ADDITION MADE TO ASSESSEE'S INCOME WAS FULLY JUSTIFIED. SIMILARLY, IN THE CASE OF CARPENTE RS CLASSICS (EXIM) (P.) LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRC LE 4(1), BANGALORE (2007) 108 ITD 142 (BANG.), THE TRIBUNAL HELD THAT SINCE DECLARATION WAS VOLUNTARY AND WAS NOT ALLEGED TO HAVE BEEN OBTAINED UNDER THREAT OR COERCION, ONUS WAS ON ASSESSEE TO PROVE THAT SAID D ECLARATION WAS MADE UNDER ANY MISCONCEPTION OF FACTS. SINCE THE ASSESSE E HAD NOT TAKEN ANY STEPS TO RECTIFY ITS DECLARATION BEFORE AUTHORITIES BEFOR E WHOM SUCH DECLARATION WAS FILED, THERE WAS NO VALID REASON FOR RETRACTION OF SAME AFTER ABOUT A GAP OF ABOUT TWO AND A HALF MONTHS. 7.4 IN THIS CASE THE ASSESSEE HAS RETRACTED HIS STA TEMENT AFTER MORE THAN A MONTH. THE ASSESSEE COULD NOT SUBSTANTIATE HIS CONT ENTION THAT THE STATEMENT WAS RECORDED UNDER DURESS, PRESSURE AND COERCION. A S PER THE RECORDS IT IS EVIDENT THAT THE SEARCH WAS CARRIED OUT IN A PEACEF UL MANNER AND THE STATEMENT WAS MADE VOLUNTARILY. NO UNTOWARD INCIDEN T HAPPENED DURING ITA NO. 433, 434, 2030 & CO NO.216/AHD/2011 KALPESH KANTILAL PATEL VS. ACIT AY : 2003-04 & 2009-10 5 THE COURSE OF SEARCH. THUS, IT IS EVIDENT THAT THE RETRACTION IS AN AFTERTHOUGHT AND THE LD. CIT(A) HAS NOT CONSIDERED THIS ISSUE WH ILE DECIDING THE APPEAL. FURTHER, THE LD. DR RELIED ON HIS PAPER BOOK. 7.5 THE ASSESSEE IS NON-COOPERATIVE AND DID NOT APP EAR BEFORE THE LD. AO AS WELL AS BEFORE ITAT. IN VIEW THEREOF THE RELIEF GRANTED TO THE ASSESSEE REMAINS UNEXPLAINED AND UNCORROBORATED. IN VIEW TH EREOF, IT IS CONTENDED THAT THE ISSUES RAISED IN ALL THESE APPEALS MAY BE SET ASIDE AND RESTORED BACK TO THE FILE OF ASSESSING OFFICER. IF THE ASSESSEE HAS SOME LOGICAL EXPLANATION/DETAILS, THE SAME WILL BE FURNISHED BEF ORE THE LD. AO. 8. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIAL A VAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND MERIT IN THE CONTENTIONS OF THE LD. DR. THE ASSESSEE REMAINED N ON-COMPLIANT AND ELUSIVE BEFORE THE AO AND HAS NOT BEEN APPEARING BE FORE US ALSO. IN THESE FACTS AND CIRCUMSTANCES, WE ARE NOT IN A POSITION T O GIVE FINAL FINDING ON FACTS IN THIS BEHALF. WE ALSO FIND MERITS IN THE CO NTENTION OF THE LD. DR THAT THE INTEREST OF JUSTICE WILL BE SERVED IF THESE APP EALS AND CROSS-OBJECTION ARE SET ASIDE AND RESTORED BACK TO THE FILE OF LD. AO T O DECIDE THESE ISSUES AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING H EARD. WE ORDER ACCORDINGLY. 9. IN THE RESULT, ALL APPEALS OF THE ASSESSEE AND R EVENUE AS WELL AS ASSESSEES CROSS-OBJECTION ARE ALLOWED FOR STATISTI CAL PURPOSES ORDER PRONOUNCED IN THE COURT ON 9 TH DECEMBER, 2016 AT AHMEDABAD. SD/- SD/- AMARJIT SINGH (ACCOUNTANT MEMBER) R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 09/12/2016 *BIJU T., SR PS ITA NO. 433, 434, 2030 & CO NO.216/AHD/2011 KALPESH KANTILAL PATEL VS. ACIT AY : 2003-04 & 2009-10 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD