M/s Radhe Sham Jain Diamond Jewellers (P) Ltd., Ludhiana V. ACIT, Ludhiana

CO 49/CHANDI/2014

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2621 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 30 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER CO 49/CHD/2014 IN ITA 847/CHD/2014 ASSESSMENT YEAR: 2009-10 M/S RADHE SHAM JAIN DIAMOND V THE ACIT, JEWELLERS (P) LTD., B-XIX, CENTRAL CIRCLE III, 549/1, COLLEGE ROAD, LUDHIANA. FOUNTAIN CHOWK, CIVIL LINES, LUDHIANA. PAN: AADCR8437J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV GUPTA, C.A . RESPONDENT BY : SHRI SUSHIL KUMAR, CIT-DR DATE OF HEARING : 07.12.2016 DATE OF PRONOUNCEMENT : 09.12.2016 O R D E R PER BHAVNESH SAINI, JM THIS CROSS OBJECTION BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA DA TED 30.07.2014 FOR ASSESSMENT YEAR 2009-10. 2. THE DEPARTMENTAL APPEAL IN ITA 847 OF 2014 FOR ASSESSMENT YEAR 2009-10 WAS HEARD ALONGWITH THE CRO SS OBJECTION. SINCE ONLY ONE INDEPENDENT GROUND IS AR ISING OUT OF THE CROSS OBJECTION, THEREFORE, CROSS OBJECT ION IS DISPOSED OFF SEPARATELY. 2 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BEL OW. 4. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1 TO 5 OF THE CROSS OBJECTION. THE SAM E ARE DISMISSED BEING NOT PRESSED. 5. ON GROUND NO. 6, ASSESSEE CHALLENGED THE ORDER O F LD. CIT(APPEALS) IN MAINTAINING THE ADDITION OF RS. 1,63,950/- UNDER SECTION 69 OF THE INCOME TAX ACT. DURING THE COURSE OF SEARCH IN THE PREMISES OF THE ASSESSEE, CERTAIN INCRIMINATING DOCUMENTS WERE FOUN D AND SEIZED. ONE OF THESE ANNEXURES IS ANNEXURE A-2 0 AS PER WHICH SOME SALES ARE ENTERED INTO THE BOOKS OF ACCOUNT WHICH HAVE BEEN VERIFIED DURING THE COURSE OF EXAMINATION OF THE BOOKS OF ACCOUNT AND SOME OF THE SALES ARE NOT ENTERED INTO BOOKS OF ACCOUNT WHICH A RE TABULATED IN PARA 5 OF THE ASSESSMENT ORDER TOTALIN G TO RS. 1,63,950/-. THE SAME WERE CONSIDERED AS UNDISCLOSED SALES IN A SUM OF RS. 1,63,950/-. THE ASSESSING OFFICER DID NOT ACCEPT EXPLANATION OF THE ASSESSEE THAT THESE ARE CALCULATIONS ON ESTIMATE. THE SAME WERE, THEREFORE, TREATED AS UNACCOUNTED SALES OUT OF THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSES SING OFFICER ALSO NOTED THAT FOR MAKING UNACCOUNTED SALE S, ASSESSEE HAS TO MAKE INVESTMENT IN PURCHASES WHICH ARE ALSO UNDISCLOSED. THE GP RATE OF 17% WAS APPLIED A ND TOTAL INVESTMENT IN PURCHASES WAS DETERMINED AT 3 RS. 1,36,078/- AND BALANCE OF RS. 27,872/- WAS CONSIDERED AS BUSINESS INCOME OF THE ASSESSEE. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION AND DISMISSED T HIS GROUND OF APPEAL OF THE ASSESSEE. 6. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW ADDITION ON ACCOUNT OF INVESTMENT IN A SUM OF RS. 1,36,078/- IS UNJUSTIFIED. DURING THE COURSE OF SE ARCH, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND SHOWING THAT CERTAIN SALES HAVE NOT BEEN ENTERED INTO THE B OOKS OF ACCOUNT OF THE ASSESSEE, THEREFORE, UNACCOUNTED SALES WERE FOUND IN A SUM OF RS. 1,63,950/-. THE TOTAL S ALES COULD NOT BE TREATED AS PROFIT OF THE ASSESSEE. TH E LD. COUNSEL FOR THE ASSESSEE ADMITTED THAT PROFIT RATE MAY BE APPLIED AGAINST THESE SALES WHICH ASSESSING OFFI CER HAS APPLIED IN THIS CASE @ 17% AND TREATED RS. 27,8 72/- AS BUSINESS INCOME. THE ORDER OF AUTHORITIES BELOW TO THAT EXTENT IS, THEREFORE, CONFIRMED AND ADDITION O F RS. 27,872/- IS CONFIRMED. 6(I) HOWEVER, AS REGARDS THE ADDITION OF RS. 1,36,0 78/- ON ACCOUNT OF INVESTMENT IN PURCHASES, NO INCRIMINA TING MATERIAL WAS FOUND TO MAKE THIS ADDITION. FURTHER, IT IS PRESUMPTION OF THE AUTHORITIES BELOW ONLY THAT FOR MAKING UNACCOUNTED SALES, THE ASSESSEE HAS MADE UNACCOUNTED INVESTMENTS IN THE PURCHASES. SINCE NO MATERIAL IS FOUND DURING THE COURSE OF SEARCH THAT ASSESSEE MADE ANY INVESTMENT IN PURCHASES, THEREFOR E, 4 ON MERE PRESUMPTION, SUCH ADDITION IS NOT WARRANTED . THE ORDERS OF AUTHORITIES BELOW TO THAT EXTENT ARE SET ASIDE AND WE DELETE THE ADDITION OF RS. 1,36,078/-. THIS GROUND OF CROSS OBJECTION IS PARTLY. 7. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) ( BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09 TH DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD