Shri Arun Bansal, V. Assistant Commissioner Of Income Tax, SATNA

CO 64/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1109 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2013
• Court: TRIBUNAL
• Department Lawyers: V B SARGOR
• Assessee Lawyers: SUNIL NEMA ADVS
• Keywords: Search and seizure; Loose papers; Document seized; Onus to prove; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T(S.S.).A.NO.72/JAB/2013 A.Y. : 2009-10 ACIT, CIRCLE SATNA VS SHRI ARUN BANSAL, MIG 3, HEDGEWAR NAGAR, REWA APPELLANT RESPONDENT PAN NO. : AFGPB8455H C.O. NO.64/JAB/2013 (ARISING OUT OF I.T(S.S.).A.NO.72/JAB/2013 A.Y. : 2009-10 SHRI ARUN BANSAL, MIG 3, HEDGEWAR NAGAR, REWA VS ACIT, CIRCLE SATNA CROSS OBJECTOR RESPONDENT -: 2: - 2 DEPARTMENT BY : SHRI V.B.SARGOR, DR ASSESSEE BY : SHRI K.P.DEWANI AND SHRI SUNIL NEMA, ADVS. DATE OF HEARING : 28 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 25 . 0 6 .201 5 O R D E R PER BENCH APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FIL ED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT( A)-28, MUMBAI, DATED 25.03.2013 FOR THE ASSESSMENT YEAR 20 09-10. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE : - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN FACTS AND IN LAW :- (I) IN DELETING THE ADDITION OF RS. 8,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INADMISSIBLE EXPENSES. -: 3: - 3 (II) IN RESTRICTING THE ADDITION OF RS. 10,64,700/- TO RS. 37,264/- ON ACCOUNT OF UNRECORDED TRANSACTION REFLECTED IN LOOSE PAPERS. 3. THERE WAS SEARCH AND SEIZURE OPERATION CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES OF BANSAL GRO UP OF REWA U/S 132(1) OF THE INCOME-TAX ACT, 1961, ON 23. 07.2009. 4. DURING THE COURSE OF SEARCH, SOME LOOSE PAPERS WERE FOUND AND SEIZED. THE AO HAS VERIFIED THE LOOSE PAP ERS IN ANNEXURE A/1/1 TO A/1/9 AND IT WAS SEEN THAT THE AS SESSEE HAS MADE VARIOUS PAYMENTS TO INDIVIDUAL RIGHT FROM FINANCIAL YEAR 2003-04 TO FINANCIAL YEAR 2009-10, WHICH ARE N OT RELATED TO BUSINESS NOR UNDISCLOSED BUSINESS OF WASTE OIL. THE EXPENSES ARE IN THE NATURE OF BRIBES OF ILLEGAL GRA TIFICATION. THEREFORE, IT WAS NOT ALLOWED AND RS. 8 LAKHS WAS A DDED TO THE TOTAL INCOME. 5. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- -: 4: - 4 8. I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE AND THE ORDER OF THE ASSESSING OFFICER. I HAVE ALSO LOOKED INTO PHOTOCOPIES OF RELEVANT SEIZED RECORDS PRODUCED BY THE ASSESSEE. I AGREE WITH THE ASSESSEE THAT THE A.O. HAS NOT GIVEN ANY WORKING AS TO HOW DID HE REACH ON THIS FIGURE OF RS. 8,00,000/- . NOT ONLY THIS SIMILAR ADDITIONS HAVE BEEN MADE BY THE A.O. IN OTHER YEARS AS WELL ON THE BASIS OF SAME DOCUMENT, WITHOUT ANY WORKING THEREOF OR JUSTIFICATION. THE A.O. HAS NO WHERE POINTED OUT AS TO WHAT ARE THE ENTRIES IN NATURE OF ILLEGAL GRATIFICATION. I HAVE SEEN THE PHOTOCOPIES OF RELEVANT SEIZED DOCUMENTS. FOR EXAMPLE PAGE 1 OF ANNEX A/1/2 SHOWS TRANSACTIONS OF 14000+3000+1200+1200+573000+427000 (BOTH CHEQUES AND CASH), BUT ALL THESE TRANSACTIONS ARE RELATING TO PURCHASE OF A PROPERTY AND RELATES TO PURCHASE OF STAMP AND -: 5: - 5 REGISTRATION EXPENSES ETC. SIMILARLY OTHER PAGES OF THIS ANNEX CONTAINS DETAILS/ENTRIES OF FEW HUNDRED RUPEES TO FEW THOUSAND RUPEES BUT APPARENTLY IT DOES NOT INDICATE THAT THEY ARE IN NATURE OF ILLEGAL PAYMENTS. WHILE I AM SAYING SO I AM NOT SAYING THAT THESE EXPENSES ARE EXPLAINED OR DISCLOSED . I AM ONLY SAYING THAT THEY DO NOT APPEAR TO BE IN NATURE PAYMENT OF ILLEGAL GRATIFICATION. COMING TO OTHER SEIZED ANNEX. A/1/4. A LL THE DETAILS APPEAR TO BE IN NATURE OF TELEPHONE NUMBERS AND IT DOES NOT SHOW ANY KIND OF PAYMENTS WHETHER LEGAL OR ILLEGAL AND WHETHER ACCOUNTED OR UNACCOUNTED. 9. IN ANY CASE THE ASSESSEE HAS OFFERED AN ADDITIONAL INCOME OF OVER RS. 59 LACS SUBSEQUENT TO SEARCH. I HAVE BEEN GIVEN TO UNDERSTAND THAT THE WORKING OF ABOVE ADDITIONAL INCOME, ALSO INCLUDES THE TRANSACTIONS OR ENTRIES APPEARING IN SEIZED ANNEX A/1/1 TO 1/1/9. IN THESE CIRCUMSTANCES FURTHER ADDITION OF RS. 8 -: 6: - 6 LACS ON ESTIMATE BASIS, ON THE BASIS OF SAME SET OF DOCUMENTS APPEARS TO BE UNJUSTIFIED. CONSIDERING THE FACTS OF THE CASE I FEEL THAT THIS ADDITION IS UNSUSTAINABLE AS NO WORKING OF THE SAME HAS BEEN GIVEN BY THE A.O. AND IT APPEARS TO BE MADE PURELY ON ESTIMATE BASIS. FURTHER, EVEN FOR ARGUMENT SAKE, IF THIS ADDITION IS REQUIRED TO BE MADE, THE SAME STAND COVERED/TELESCOPED FROM THE ADDITIONAL INCOME OF RS. 59 LACS OFFERED BY THE ASSESSEE AND SEPARATE ADDITION WAS NOT REQUIRED TO BE MADE IN THIS REGARD. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED AND ADDITION MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE LD. CIT(A) HAS DELETED T HE ADDITION ON THE GROUND THAT THE AO HAS NOT POINTED OUT ANY ILLE GAL GRATIFICATION ENTRIES, MOREOVER, THE LD. CIT(A) HAS VERIFIED THE -: 7: - 7 SEIZED DOCUMENTS, WHICH SHOWS THE TRANSACTION OF CA SH AS WELL AS CHEQUES. THE LD. CIT(A) FURTHER HELD THAT THESE TRANSACTIONS ARE RELATING TO PURCHASE OF PROPERTY AND RELATED TO PURCHASE OF STAMP AND REGISTRY. THEREFORE, THE LD. CIT(A) HAS D ELETED THE ADDITION. DURING THE COURSE OF HEARING, THE LD. D. R. COULD NOT BRING ANY CONTRARY MATERIAL AGAINST THE FINDING OF THE CIT(A) . THEREFORE, THE LD. CIT(A) HAS DELETED THE ADDITION. MOREOVER, THE LD. CIT(A) HAS ALSO CONSIDERED THAT THE ADDITIO N OF RS. 8 LACS IS MADE ON ESTIMATE BASIS, THEREFORE, HE HAS D ELETED ADDITION. OUR INTERFERENCE IS NOT CALLED FOR. 7. SECOND GROUND IS THAT THE LD. CIT(A) ERRED IN FACTS AND IN LAW IN RESTRICTING THE ADDITION OF RS. 10,64,700 /- TO RS. 37,264/- ON ACCOUNT OF UNRECORDED TRANSACTION REFLE CTED IN LOOSE PAPERS. 8. THE ADDITION OF RS. 10,64,700/- WAS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED INCOME ON THE BASI S OF SEIZED ANEXURE A-2. THE AO STATED IN HIS ASSESSMENT ORDER THAT THE ASSESSEE APPARENTLY SOLD 719.5 KILO LITRES OF KEROS ENE FOR AN AMOUNT OF RS. 10,64,700/-. -: 8: - 8 9. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S RESTRICTED THE ADDITION FROM RS. 10,64,700/- TO RS. 37,264/-BY OBSERVING AS UNDER :- 11. I HAVE CONSIDERED THE FACTS OF THE CASE AND AL SO PERUSED PHOTOCOPIES OF RELEVANT SEIZED DOCUMENT NAMELY SEIZED ANNEX. A/2 PAGE 1 FRONT SIDE AND BACK SIDE. THE BACK SIDE OF THIS PAPER CONTAINS DETAILS OF SALES (OF APPARENTLY KEROSENE ) FROM JANUARY 2008 TO APRIL 2009 OF FOUR DIFFERENT STATIO NS, NAMELY, SIRMAUR, SEMARIA, MANGAVA, PARASI AND H B TOTALING TO 1004.7 KILO LITRES. THE FRONT SIDE OF T HIS PAGE SHOWS THE VALUE IN RESPECT OF 1004.700 KILO LITRES AT RS. 14,66,700/- IN WHICH INTEREST OF RS. 1,68,000/- HAS BEEN ADDED. THE PAPER CLEARLY SHOWS THE SALE OF CERTAIN LIQUID AS QUANTITY IS MENTIONED IN KILO LITRES ETC. CONSIDERING THE FACTS, I FEEL THAT IT WILL BE REASONABLE TO CONSIDER IT AS SALES TURNOVER, OUT OF WHICH AN AMOUNT OF RS. 10,64,000/- RELATES TO THE CURRENT YEAR. IT ALSO APPEARS THAT THE ASSESSEE MAY NOT HAVE DISCLOSED THIS TURNOVER IN HIS REGULAR BOO KS -: 9: - 9 OF ACCOUNT, AS THEY ARE CLAIMING THAT THE PAPER DOE S NOT BELONG TO HIM BUT TO A DIFFERENT PERSON NAMELY HITEN PATEL. HOWEVER, I DO NOT AGREE WITH SUCH A PROPOSITION, AS THIS DOCUMENT HAS BEEN FOUND FROM THE ASSESSEES POSSESSION AS ON DATE OF SEARCH AND THEREFORE ONUS TO PROVE THAT IT DOES NOT BELONG TO HIM LIES WITH HIM, WHICH HE HAS FAILED TO DISCHARGE. ACCORDINGLY RS.10,64,000/-IS TREATED AS UNDISCLOSED TURNOVER OF THE ASSESSEE FROM KEROSENE TRADING. NOW WHAT SHOULD BE THE PROFIT OR INCOME OF THE ASSESSEE FROM SUCH A TURNOVER. IT IS NOTICE THAT THE ASSESSE E HAS DISCLOSED GROSS PROFIT RATE OF 3.54% FROM SUCH BUSINESS. I THEREFORE HOLD THAT IT WILL BE FAIR AND REASONABLE TO ADOPT NET PROFIT RATE OF 3.54 % ON TURNOVER. THEREFORE, THE INCOME ON UNDISCLOSED TURNOVER OF RS. 10,64,700, MAY BE COMPUTED BY APPLYING GROSS PROFIT RATE OF 3.54 % AND THE SAME ACCORDINGLY WORKS OUT TO RS. 37,264/-. ACCORDINGLY OUT OF TOTAL ADDITION OF RS. 10,64,000/- AN AMOUNT OF -: 10: - 10 RS. 37,264/- IS UPHELD AND REMAINING AMOUNT IS DIRECTED TO BE DELETED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. THE AO HAS MADE THE ADDITION ON THE BASI S OF SEIZED PAPERS AND IN THE SEIZED PAPERS, IT WAS FOUND THAT THE ASSESSEE HAS SOLD 719 KILO LITRES OF KEROSENE. THE ASSESSEES CONTENTION THAT BACK SIDE OF THIS PAPER CONTAINED T HE DETAILS OF SALES CARRIED OUT TO DIFFERENT PERSONS. THE PAPERS ALSO SHOW THE SALES OF CERTAIN LIQUID. THE ASSESSEE HAS DISCL OSED RS. 59 LAKHS AS ADDITIONAL INCOME FOR UPHOLDING THE RETURN . THE LD. CIT(A) CONSIDERING THAT THE KEROSENE INCOME IS NOT UPHELD FOR TAXATION, THEREFORE, HE HAS ADDED THE TURNOVER OF T HE ASSESSEE FROM KEROSENE TRADING AND NET PROFIT ON THIS TURNOV ER WAS ADDED BY THE LD. CIT(A). 11. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. DR DID NOT BRING ANY MATERIAL AGAINST THE FINDING OF T HE LD. CIT(A). THEREFORE, WE HAVE NO ALTERNATIVE EXCEPT TO ENDORSE THE ACTION OF THE CIT(A). -: 11: - 11 12. SINCE THE DEPARTMENTAL APPEAL IS DISMISSED, CROSS OBJECTION HAS BECOME INFRUCTUOUS AND THE SAME IS DI SMISSED. 13. IN THE RESULT THE REVENUES APPEAL IS DISMISSED AND THE CROSS OBJECTION IS ALSO DISMISSED. THIS ORDER IS PRONOUNCED IN ACCORDANCE WITH RULE 34 (4) OF I.T.A.T. RULES, BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 25 TH JUNE, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 25 TH JUNE, 2015. CPU* 1725