Late Shri Namdeo Panjwani (L/H - Shri Kamal Panjwani), Indore V. The ACIT, Circle 3(1), Indore

CO 69/IND/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7662 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1993-1994
• Appeal Filed On: 27-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C AGARWAL
• Assessee Lawyers: R A VERMA
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained investment; Search and seizure; Salary income; Peak credit; Revised return; Documents seized
• Section: 147; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : N - 711 I.T.A.NO. 298 /IND/201 2 . A.Y. : 1993 - 94 ACIT, SHRI KAMAL PANJWANI, L/H LATE SHRI NAMDEO PANJWANI, CIRCLE 3(1) , INDORE. VS 61, KESAR BAGH ROAD, INDORE. APPELLANT RESPONDENT PAN NO. : N - 711 C.O.NO.69/IND/2012 (ARISING OUT OF I.T.A.NO. 298/IND/2012.) A.Y. : 1993 - 94 SHRI KAMAL PANJWANI, L/H LATE SHRI NAMDEO PANJWANI, ACIT, CIRCLE 3(1), INDORE. 61, KE SAR BAGH ROAD, INDORE. VS CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI R. A. VERMA, SR. DR RESPONDENT BY : SHRI K. C. AGARWAL, C.A. DATE OF HEARING : 25 .0 7 .2012 DATE OF PRONOUNCEMENT : . 0 8 .201 2 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER O F CIT(A) DATED 24.2.2012. 2. FACTS IN BRIEF ARE THAT THE SEARCH AND SEIZURE O PERATION U/S 132(1) OF THE INCOME-TAX ACT, 1961, WERE CARRIE D OUT IN THE BUSINESS PREMISES OF PANJWANI PACKAGINGS LIMITED ( IN SHORT PPL) AND RESIDENTIAL PREMISES OF ITS MANAGING DIREC TOR SHRI N.P. PANJWANI, IN AUGUST, 1992. SIMULTANEOUSLY, SEA RCH OPERATION WAS ALSO CARRIED OUT ON THE BUSINESS PREM ISES OF ASSOCIATES CONCERNS. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE YEAR UNDER APPEAL ON 28.3.1994, SH OWING ONLY SALARY INCOME FROM M/S.PPL. THE ASSESSEE FURTHER FI LED REVISED RETURN ON 30.3.1994 SHOWING THE LOSS OF RS. 73,155/ -. AN INTIMATION U/S 143(1)(A) WAS ALSO ISSUED BY THE ASS ESSING OFFICER THAT NO ACTION IS POSSIBLE ON THIS RETURN D UE TO LATE FILING OF THIS RETURN. EX-PARTE ORIGINAL ASSESSMENT COMPLETED ON 4.7.1997 CONSEQUENT TO SEARCH AND SEIZURE OPERAT ION ON THE TOTAL INCOME OF RS. 50,14,420/-, WAS SET-ASIDE BY THE -: 3: - 3 LD.CIT(A) TO THE FILE OF ASSESSING OFFICER AS PER C ONSOLIDATED ORDER FOR SEVERAL ASSESSMENT YEARS PER ORDER DATED 31.12.1997. THE ASSESSING OFFICER TOOK UP THE ASSES SMENT PROCEEDINGS IN PURSUANCE TO SET ASIDE MATTER AND AF TER CONSIDERING THE COMPLIANCES MADE BY THE ASSESSEE AN D BASED ON THE DOCUMENTS SEIZED IN THE COURSE OF THE SEARCH AND SEIZURE OPERATION COMPUTED THE INCOME AS UNDER : INCOME FROM SALARY 42,000/- LESS: DEDUCTION U/S 16(1 ) 30,000/- 12,000/- ADD: 1. VALUE OF FOREIGN CURRENCY SEIZED DURING SEARCH PARA 2.2 25,000/ - 2. UNXPLAINED CASH FOUND DURING SEARCH PARA3 1,96,000/ - 3. UNEXPLAINED INVESTMENT IN GOLD JEWELLERY 3.1 75,762/ - 4. UNEXPLAINED DEPOSIT IN BANK ACCOUNT NO.920-PARA 4.1 18,08,990/ - 5. UNEXPLAINED DEPOSIT IN O. D. A/C NO.19/89 PARA 5 8,54,503/ - 6. UNEXPLAINED DEPOSIT IN BANK ACCOUNT IN ALLAHABAD BANK PARA 6.1 5,18,924/ - 7. UNEXPLAINED DEPOSIT IN BANK A/C NO. 1870 IN PNB INDORE PARA 7 4,01,000/ - 8. UNEXPLAINED DEPOSIT IN BANK A/C NO. 922 P.N.B. INDORE PARA -8 1,000/ - -: 4: - 4 9. UNEXPLAINED INVESTMENT IN HOUSE HOLD GOODS SURRENDERED IN HIS STATEMENT U/S 132(4) PARA 11 2,00,000/ - 10. ADDITION FOR LOW HOUSE HOLD EXPENSES PARA 10 1,25,000/ - 11. DISCLOSURE OF UNEXPLAINED INVESTMENT IN JEWELERY PARA 11 1,24,238/ - 12. DISCLOSURE OF UNEXPLAINED CASH IN THE STATEMENT U/S 132(4) PARA -12 54,000/ - 13. INCOME FROM SHARE PREMIUM DISCLOSED U/S 132(4) PARA 11 5,00,000/ - 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION OF RS. 1,20,000/- MADE ON ACCOUNT OF HOUSE HOLD EXPENSES AND ALSO DELETED ADDITION OF RS. 25,000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FOREIGN CURREN CIES. WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF UNEXPLAI NED CASH DEPOSITED IN VARIOUS BANK ACCOUNTS, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO TAKE PEAK CREDIT IN THE BANK A CCOUNT. HOWEVER, THE CIT(A) HAS SUSTAINED ADDITION OF RS. 5 LAKHS ON ACCOUNT OF INCOME FROM SHARE PREMIUM AND RS. 2 LAKH S ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE HOLD GOO DS ON THE BASIS OF STATEMENT RECORDED U/S 132(4). AGAINST THE ABOVE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US AND THE -: 5: - 5 ASSESSEE HAS ALSO FILED CROSS OBJECTION, WHEREIN RE OPENING OF ASSESSMENT U/S 147 WAS ALSO CHALLENGED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT LEGAL GROUND TAKEN BY THE ASSESSEE IN THE CROSS OBJECTION WITH REGARD TO VALIDITY OF REOPENIN G OF ASSESSMENT U/S 147 HAS NO LEGS TO STAND, IN SO FAR AS SUFFICIENT MATERIAL WAS COLLECTED DURING COURSE OF SEARCH, WHICH WARRANTED REOPENING OF ASSESSMENT FOR THE YEA RS UNDER CONSIDERATION. 5. THE ADDITION MADE ON ACCOUNT OF HOUSE HOLD EXPENSES WAS DELETED BY THE LD.CIT(A) AFTER HAVING THE FOLLO WING OBSERVATIONS :- GROUNDS NO.3 AND 4 ARE FOUND TO BE INTERCONNECTED AND ARE DIRECTED AGAINST AO'S ACTION IN MAKING ADDITION FOR LOW HOUSEHOLD EXPENSES AT RS. L,25,000/- AND RS.2 LACS FOR UNEXPLAINED INVESTMENT IN HOUSEHOLD GOODS AS PER DISCUSSION IN PARA 10 AND 11 OF ASSESSMENT ORDER. -: 6: - 6 4.3.1 THE BROAD UN DISPUTED FACTS ARE THAT SEARCH & SEIZURE OPERATIONS WERE CARRIED OUT IN THE CASE OF THE APPELLANT ON 10 TH AUGUST, 1992, AND HENCE THE DISCLOSURE MADE FOR HOUSEHOLD GOODS, WHICH WAS WITHDRAWN BY THE APPELLANT PERTAINS TO ASSTT. YEAR 1993-94 ONLY AND NO SUCH INCOME HAS BEEN OFFERED BY THE APPELLANT FOR UNEXPLAINED INVESTMENT IN HOUSEHOLD GOODS IN ANY OF THE FINANCIAL YEAR. 4.3.2 THE CONTENTION IN THIS BEHALF IS THAT SUCH DISCLOSURE WAS MADE AS PER STATEMENTS RECORDED U/ S 132(4) IN THE HANDS OF PANJWANI PACKAGING PVT. LTD. ANOTHER ALTERNATE CONTENTION IS THAT AS PER BALANCE SHEET FILED, INCLUDED IN COMPLIATION ON PAGE 4 THE APPELLANT HAS SHOWN WITHDRAWALS OF RS. 2.5 LACS AND AS SUCH NO SEPARATE ADDITION FOR UNEXPLAINED INVESTMENT IN -: 7: - 7 HOUSEHOLD EXPENSES CAN BE CONSIDERED IN THE CASE OF THE APPELLANT. IN COURSE OF DISCUSSION IT WAS ADMITTED BY SHRI KAMAL PANJWANI, LEGAL HEIR AND THE AR PRESENT THAT THIS DISCLOSURE OF RS. 2 LACS PERTAINING TO HOUSEHOLD GOODS WAS NEITHER MADE BY THE COMPANY PANJWANI PACKAGING PVT. LTD. IN ITS OWN RETURN OF INCOME FILED NOR THE SAME WAS CONSIDERED BY THE ASSESSING OFFICER IN THE HANDS OF THE COMPANY. 4.3.3 THE AO HAS NOTED IN PARA 10 OF ASSESSMENT ORDER THAT THE APPELLANT'S CONTENTION BEFORE HIM WAS THAT THE APPELLANT WAS WITHDRAWING SUCH DECLARATION OF RS.2 LACS AS THE DECLARATION WAS NOT FULLY ACCEPTED BY THE DEPARTMENT. THE AO HAS FURTHER NOTED THAT THE APPELLANT FAILED TO PRODUCE BILLS OF PURCHASE OF HOUSEHOLD ITEMS AND TOTAL OF ITEMS MENTIONED IN THE LIST MARKED' -: 8: - 8 PURCHASE IN 1992' THE INVESTMENT VALUE WAS SHOWN AT RS.1.25 LACS. THE AO HAS, HOWEVER, MADE ADDITION FOR DISCLOSURE AMOUNT OF RS.2 LACS AND HAS FURTHER ADDED AN AMOUNT OF RS.1.25 LACS AS HOUSE HOLD EXPENSES. THE SUCCESSOR ASSESSING OFFICER IN COURSE OF SET ASIDE PROCEEDINGS AS PER I.T.A.T.S DIRECTION HAS RESTRICTED THE ADDITION FOR HOUSE HOLD EXPENSES AT RS. 50,000/- OVER AND ABOVE THE DISCLOSURE MADE FOR ASSESSMENT YEAR 1992-93. THE ASSESSING OFFICER IN PROCESS OF MAKING TWO ADDITIONS HAS NOT CONSIDERED THE WITHDRAWALS MADE AS PER BALANCE SHEET FILED BY THE APPELLANT. THUS ON CONSIDERATION OF THE ABOVE DISCUSSION AND ENTIRE FACTS AVAILABLE ON RECORD THE ADDITION FOR UNEXPLAINED INVESTMENT IN HOUSE HOLD GOODS AS WELL AS LOW HOUSE HOLD EXPENSES, BOTH TAKEN TOGETHER IS -: 9: - 9 DIRECTED TO BE RESTRICTED TO RS. 2 LACS I.E. THE AMOUNT OF UNEXPLAINED INVESTMENT AS PER DISCLOSURE MADE U/S 132(4). ACCORDINGLY, GROUNDS NO. 3 AND 4 ARE PARTLY ALLOWED. 6. ADDITION MADE ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT WAS DIRECTED BY THE LD.CIT(A) TO BE TAKEN O NLY AT PEAK AMOUNT, AFTER HAVING FOLLOWING OBSERVATIONS :- THE APPELLANT THEREAFTER IN THE COURSE OF APPEAL PROCEEDINGS ON 16.01.2007 FILED DETAILED WORKING OF PEAK CREDIT DULY SUPPORTED BY COPIES OF RELEVANT BANK ACCOUNTS AND THE PEAK CREDIT AMOUNT WAS WORKED OUT AT RS. 4,50,000/-. THE APPEAL PERTAINS TO ASSTT. YEAR 1993-94 AND THIS IS NEARLY 20 YEARS OLD. EVEN IF APPELLANT'S OTHER CONTENTIONS ABOUT SUCH DEPOSIT BEING EXPLAINABLE FROM THE SOURCES AS CLAIMED AND BEING RELATED TO OTHER GROUPS CASES ARE NOT CONSIDERED FOR WANT OF COMPLETE, VERIFIABLE AND RELIABLE DETAILS AND EVIDENCES, ONCE THESE -: 10: - 10 DEPOSITS ARE TREATED AS UNEXPLAINED DEPOSITS OF APPELLANT, THEN THE BENEFIT OF WITHDRAWALS MADE' TO EXPLAIN SUBSEQUENT DEPOSITS CANNOT BE DENIED TO THE APPELLANT IN EQUITY. THE WORKING FURNISHED BY THE APPELLANT PRIMA FACIE APPEARS TO BE IN ORDER. HOWEVER, SINCE THESE WORKINGS WERE NOT FILED BEFORE AO, THE AO IS DIRECTED TO VERIFY SUCH WORKING AND RESTRICT THE ADDITION TO PEAK UNEXPLAINED CREDIT AFTER GIVING DUE OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE FACTS IN THIS BEHALF AND THE GROUND OF APPEAL IS ACCORDINGLY DISPOSED OF. THE APPELLANT IS DIRECTED TO FURNISH THE SET OF PEAK WORKING TOGETHER WITH COPY OF BANK ACCOUNT ETC. BEFORE AO AS FILED IN COURSE OF APPEAL PROCEEDINGS IN THIS OFFICE, TO ENABLE HIM TO EXAMINE AND GIVE EFFECT TO, APPELLATE DIRECTIONS AND TO RENDER NECESSARY ASSISTANCE IN THIS BEHALF AS REQUIRED BY ASSESSING OFFICER. -: 11: - 11 6. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE ADDITION OF RS. 1.25 LAKHS ON ACCOUNT OF HOUSE HOLD EXPENDITURE WAS DELETED BY THE LD.CIT(A) AFTER RECORDING A FINDING TO THE EFFECT THAT HE HAS CONSI DERED THE STATEMENT RECORDED U/S 132(4) AND ALSO WITHDRAWAL O F RS. 2.5 LAKHS SHOWN BY THE ASSESSEE AS PER THE BALANCE SHEET FILED ON RECORD. THE FINDING RECORDED BY THE LD.CIT (A) HAS NOT BEEN CONTROVERTED, ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A). ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A) RESULTING INTO D ELETION OF ADDITION OF RS. 1.25 LAKHS ON ACCOUNT OF LOW HOUSE HOLD EXPENSES. 7. THE LD. CIT(A) HAS ALSO DELETED ADDITION OF RS. 25,000/- ON ACCOUNT OF INVESTMENT IN FOREIGN CURREN CY BY OBSERVING THAT VALUE OF FOREIGN CURRENCY WAS DETERM INED AT RS. 10,000/- IN 132(5) ORDER AND THE REAL VALUE OF INVESTMENT IN SUCH CURRENCY WAS MUCH LESSER. IT WAS ALSO OBSERVED THAT OUT OF HOUSE HOLD WITHDRAWALS, THE AS SESSEE HAS ACQUIRED THE FOREIGN CURRENCY AND WHICH WAS IN THE -: 12: - 12 FORM OF SMALL COINS OF FOREIGN CURRENCY, WHICH WAS ACQUIRED OVER A PERIOD OF TIME OUT OF WITHDRAWALS MADE IN RE SPECTIVE YEARS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING SEPARATE ADDITION OF RS. 25, 000/- MADE ON ACCOUNT OF FOREIGN CURRENCY FOUND AT THE RE SIDENCE OF THE ASSESSEE. 8. WITH REGARD TO THE DEPOSIT IN THE BANK ACCOUNT, TH E LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VE RIFY WORKING FURNISHED BY THE ASSESSEE WITH REGARD TO TH E PEAK CREDIT IN THE BANK ACCOUNT AND TO RESTRICT THE ADDI TION TO THE PEAK UNEXPLAINED CREDIT AFTER GIVING DUE OPPORT UNITY TO THE ASSESSEE TO EXPLAIN THE FACTS. WE DO NOT FIND A NY INFIRMITY IN THE DIRECTION SO ISSUED BY THE LD.CIT( A) WITH RESPECT TO THE ADDITION MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF VARIOUS DEPOSIT IN THE BANK ACCOUNT. 9. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, THE ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 2 LAKHS M ADE ON ACCOUNT OF INVESTMENT IN SANITARY ITEMS OF HOUSE HO LD GOODS AND FOR ADDITION ON ACCOUNT OF SHARE PREMIUM OF RS. 5 LAKHS EARNED ON SALE OF EMPLOYEE QUOTA AND PROMOT OR -: 13: - 13 QUOTA SHARES. FROM THE RECORD, WE FOUND THAT THE AD DITION WAS MADE ON THE BASIS OF STATEMENT RECORDED U/S 132 (4), THE OBSERVATION OF CIT(A) WAS AS UNDER :- THE AO HAS NOTED IN PARA NO.10 OF THE ASSESSMENT ORDER THAT THE APPELLANT'S CONTENTION BEFORE HIM WAS THAT THE APPELLANT WITHDRAWING SUCH DECLARATION OF RS. 2 LACS AS THE DECLARATION WAS NOT FULLY ACCEPTED BY THE DEPARTMENT. THE AO FURTHER NOTED THAT THE APPELLANT FAILED TO PRODUCE BILLS OF PURCHASE OF HOUSEHOLD ITEMS AND THE TOTAL OF ITEMS MENTIONED IN THE LIST MARKED ''PURCHASED IN 1992' THE INVESTMENT VALUE WAS SHOWN AT RS.1.25 LAKHS. THE AO HAS, HOWEVER, MADE ADDITION FOR DISCLOSURE AMOUNT OF RS.2 LACS AND HAS FURTHER ADDED AN AMOUNT OF RS.1.25 LACS AS HOUSEHOLD EXPENSES. THE SUCCESSOR AO IN THE COURSE OF SET ASIDE PROCEEDINGS AS PER ITAT'S DIRECTION HAS RESTRICTED THE ADDITION FOR HOUSEHOLD EXPENSES AT RS. 50,000/- OVER AND ABOVE THE DISCLOSURE MADE FOR AY 1992-93. THE AO IN THE PROCESS OF MAKING TWO ADDITION HAS NOT CONSIDERED THE WITHDRAWALS MADE AS PER BALANCE SHEET FILED BY THE APPELLANT. THUS ON THE CONSIDERATION OF THE ABOVE DISCUSSION AND -: 14: - 14 THE ENTIRE FACTS AVAILABLE ON THE RECORDS THE ADDITION FOR UNEXPLAINED INVESTMENT IN HOUSE HOLD GOODS AS WELL AS LOW HOUSE HOLD EXPENSES, BOTH TAKEN TOGETHER IS DIRECTED TO BE RESTRICTED TO RS.2 LACS I.E. THE AMOUNT OF UNEXPLAINED INVESTMENT AS PER DISCLOSURE MADE U/S 132(4). ACCORDINGLY, GROUND NO. 3 AND 4 ARE PARTLY ALLOWED. 10. NOTHING WAS BROUGHT TO OUR NOTICE TO DEVIATE FROM THE FINDINGS RECORDED BY THE LD.CIT(A), ACCORDINGLY , WE UPHOLD THE SAME. 11. WITH REGARD TO ADDITION ON ACCOUNT OF SHARE PREMIUM RECEIVED BY THE ASSESSEE AMOUNTING TO RS. 5 LAKHS FROM SHRI V. TRIVEDI, SHARE BROKER, WE FOUND THAT STATEMENT WAS GIVEN BY THE ASSESSEE AND THIS AMOUNT WAS SURRENDERED BY HIM. DESPITE NOTICE DATED 23.11.94, ASSESSEE HAS FAILED TO FILE FULL DETAILS OF METHOD OF EARNING OF THIS INCOME AND THE DETAILS OF SHARES SOLD ON WHICH PREMIUM IS EARNED. DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEEDINGS ASSESSEE CONTENDED THAT NO AMOUNT OF SHARE PREMIUM WAS RECEIVED AND AMOUNT WAS RECEIVED FROM M/S. D.J. INVESTMENT ON BEHALF OF SHA RE -: 15: - 15 HOLDERS M/S. PANJWANI PACKAGING LIMITED HAS DEPOSIT ED AGAINST SALE OF THESE SHARES NO CONFIRMATION IN THI S REGARD, HOWEVER, COULD BE FILED. 12. IN VIEW OF THE FINDING RECORDED BY THE ASSESSING OFFICER WHICH HAS NOT BEEN CONTROVERTED BY LD. AUTH ORIZED REPRESENTATIVE BY BRINGING ANY POSITIVE MATERIAL O N RECORD, WE DO NOT FIND ANY INFIRMITY FOR MAKING ADDITION OF RS. 5 LAKHS ON ACCOUNT OF SHARE PREMIUM AMOUNT RECEIVED B Y THE ASSESSEE WHICH HAS BEEN SURRENDERED BY ASSESSEE HIM SELF DURING COURSE OF SEARCH. 13. IN THE RESULT, BOTH THE APPEAL OF REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD AUGUST, 2012. CPU* 257238