Shri Sudhir kumar Jain , Ratlam V. ACIT, Ratlam

ITA 112/Ind/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0497 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-12-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 22-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PUNEET KUMAR
• Assessee Lawyers: P D NAGAR
• Keywords: Corroborative evidences; Retraction; Set aside
• Section: 13; 68

Judgement Text

[ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.112/IND/2018 ASSESSMENT YEAR: 2004-05 SHRI SUDHIR KUMAR JAIN P.D. NAGAR & CO. CHARTERED ACCOUNTANTS 403, CITY PLAZA, 564, M.G. ROAD, INDORE / VS. ACIT RATLAM ( APPELLANT ) ( REVENUE ) P.A. NO. ABEPJ8792M APPELLANT BY SHRI P.D. NAGAR, A.R. RESPONDENT BY SHRI PUNEET KUMAR, SR. D.R. DATE OF HEARING: 11.12.2019 DATE OF PRONOUNCEM ENT: 26.12.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE CIT(A), UJJAIN DATED 12.12.2017 PERTAINING TO THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 2 1. THAT THE LEARENED CIT(A) ERRED IN LAW IN CONFIRMING THE ADDITION OF RS.3,78,150/- BEING THE DIFFERENCE IN T HE AMOUNT SURRENDERED DURING THE SURVEY AND THE INCOME OFFERED FOR TAX WHILE FILING THE RETURN OF INCOME. HE ERRED IN CONFIRMING THE ADDITION WITHOUT APPRECIATING THE FACT THAT:- A) SUCH DIFFERENTIAL AMOUNT OF RS.3,78,150/- WAS RETRACTED BEFORE FILING OF RETURN WITH PROPER EXPLANATION VIDE LETTER DATED 16.8.2004; B) DIFFERENCE OF RS.1,58,600/- REPRESENTS AMOUNT DUE FROM DEBTORS APPEARING IN THE LIST FOUND DURING SURVEY, WERE RELATED TO PREVIOUS F.Y. RELEVANT TO A .Y. 2003-04; C) SOME OF THE DEBTORS HAD ALREADY REPAID THE AMOUNT BEFORE THE DATE OF SURVEY AMOUNTING TO RS.1,19,550/ - HENCE DID NOT REMAIN OUTSTANDING. CONFIRMATION OF ADDITION MADE IN SPITE OF PROPER EXPLANATION TOWARDS PARTIAL RETRACTION OF THE AMOUN T SURRENDERED DURING SURVEY ON THE GROUND THAT SUCH RETRACTION WAS DELAYED, IS UNJUSTIFIED, IMPROPER, B AD IN LAW AND DESERVES TO BE QUASHED. 2. THAT THE LEARNED CIT(A) FURTHER ERRED IN LAW IN CON FIRMING THE ADDITION OF RS. ONE LAC OUT OF RS.2 LACS GIVEN FOR PURCHASE OF AGRICULTURAL LAND JOINTLY BY TWO PARTIE S AS PER AGREEMENT DATED 21.7.2003. HE OUGHT TO HAVE CONSID ERED THAT THE AMOUNTS WERE ADVANCED AT RS.1,51,000/- AND RS.49,000/- BY BOTH OF THEM HENCE THE APPELLANTS S HARE BEING RS.ONE LAC ONLY, WAS OFFERED FOR TAX. IT BEI NG A MISTAKE AT THE TIME OF SURVEY WAS RECTIFIED WITH PR OPER EVIDENCE AND CONFIRMATION HENCE CONFIRMATION OF ADD ITION MADE AT RS.ONE LAC ON THE GROUND OF DELAYED RETRACT ION IS UNJUSTIFIED, IMPROPER, BAD IN LAW AND DESERVES TO B E SET ASIDE. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 3 3. THAT THE LEARNED CIT(A) ERRED IN LAW IN CONFIRMING ADDITION MADE AT RS.13,27,300/- BEING THE ENTIRE AMOUNT OF CHEQUES/CASH DEPOSITED BY THE APPELLANT IN CURRENT ACCOUNT WITH BANK DURING THE YEAR U/S 68 OF THE ACT . HE ERRED IN LAW IN NOT APPRECIATING THE FOLLOWING VITA L FACTS:- A) OUT OF RS.13.27 LACS, CHEQUES DEPOSITED IN BANK WERE RS.6.71 LACS WHICH WERE DULY CONFIRMED FROM THE DEBTORS OR RECEIVED BY WAY OF REPAYMENTS OF LOANS GIVEN. B) DEPOSIT OF CASH OF RS.6.56 LACS IN THE BANK ACCOUNT REPRESENTS CASH OF RS.4 LACS SURRENDERED AS INCOME OUT OF CASH FOUND DURING SURVEY WHICH WERE OFFERED FOR TAX AND BALANCE AMOUNT WAS ALSO RECOVERED FROM DEBTORS AGAINST ADVANCES GIVEN. ADDITION SO MADE AND CONFIRMED WITHOUT CONSIDERING EXPLANATIONS ALONG WITH DOCUMENTARY EVIDENCES IS WHOLLY UNJUSTIFIED, IMPROPER, BAD IN LAW AND DESERVES TO B E QUASHED. 4. THAT THE LEARNED CIT(A) FURTHER ERRED IN LAW IN CON FIRMING THE ADDITION OF RS.6,21,591/- BEING THE AMOUNT OF C REDIT ENTRIES DURING THE WHOLE YEAR IN SAVINGS BANK ACCOU NT OF THE WIFE OF THE ASSESSEE (SMT. JYOTIBALA) WHO IS BE ING ASSESSED TO TAX AND SUCH ACCOUNT WAS PROP3ERLY REFL ECTED IN HER BOOKS. CONSIDERING THE CREDIT SIDE OF THE B ANK ACCOUNT IGNORING THE WITHDRAWALS MADE FROM TIME TO TIME AND DEPOSITS BEING COLLECTION OF CHEQUES EXCEPT CAS H DEPOSIT OF RS.20,000/- ONLY VITIATED THE ASSESSMENT ORDER AND ITS CONFIRMATION IS WHOLLY UNJUSTIFIED, IMPROPE R, BAD IN LAW. 5. THE APPELLANT FURTHER CRAVES LEAVE TO ADD, ALTER AN D/OR TO AMEND THE AFORESAID GROUNDS OF APPEAL AS AND WHEN REQUIRED. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 4 2. THE FACTS OF THE CASE ARE THAT A SURVEY ACTION U/S 13 3A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS TH E ACT) WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E. THEREAFTER, CASE OF THE ASSESSEE WAS PICKED UP FOR SCRU TINY ASSESSMENT. IT IS OBSERVED BY THE A.O. THAT DURING T HE COURSE OF SURVEY PROCEEDINGS, THE ASSESSEE HAD SURRENDERED AN AMOUNT OF RS.15,00,847/- IN DIFFERENT HEADS. IN RESPECT OF DEBTORS A SUM OF RS.7,88,150/- WAS SURRENDERED, IN RESPECT OF ADVANCE PAYMENT TO PURCHA SE LAND OF RS.2 LAKHS, EXCESS CASH FOUND OF RS.4,14,000/ - AND INVESTMENT IN PURCHASES OF RS.98,697/-. THE ASSESSEE DID NOT DISCLOSE THE ENTIRE SURRENDER, WHICH WAS MADE DU RING THE COURSE OF ASSESSMENT. IN RESPECT OF DEBTORS, TH E ASSESSEE FILED CERTAIN EVIDENCES. THE A.O. ON THE BAS IS OF THE EVIDENCE SUPPLIED RESTRICTED THE ADDITION IN RES PECT OF DEBTORS OF RS.3,78,150/-. FURTHER, THE A.O. MADE ADD ITION [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 5 IN RESPECT OF PROFIT OF RS.24,157/-. THE A.O. ALSO MADE ADDITION IN RESPECT OF DEBTS OF RS.26,500/- AND AMOUN TS DEPOSITED IN THE BANK ACCOUNT OF RS.19,48,891/-. AGAI NST THIS, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) , WHO PARTLY ALLOWED THE APPEAL, THEREBY THE LD. CIT(A) CONFI RMED THE ADDITION OF RS.3,78,150/- AND DELETED THE ADDITION MADE ON ACCOUNT OF GROSS PROFIT, BAD DEBT AND CONFIRMED THE OTHER EXPENDITURE. THE LD. CIT(A) ALSO CONFIRME D THE ADDITION OF CASH DEPOSITS OF RS.19,48,891/-. AGGRIEV ED AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THI S TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE SH. B.D. NAGAR REITER ATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. TH E SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE AS UNDER: [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 6 [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 7 [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 8 [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 9 4. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 10 5. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. GROUND NO.1 IS AGAINST CONFIRMING THE ADDITION OF RS.3,78,150/- IN RESPECT OF THE DIFFERENCE IN THE AMOUNT SURRENDERED DURING THE COUR SE OF SURVEY AND INCOME OFFERED FOR FILING OF RETURN OF IN COME. I HAVE GONE THROUGH THE EVIDENCE FILED BY THE ASSESSEE. THE AMOUNT WAS RETRACTED EVEN FILING OF THE RETURN OF INC OME. IN RESPECT OF AMOUNT OF RS.1,58,600/-, THE ASSESSEE H AS DEMONSTRATED THAT THE AMOUNT WAS GIVEN DURING THE ASSESSMENT YEAR 2003-04. THEREFORE, THE AMOUNT WAS REQUIRED TO BE ADDED IN THAT YEAR. THE ASSESSING OFFICE R IS DIRECTED ACCORDINGLY. REGARDING THE AMOUNT OF RS.1,19,550/-, IT IS STATED THAT THE AMOUNT OUTSTANDING WAS RECEIVED BACK BEFORE THE DATE OF SURVEY. IN SUPPO RT OF THIS, THE ASSESSEE HAS DRAWN MY ATTENTION TO THE WRITT EN [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 11 SUBMISSIONS. HOWEVER, NO SUPPORTING EVIDENCE HAS BE EN FILED. THEREFORE, I SUSTAIN THIS ADDITION. REGARDING AMOUNT OF RS.1 LAKH, IT IS STATED THAT THE LD. CIT(A) HAS WRO NGLY CONFIRMED THE ADDITION OF RS. 2 LAKHS. IN FACT, THE L AND WAS JOINTLY OWNED BY TWO PERSONS, THEREFORE, THE ADDITIO N SHOULD HAVE BEEN RESTRICTED TO RS.1 LAKH. I HAVE PE RUSED THE AGREEMENT. AS PER THIS AGREEMENT, THE LAND IS JOI NTLY OWNED. THEREFORE, THE ASSESSING OFFICER SHOULD HAVE MADE ADDITION OF RS. 1 LAKH ONLY. I FIND MERIT INTO THE CONTENTION OF THE ASSESSEE. THEREFORE, THE A.O. IS DIRECTED T O DELETE THIS ADDITION. GROUND NO.1 IS PARTLY ALLOWED. 6. GROUND NO.2 IS AGAINST CONFIRMING THE ADDITION OF R S. 2 LAKHS. I HAVE ALREADY DISCUSSED THIS IN GROUND NO.1 AND NEEDS NO SEPARATE ADJUDICATION. GROUND NO.2 IS ALLOWED. 7. GROUND NOS.3 & 4 ARE REGARDING CONFIRMING ADDITION OF RS.13,27,300/- AND CONFIRMING ADDITION OF RS.6,21,591 /-. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 12 IN RESPECT OF CONFIRMING THE ADDITION OF RS.13,27,30 0/-, IT IS STATED THAT OUT OF RS.13.27 LAKHS, CHEQUE DEPOSIT I N BANK WAS AMOUNTING TO RS.6.71 LAKHS, WHICH WAS DULY CONFIRMED BY THE DEBTORS AND OUT OF REMAINING DEPOSIT OF CASH OF RS.6.56 LAKHS, RS.4 LAKHS WAS SURRENDERED OUT OF CASH DURING THE SURVEY, WHICH WAS OFFERED FOR TAX AND BALANCE AMOUNT WAS ALSO RECOVERED FROM DEBTORS AGAINST ADVANCES GIVEN. IT IS STATED THAT CREDIT IN CURRENT ACC OUNT WITH MANDSAUR KHETRIYA GRAMIN BANK WAS OF RS.13,27,300/-. THE A.O. MADE ADDITION OF THE TOTAL C REDIT ENTRIES APPEARING IN THE BANK ACCOUNT U/S 68 OF THE ACT . IT IS STATED THAT DETAILED EXPLANATION WAS SUBMITTED ALONG WITH THE DOCUMENTARY EVIDENCES FOR EACH AND EVERY CRED IT ENTRY. IT IS SUBMITTED THAT A SUM OF RS.6,56,500/- W AS DEPOSITED BY WAY OF CHEQUES. THE NARRATION OF SUCH DEPOSITS IS GIVEN IN RESPECT OF THE CASH DEPOSIT. I T IS STATED [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 13 THAT RS.46,500/- WAS SURRENDERED DURING THE SURVEY AND DEPOSIT OF RS.2 LAKHS WAS OUT OF THE CASH SURRENDERED DURING THE SURVEY. FURTHER, IT IS CONTENDED THAT A S UM OF RS.75,000/-, RS.1 LAKH AND RS.35,000/- WERE REALISED F ROM THE DEBTORS. SO FAR THE CHEQUE DEPOSIT IN BANK ACCOUNT , THE ASSESSEE HAS GIVEN SUPPORTING EVIDENCES, THEREFOR E, THE A.O. IS DIRECTED TO DELETE THIS ADDITION. HOWEVER, IN RESPECT OF THE CASH DEPOSIT OF RS.6.66 LAKHS, IT IS STATED THA T RS.4,46,500/- IS OUT OF VOLUNTARY SURRENDER MADE BY T HE ASSESSEE DURING THE COURSE OF SURVEY. HENCE, THE A. O. IS DIRECTED TO DELETE THIS ADDITION. IN RESPECT OF THE REMAINING AMOUNT OF RS.2,10,000/-, IT IS STATED TO HAVE BEEN RE CEIVED FROM THE REALISATION OF SALE PROCEEDS. THE ASSESSEE HAS NOT FILED ANY CONFIRMATION FROM THE DEBTORS. HENCE, THE ADDITION OF RS.2,10,000/- IS SUSTAINED. THIS GROUND OF ASSESSEES APPEAL IS PARTLY ALLOWED. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 14 8. IN RESPECT OF GROUND NO.4, IT IS STATED THAT THE AM OUNT OF CREDIT ENTRIES DURING THE WHOLE YEAR IN THE SAVING S BANK ACCOUNT OF WIFE OF THE ASSESSEE SMT. JYOTIBALA JAIN, WHO IS ASSESSED TO TAX AND THE AMOUNT WAS PROPERLY REFLECTED I N THE BOOKS OF ACCOUNTS HAS BEEN ADDED. IN SUPPORT OF T HIS, THE ASSESSEE HAS FILED HER RETURN OF INCOME OF THE CU RRENT AND EARLIER YEARS WERE FILED AND AS PER THE BALANCE SHEE T, AS ON 31.3.2005 & 31.3.2004, ACCUMULATED CAPITAL WAS RS.3,40,578/- AND RS.4,08,721/-. LOOKING TO THE EVIDENCES SUBMITTED AND MORE PARTICULARLY, THE AMOUNT WHICH HAS BEEN CREDITED IN THE ACCOUNT OF THE WIFE OF THE ASSESSEE WHO HERSELF IS ASSESSED TO TAX, IT IS ALSO IN FORMED THAT NO ACTION HAS BEEN TAKEN IN HER HANDS. I THEREFORE , UNDER THESE FACTS CANNOT SUSTAIN THESE ADDITIONS. ACCORDINGLY, THE A.O. IS DIRECTED TO DELETE THIS ADD ITION. GROUND NO.4 IS ALLOWED. [ITA NO.112/IND/2018] [SHRI SUDHIR KUMAR JAIN, DIST. RATLAM] ] 15 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.112/IND/2018 FOR THE A.Y. 2004-05 IS PARTLY ALLOWE D. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 . 12.2019. SD/- (KUL BHARAT) JUDICIAL MEMBER INDORE; DATED : 26/12/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE