Gulabchand Ratanchand, rep by Smt. Jasoda, CHENNAI V. ITO, CHENNAI

ITA 1225/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8346 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: LAKSHMICHAND NAHATA
• Keywords: Unexplained investment
• Section: 143(3); 133A; 234B; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.1225/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) SMT. G.JASODA, L/R OF GULABCHAND RATANCHAND 85/4, KHATOD PLAZA, NSC BOSE ROAD, CHENNAI-600 079. VS THE INCOME TAX OFFICER, NON-CORPORATE WARD-4(4), CHENNAI. PAN:AAKPG6965E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.LAKSHMICHAND NAHATA, C.A /RESPONDENT BY : MR. SUPRIYO PAL, JCIT /DATE OF HEARING : 18 TH JULY,2016 /DATE OF PRONOUNCEMENT : 7 TH OCTOBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEES LEGAL REPRESENTATIVE SMT. JASODA AGGRIEVED BY THE ORDER O F THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, CHE NNAI DATED 15.03.2016 IN ITA NO.11/CIT(A)-5/14-15 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN THIS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS AS FOLLOWS :- 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF - 2 ITA NO.1225MDS/2016 I) DIFFERENCE IN STOCK AMOUNTING TO RS.69,91,866/- II) CASH OF RS.2,66,000/- SEIZED DURING THE COURSE OF SURVEY AND III) THE DIFFERENCE IN INVENTORY BEING WEIGHT OF SILVER AMOUNTING TO RS.2,56,096/- 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 234A, 234B & 234C OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN S ILVER ARTICLES FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 23.01.2012 ADMITTING INCOME OF RS.13,72,590/-, PURS UANT TO SURVEY IN THE PREMISES OF THE ASSESSEE ON 18.03.20 11 UNDER SECTION 133A OF THE ACT. DURING THE COURSE OF SURVE Y, THE ASSESSEE HAS ADMITTED EXCESS STOCK OF SILVER ARTICL ES 131.922 KGS., VALUED AT RS. 69,91,866/- AND OFFERED THE SAM E AS UNEXPLAINED INVESTMENTS. HOWEVER, IN THE RETURN OF INCOME HE DID NOT DISCLOSE THE VALUE OF EXCESS STOCK ADMIT TED DURING THE COURSE OF SURVEY. AT THE TIME OF HEARING, THE ASSESSEES REPRESENTATIVE FILED STOCK RECONCILIATION STATEMENT JUSTIFYING THE RETURN FILED BY HIM AND TO SHOW THAT THERE WAS NO EXCESS 3 ITA NO.1225MDS/2016 STOCK WITH THE ASSESSEE AT THE TIME OF SURVEY. SUBS EQUENTLY, THE ASSESSEE EXPIRED ON 19.12.2012 AND THEREAFTER T HE CASE WAS REPRESENTED BY THE ASSESSEES WIFE SMT. G.JASOD A. IN THE SCRUTINY ASSESSMENT PROCEEDINGS, THE LEARNED AS SESSING OFFICER WITHOUT VERIFYING THE RECONCILIATION STATEM ENT SUBMITTED BY THE ASSESSEE SIMPLY MADE ADDITION IN T HE HANDS OF THE ASSESSEE BY STATING AS FOLLOWS:- 4. AS PER THE SURVEY REPORT THE DIFFERENCE IN STO CK OF SILVER ARTICLES (131.922 KGS VALUED AT RS.53,000/- PER KG) RS.69,91,866/-. HENCE, RS.69,91,866/- ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 5. AS PER THE SURVEY REPORT, CASH OF RS.2,66,000/- SEIZED BY THE STATE REVENUE AUTHORITIES DERIVED FROM THE S ALE OF UNACCOUNTED SILVER ARTICLES ADDED AS UNACCOUNTED INVESTMENT. HENCE, RS.2,66,000/- ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6. AS PER THE SURVEY REPORT, THERE WAS AN ARITHMETI CAL MISTAKE IN TOTALING PAGE 3 OF THE INVENTORY (AN/RR/SILVER/R) THE TOTAL OF PAGE 1 WAS TAKEN AS 101.93 KGS. INSTEAD OF 105.925 KGS. THE DIFFERENCE IN THE WEIGHT OF SILVER IS 4.832 KGS WHICH WORKS OUT TO RS.2,56,0 96/- AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) ALSO CONFIRMED THE ORDER OF THE LEARNED A SSESSING OFFICER ACCEPTING HIS VIEW. 4 ITA NO.1225MDS/2016 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD SUBMITTED THE RECON CILIATION STATEMENT FOR THE ENTIRE STOCK DEFICIT AND ALSO HAD EXPLAINED THE DIFFERENCE IN INVENTORY OF 4.832 KGS OF SILVER WHICH WAS NOT EXAMINED BY THE LEARNED ASSESSING OFFICER BUT S IMPLY MADE ADDITION BASED ON THE ADMISSION AT THE TIME OF SURVEY. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER SUBMI TTED THAT THE ASSESSEE HAD ENOUGH CASH IN HIS HANDS TO EXPLAI N THE SOURCE OF RS.2,66,000/- FOUND AT THE TIME OF SURVEY AS HE HAD ALREADY ADMITTED INCOME OF RS. 13,72,590/-. IT WAS THEREFORE REQUESTED THAT THE ADDITIONS MADE BY THE LEARNED AS SESSING OFFICER MAY BE DELETED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDERS OF THE REVENUE AUTHORITIES AND ARGUED IN SUP PORT OF THE SAME. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE LEARNED ASSESSING OFFICER HAS 5 ITA NO.1225MDS/2016 MADE THE ADDITION ONLY ON THE BASIS OF STATEMENT RE CORDED AT THE TIME OF SURVEY WITHOUT VERIFYING THE RECONCILIA TION STATEMENT FILED BY THE ASSESSEE. MOREOVER, AT THIS POINT OF TIME, THE ASSESSEE HAS ALSO EXPIRED AND THE CASE IS REPRESENTED BY HIS WIFE WHO HAS NO KNOWLEDGE IN THE AFFAIRS OF THE ASSESSEE. CONSIDERING THE FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER OF THE LEARNED ASSESSING OFFICER IS PERVERSE BECAUSE IT IS WITHOUT APPLICATION OF MIND WITH RESPECT TO THE PAPER BOOK SUBMITTED BY THE ASSESSEE. THEREFORE THE ADDITIONS MADE BY THE LEARN ED ASSESSING OFFICER WHICH IS SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY SIMPLY FOLL OWING THE ORDERS OF THE LEARNED ASSESSING OFFICER DOES NO T HAVE ANY MERIT. HENCE, IN THE INTEREST OF JUSTICE, WE HE REBY DELETE THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER WITH RESPECT TO RS.69,91,866/- ON ACCOUNT OF DIFFERENCE IN STOCK OF SILVER, RS.2,66,000/- CASH SEIZED AT THE TIME OF SU RVEY, AND RS.2,56,096/- DIFFERENCE IN INVENTORY. ON LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT, WE HA VE NOTHING MORE TO SAY OTHER THAN IT IS CONSEQUENTIAL. 6 ITA NO.1225MDS/2016 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 7 TH OCTOBER , 2016 SD/- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 7 TH OCTOBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF