ITO, WARD-4, Chandrapur V. SMT KASTURIDEVI R. GOYAL, Chandrapur

ITA 151/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1644 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Retraction
• Section: 133A

Judgement Text

1 ITA NO. 151/NAG/2013 . IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO. 151/NAG/2013 ASSESSMENT YEAR : 200 8 09 . THE INCOME TAX OFFICER, SMT. KASTURIDEVI R. GOYAL, WARD 4, CHANDRAPUR. V/S. PROP. M/S GOYAL ENTERPRISES, MUL, DIST. CHANDRAPUR. PANABXPG6338H (APPELLANT) RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI MUKE SH AGRAWAL. DATE OF HEARING : 03 09 - 2015. DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 19 02 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 10. THE GROUND S OF APPEAL READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 28,52,362/ MADE ON ACCOUNT OF STOCK VARIATION FOUND DURING THE COURSE OF SURVEY BY ACCEPTING THE ASSESSEES RECONCILIATION OF STOCK POSITION WHICH WAS ALREADY REJECTED BY THE AO ON THE BASIS OF DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY ACTION U/S 133A OF THE I.T. ACT. 2 ITA NO. 151/NAG/2013 . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS BASED HIS FINDING FOLLOWING THE CASE LAWS REPORTED IN 303 ITR 235 (MAD.) IN THE CASE OF CIT V/S. K. BHUVANENDRAN & OTHERS , AND 243 CTR 588 (MAD) IN THE CASE OF M. NARAYANAN & BROS V/S. ACIT WHICH ARE NOT APPLICABLE FOR THE PRESENT CASE. 2. IN THIS CASE THE ASSESSEE IS ENGAGED IN RETAIL BUSINESS OF TRADING IN CEMENT AND RICE. IN THIS CASE THERE WAS A SURVEY UNDER SECTION 133A AT THE BUSINESS PREMISES OF THE ASSE SSEE. DURING THE SURVEY A STATEMENT OF ASSESSEES SON SHRI SHIVKUMAR GOYAL WAS RECORDED. IN THE SURVEY IT WAS NOTED THAT COMPLETE BOOKS OF ACCOUNTS WERE NOT MAINTAINED AND EXCESS STOCK WERE FOUND. ASSESSEES SON AGREED TO OFFER AN AMOUNT OF ` 28,69,362/ I N THIS REGARD ON BEHALF OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS OFFERED ONLY ADDITIONAL INCOME OF ` 17,000/ . ASSESSEE ALSO SUBMITTED IN THE STATEMENT BEFORE THE ASSESSING OFFICER RETRACTING FROM T HE STATEMENT MADE IN SURVEY. DURING THE COURSE OF ASSESSMENT THE ASSESSEE ALSO SUBMITTED A TRADING ACCOUNT FOR THE PERIOD AS ON THE DATE OF SURVEY. THIS SHOWED THAT NO ADDITION ON ACCOUNT OF UNDISCLOSED CLOSING STOCK NEED TO BE MADE. HOWEVER, THE ASSESSIN G OFFICER WAS NOT CONVINCED. HE HELD THAT THE ASSESSEE AT THE TIME OF SURVEY COMMITTED TO OFFER A DIFFERENCE OF THE STOCK FOUND AND TRADING ACCOUNT PREPARED DURING THE COURSE OF SURVEY. HENCE THE ASSESSING OFFICER PROCEEDED TO ADD THE AMOUNT OF ` 28,69,362 / AS UNDISCLOSED INCOME OF THE ASSESSEE. 3. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) D E L ETED THE ADDITION. LEARNED CIT(APPEALS) HELD AS UNDER : DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT HAD SUBMITTED VARIOUS WORKINGS AND SUPPORTING DOCUMENTS BEFORE THE LD.AO. 3 ITA NO. 151/NAG/2013 . HE FURNISHED ITEM WISE CLARIFICATION ABOUT THE DIFFERENCES IN THE TENTATIVE FIGURES PROVIDED AT THE TIME OF SURVEY AND THE FINAL PROVIDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ALL BOOKS OF ACCOUNTS, PURCHASE BILL AS WELL AS SALE BILLS AND OTHER RELEVANT MATERIAL WERE ALSO PRODUCED BY THE APPELLANT BEFORE THE LD.AO. THE CORRECT PICTURE OF THE SALES, PURCHASES, MILLING AND STOCK S ON DATE OF SURVEY WAS PREPARED AND WAS SUBMITTED BEFORE THE LD.AO. IT COULD BE SEEN THERE FROM THAT UNEXPLAINED DIFFERENCE IN STOCK WAS ` 17,000/ ONLY WHICH WAS OFFERED BY THE ASSESSEE FOR BEING ADDED TO ITS INCOME. THUS ALL THE ABOVE MATERIAL, EXPLAINING THE CORRECTED POSITION OF STOCK AS ON DATE OF SURVEY, WAS BEFORE THE LD.AO. IT WAS FOR THE LD .AO TO THEN ANALYSE AND REBUT THE ASSERTIONS OF THE APPELLANT IN CASE HE WAS NOT SATISFIED WITH THE SUBMISSIONS ON THIS ACCOUNT. THE LD.AO HAS HOWEVER NOT COMMENTED ON THE SAME. IT WAS INCUMBENT UPON THE LD.AO TO AT LEAST CONSIDER THE SUBMISSIONS AND EXPL ANATIONS GIVEN BY THE APPELLANT AND TO REJECT THEM IF NOT FOUND ACCEPTABLE. HOWEVER NO SUCH FINDING HAS BEEN GIVEN BY THE LD.AO. RELIANCE HAS ONLY BEEN PLACED ON THE STATEMENT GIVEN BY SHRI SHIVKUMAR GOYAL DURING THE COURSE OF SURVEY. 4. LEARNED CIT(APPE ALS) ALSO REFERRED TO THE CBDT INSTRUCTION DATED 10 03 2003 WHICH WRITES THAT THE ASSESSEE SHOULD NOT BE FORCED TO CONFESS DURING SURVEY OPERATION. LEARNED CIT(APPEALS) FURTHER REFERRED TO DECISIONS OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V/S. K. B HUVANENDRAN & OTHERS REPORTED IN 303 ITR 235 (MAD.) AND ANOTHER DECISION OF MADRAS HIGH COURT IN THE CASE OF M. NARAYANAN & BROS. V/S. ACIT REPORTED IN 243 CTR 588. THESE DECISIONS WERE RELIED UPON FOR THE PROPOSITION THAT DEHORSE CORROBORATIVE EVIDENCE, STATEMENTS OBTAINED DURING THE COURSE OF SEARCH CANNOT BE THE SOLE BASIS FOR ADDITION OF UNDISCLOSED INCOME. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE C OUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ADDITION IN THIS CASE HAS BEEN MADE ON THE BASIS OF THE STATEMENT OBTAINED FROM THE SON OF THE ASSESSEE DURING THE COURSE OF SURVEY. THE SON HAD STATED TO HAVE OFFERED ` 28,69,362/ ON ACCOUNT OF EXCESS STOCK FOUND. SUBSEQUENTLY PROPER RETRACTION OF 4 ITA NO. 151/NAG/2013 . THE ABOVE STATEMENT WAS SUBMITTED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HIMSELF HAS NOTED THAT BOOKS OF ACCOUNTS OF THE ASSESSEE WERE NOT COMPLETE. HENCE THE ASS ESSEE HAS COMPLETED THE BOOKS OF ACCOUNT AND SUBMITTED COMPUTATION OF AFFAIRS AND STOCK AS ON THE DATE OF SURVEY. THIS ONLY SHOWED THE UNRECONCILIED DIFFERENCE OF ` 17,000/ WHICH WAS OFFERED BY THE ASSESSEE. NOW THE ASSESSING OFFICER IS REJECTING THE AS SESSEES SUBMISSION WITHOUT COMMENTING ON THE VERACITY OF THE SUBMISSIONS AND THE RECONCILIATION GIVEN ONLY BY HOLDING THAT ASSESSEES SON HAS COMMITTED TO OFFER A SUM OF ` 28,69,362/ AS UNDISCLOSED INCOME. WE FIND THAT NOW IT IS SETTLED LAW THAT DEHOURS COGENT MATERIAL NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEMENT OBTAINED DURING THE COURSE OF SURVEY. THIS PROPOSITION WAS UPHELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S. S. K H AD E R K HAN 254 CTR 228. IN THE PRESENT CASE WE FIND THAT IT IS NOT EVEN A CASE THAT THE STATEMENT WAS OBTAINED FROM THE ASSESSEE RATHER IT WAS FROM THE SON OF THE ASSESSEE. THERE WAS PROPER RETRACTION OF THE SAID STATEMENT. THE ASSESSEE HAS ALSO SUBMITTED THE RECONCILIATION SHOWING THE STATEMENT OF AFFAIRS AS ON T HE DATE OF SURVEY AS THE BOOKS OF ACCOUNTS AS ON THE DATE OF SURVEY WERE NOT COMPLETE. THE SAID RECONCILIATION HAS NOT AT ALL BEEN COMMENTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS SIMPLY BASED THE ADDITION ON THE BASIS OF STATEMENT OBTAINED BY THE SON OF THE ASSESSEE AT THE TIME OF SURVEY. ADMITTEDLY ON THE FACTS OF THE CASE AND IN THE LIGHT OF THE CASE LAW FROM THE HONBLE APEX COURT REFERRED HEREIN ABOVE, THE ADDITION IN THIS CASE IS NOT SUSTAINABLE. HENCE WE HAVE NO HESITATION IN UPHOLDING T HE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 5 ITA NO. 151/NAG/2013 . 6. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 24 TH SEPT. , 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR