Aruna Ashok Bhat, V. Assistant Commissioner of Income-tax,

ITA 1596/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9461 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-03-2017
• Assessment Year: misc
• Appeal Filed On: 04-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S SINGH
• Keywords: Search and seizure; Loose papers; Corroborative evidences; Block assessment
• Section: 263; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1596/PUN/2015 BLOCK PERIOD : 1996-97 TO 2002-03 SMT. ARUNA ASHOK BHAT, 1348, SADASHIV PETH, PUNE 411 030. PAN : AARPB9106F. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), PUNE. PMT BUILDING, SWARGATE, PUNE. . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI S. SINGH. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (A)-13, PUNE DT. 06.10.2015 FOR THE BLOCK ASSESSMENT PERIOD 01.04.1995 TO 13.09.2001. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- / DATE OF HEARING : 30.03.2017 / DATE OF PRONOUNCEMENT: 17.05.2017 2 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE PARTNERS IN VARIOUS FIRMS AND PROPRIETARY CONCERN NAMELY, M/S LAXMI KESHAV UDYOG. SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED IN THE ASSESSEES BUSINESS AND RESIDENTIAL PREMISES AT PUNE ON 13.09.2001. DURING THE COURSE OF SEARCH, VARIOUS INCRIMINATING MATERIAL AND CASH WERE FOUND AND SEIZED. ASSESSEE FILED RETURN OF INCOME U/S 158BC(C) ON 31.10.2003 DECLARING INCOME OF RS.17,52,214/-. THEREAFTER, THE ASSESSMENT WAS FRAMED U/S 158BC(C) ON 31.10.2003 AND THE TOTAL UNDISCLOSED INCOME WAS ASSESSED AT RS.17,52,214/-. SUBSEQUENTLY, LD.CIT VIDE ORDER DT.27.02.2006 PASSED U/S 263 OF THE ACT SET ASIDE THE ASSESSMENT ORDER THAT WAS PASSED U/S 158BC(C) ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND WAS PREJUDICIAL TO THE INTEREST OF REVENUE. LD.CIT ACCORDINGLY DIRECTED AO TO VERIFY THE ISSUE OF LOAN AMOUNT ACCEPTED AND INTEREST PAID DURING THE YEAR. PURSUANT TO THE DIRECTIONS OF LD.CIT, ASSESSMENT WAS RE-FRAMED U/S 158BC(C) R.W.S. 263 VIDE ORDER DT.28.12.2006 AND THE TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD WAS DETERMINED AT RS.20,34,235/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.06.10.2015 (IN APPEAL NO.PN/CIT(A)-13/ACIT CENTRAL CIR 2(2)/49 AND 50/2015-16 DT.06.10.2015) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS :- 1. THE HON.CIT (APPEALS) 13, PUNE WRONGLY CONFIRMED THE ADDITION OF RS.2,82,021/- MADE BY THE AO. 2. MERELY ON THE BASIS OF APPELLANTS MANAGERS STATEMENT DURING THE SEARCH THE AMOUNT OF RS.2,82,021/- WAS ADDED TO INCOME WITHOUT 3 TAKING THE COGNIZANCE OF NEW SUBMISSION FULLY EXPLAINING THE AMOUNTS OF LOANS AND INTEREST. 3. THE APPELLANT PRAYS FOR DELETION OF RS.2,82,021/- ADDED TO THE INCOME OF THE APPELLANT BY AO AND THEREAFTER CONFIRMED THE SAME BY CIT(A). 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED, THOUGH ON THE EARLIER DATE OF HEARING I.E., ON 21.12.2016, THE HEARING OF THE CASE WAS ADJOURNED TO THE PRESENT DATE ON THE WRITTEN REQUEST OF ASSESSEE. IN THE ABSENCE OF ANY REPRESENTATION FROM THE ASSESSEE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE. 4. LD.CIT IN THE ORDER PASSED U/S 263 HAS NOTED THAT AT THE TIME OF SEARCH, SOME LOOSE PAPERS WERE FOUND WHICH REVEALED THAT ASSESSEE HAD ACCEPTED A LOAN OF RS.9,86,170/- AND INTEREST AT RS.2,95,851/- TOTALING TO RS.12,82,021/-. IN THE RETURN OF INCOME THAT WAS FILED FOR THE BLOCK-PERIOD 1996-97 TO 2002-03, THE ASSESSEE DISCLOSED THE UNDISCLOSED INCOME OF ONLY RS.10,00,000/- AS AGAINST THE INCRIMINATING MATERIAL PERTAINING TO RS.12,82,021/-. THE AO WHILE FRAMING THE ASSESSMENT ALSO ACCEPTED THE UNDISCLOSED INCOME OF RS.10,00,000/- AS DECLARED BY ASSESSEE. LD.CIT THUS NOTED THAT IN THE RETURN OF INCOME THE UNDISCLOSED INCOME WAS SHOWN AT RS.10,00,000/- WHICH WAS ALSO ACCEPTED BY THE AO WITHOUT MAKING ANY ENQUIRIES. HE ACCORDINGLY IN THE ORDER PASSED U/S 263 OF THE ACT DIRECTED THE AO TO BRING OUT THE FACTUAL POSITION FROM THE SEIZED LOOSE PAPERS AND MAKE ADDITION OF RS.2,82,021/- (RS.12,82,021/- - RS.10,00,000/-). THEREAFTER IN THE ORDER PASSED U/S 158BC(C) R.W.S 263, AO MADE ADDITION OF RS.2,82,021/-. AGGRIEVED BY THE ORDER OF 4 AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO CONFIRMED THE ADDITION MADE BY THE AO BY HOLDING AS UNDER : 2.1 DURING THE SEARCH, CERTAIN LOOSE PAPERS (PAGE NO.13, 14 OF BUNDLE NO.2) WERE FOUND. ON THE BASIS OF WHICH, THE APPELLANT DECLARED THE UNDISCLOSED INCOME OF RS.10,00,000/- FOR THE BLOCK PERIOD. THE LEARNED AO STATED THAT THE SEIZED PAPER SHOWS THE LOAN AMOUNT OF RS.9,86,170/- AND INTEREST AMOUNT OF RS.2,95,851/- TOTALING TO RS.12,82,021 FOR THE AY 1996-97 AS AGAINST THE AMOUNT OF THE ADDITIONAL INCOME DECLARED BY THE APPELLANT ON THIS ACCOUNT OF RS.10,00,000/-. THEREFORE, THE LEARNED AO ADDED THE BALANCE AMOUNT OF RS.2,82,021 TO THE APPELLANTS TOTAL INCOME IN THE ASSESSMENT ORDER PASSED BY HIM ON 28.12.2006. 2.2 DURING THE APPELLATE PROCEEDINGS BEFORE ME, THE APPELLANT HAS REPEATED THE SAME ARGUMENTS, WHICH WERE ADVANCED BY HER DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT SUBMITTED THAT THE LEARNED AO FAILED TO TAKE THE COGNIZANCE OF HER SUBMISSION FILED VIDE LETTER DATED 16.11.2006. THE RELEVANT PART OF HER THIS LETTER IS REPRODUCED AS UNDER : 2. LOAN AMOUNT OF RS.10,00,000/- THE POINT RAISED BY YOU IS THAT THE LOAN AMOUNT OF RS.10,00,000/- (RS. TEN LACS) CONSIDERED BY AO AS AGAINST RS.12,82,021/-. IT IS TO BE NOTED THAT ON THE DATE OF SEARCH ON FINDING OF SOME LOOSE PAPERS BY I T DEPARTMENT, MR. KATDARE HAD AGREED TO ACCEPT CASH LOANS IN HIS MANAGERIAL CAPACITY OF MY PROPRIETARY BUSINESS NAMELY WS LAXRNI KESHAV UDYOG FOR RUNNING BUSINESS ACTIVITIES. THE DEPARTMENT FOUND THE LOAN AMOUNT OF RS 9,86,170 & INTEREST AMOUNT OF RS 2,95,851 FROM LOOSE PAPERS MR. KATDARE DID NOT AGREE AT ALL ABOUT THE EXACT AMOUNT OF LOAN AS WELL AS INTEREST. AT THE SAME MOMENT NOBODY COULD REMEMBER THE EXACT AMOUNT OF LOAN AS ONE WAS UNDER MENTAL PRESSURE. MOREOVER THE NOTINGS WERE MERELY RECORDED ON ROUGH PAPERS & NOT AT ALL RECORDED IN THE BOOKS OF ACCOUNTS. THEREAFTER WE MADE A DETAILED EXERCISE OF THE ISSUE & CAME TO THE CONCLUSION THAT IN THE ABOVE MENTIONED LOOSE PAPERS SOME NAMES WERE REPEATED TWICE OR THRICE BECAUSE THE FIGURES MENTIONED OUTSTANDING AMOUNTS ON VARIOUS DATES OF THE VARIOUS PERSONS WHICH DOES NOT MEAN THAT THE LOAN IS RECEIVED AT EACH POINT OF TIME, IN REALITY THE LOAN ACCEPTED WAS MUCH LESS THAN WHAT WAS STATED AND LOAN AMOUNT & INTEREST PAID THERE ON WAS LESS THAT RS. 10 LAKHS. TO AVOID THE UNNECESSARY LITIGATIONS, 1 DECLARED AN INCOME OF RS 10 LAKHS FOR A Y 1996-97 IN MY BLOCK RETURN COMPRISING OF THE YEARS. A.Y. 1996-97 TO A.Y. 2002-03. THE SAID ISSUE WAS EXPLAINED TO THE A.O. IN DETAILS AT THE TIME OF BLOCK ASSESSMENT HEARING. AT THE TIME OF SEARCH WHEN ONE IS UNDERGOING 5 TREMENDOUS TENSION ON HIS MERE ADMITTING ON BEING ASKED FIGURE WISE SHOULD NOT BE HELD CORRECT. THEREAFTER BEFORE TILING BLOCK ASSESSMENT RETURN AS MENTIONED EARLIER WE INQUIRED INTO THE REALITY & BY COLLECTING ACCURATE DATA, I FOUND RS. 10 LAKHS AS CORRECT LOAN AMOUNT & INTEREST AMOUNT & THE SAME WAS DECLARE AS INCOME. IN VIEW OF THE ABOVE I SINCERELY REQUEST YOUR GOOD SELF TO CONSIDER RS 10 LAKHS AS LOAN AMOUNT & NOT TO ADD RS 2,82,021 TO MY INCOME ON THIS ACCOUNT. I SHALL BE GLAD TO FURNISH FURTHER INFORMATION ON BEING ASKED. FINDINGS 2.3 I HAVE CONSIDERED THE APPELLANTS EXPLANATION. THE APPELLANT HAS STATED THAT AFTER CARRYING OUT THE DETAILED ANALYSIS OF THE LOOSE PAPERS SEIZED DURING THE SEARCH, SHE CONCLUDED THAT THE LOAN AMOUNT AND INTEREST PAID THEREON WAS LESS THAN RS.10,00,000/-. HOWEVER, SHE DECLARED THE ADDITIONAL INCOME OF RS.10,00,000/- IN THE BLOCK RETURN TO AVOID UNNECESSARY LITIGATION. THE APPELLANT STATED THAT THUS, SHE HAS CORRECTLY DECLARED THE LOAN AMOUNT AND INTEREST AMOUNT TOTALING RS.10,00,000/- IN HER RETURN OF INCOME. 2.4 I DO NOT FIND THE APPELLANTS EXPLANATION ACCEPTABLE, BECAUSE THE APPELLANT HAS NOT SUBSTANTIATED HER EXPLANATION BY FURNISHING THE ANALYSIS OF THE RELEVANT LOOSE PAPERS. THE APPELLANT HAS NOT ESTABLISHED AS TO WHY THE CORRECT TOTAL OF RS.12,82,021/- SHOULD NOT BE ACCEPTED AS HER TOTAL UNDISCLOSED INCOME AS AGAINST RS.10,00,000/- DECLARED BY HER. THIS IS BECAUSE, IF PART OF THE SEIZED PAPER IS TAKEN TO BE CORRECT THEN THE BALANCE PART OF THE SAME PAPER IS ALSO DEEMED TO BE CORRECT UNLESS PROVED OTHERWISE. IN THE FACTS OF THE CASE, IT IS THE APPELLANT, WHO CONTENDS THAT PART OF THE SEIZED PAPER IS NOT CORRECT. HENCE, THE ONUS IS ON THE APPELLANT TO SUBSTANTIATE HER CONTENTIONS WITH THE SUPPORTING EVIDENCE. THE APPELLANTS STATEMENT WITHOUT SUPPORTING EVIDENCE CANNOT BE ACCEPTED AS IT IS . ACCORDINGLY, I AGREE WITH THE LEARNED AO THAT IN THE ABSENCE OF CONVINCING EXPLANATION FROM THE APPELLANT, AMOUNT OF RS.2,82,021/- NEEDS TO BE ADDED TO THE APPELLANTS TOTAL INCOME. ACCORDINGLY, I CONFIRM THE ADDITION OF RS.2,82,021/-. AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO AND LD.CIT(A). 6. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THE ORIGINAL RETURN OF INCOME THAT WAS FILED BY THE ASSESSEE, ASSESSEE HAS DECLARED ADDITIONAL UNDISCLOSED 6 INCOME OF RS.10,00,000/- AS AGAINST THE SEIZED PAPER WHICH SHOWED AN AMOUNT OF RS.12,82,021/- AND THE ADDITIONAL UNDISCLOSED INCOME DECLARED BY ASSESSEE WAS ACCEPTED BY AO. LD.CIT THEREFORE DIRECTED THE AO TO MAKE THE ADDITION OF BALANCE AMOUNT OF RS.2,82,021/- WHILE DECIDING THE APPEAL AGAINST THE ORDER PASSED BY AO U/S 158BC(C) R.W.S. 263 OF THE ACT. WE FIND THAT LD.CIT(A) WHILE CONFIRMING THE ACTION OF AO HAS NOTED THAT ASSESSEE WAS NOT ABLE TO JUSTIFY AS TO WHY THE UNDISCLOSED INCOME OF RS.10,00,000/- DECLARED BY HER BE ACCEPTED AS AGAINST THE CORRECT AMOUNT OF RS.12,82,021/-. HE WAS OF THE VIEW THAT WHEN PART OF THE SEIZED PAPER IS TAKEN TO BE CORRECT THEN THE BALANCE PART OF THE SAME PAPER IS ALSO DEEMED TO BE CORRECT UNLESS PROVED OTHERWISE. HE HAS FURTHER NOTED THAT ASSESSEE HAD NOT GIVEN ANY CONVINCING EXPLANATION. BEFORE US ALSO NO MATERIAL HAS BEEN PLACED BY THE ASSESSEE TO SUPPORT ITS STAND NOR HAS ASSESSEE POINTED OUT ANY FALLACY IN THE FINDING OF LD. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 17 TH DAY OF MAY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 17 TH , MAY, 2017. YAMINI 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT(A)-12. CIT(CENTRAL), PUNE. , , / DR, ITAT, A PUNE; [ / GUARD FILE. / BY ORDER, //// // TRUE COPY // T / // // // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE.