Rajeeva Kulkarni, V. Asstt.CIT, Cen.Cir.2(1), Pune,

ITA 1630/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3340 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 29-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S GULATI
• Assessee Lawyers: V JAYRAMAN
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI I.C. SUDHIR, JM AND SHRI D. KARUNAKAR A RAO, AM I.T.A. NO. 1630/PN/2008 BLOCK PERIOD: 1997-98 TO 2003-04 RAJEEVA KULKARNI OFFICE NO. 6, 2 ND FLOOR, SWAROOP COMPLEX, KARVE ROAD PUNE-411 004 PAN ACDPK 7364 G APPELLANT VS. ASSTT. CIT CENT. CIR. 2(1) PUNE RESPONDENT APPELLANT BY : SHRI V. JAYRAMAN RESPONDENT BY: SHRI G.S. GULATI ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LOWER AUTHORITIES HAVE ERRED IN LEV YING PENALTY OF RS. 1,26,000/- U/S 158BFA(2) OF THE ACT WITHOUT APPRECIATING THE EVIDENCE ON RECORD AND SUBMISSIONS MADE. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF LOWER AUTHORITIES, MAT ERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. IN SUPPORT OF THE GROUND, THE LEARNED AR SUBMITT ED THAT SEARCH U/S 132 WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE WHEREIN NO INCRIMINATING DOCUMENT WAS FOUND. ITA NO. 1630/PN/2008 RAJEEVA KULKARNI BLOCK PERIOD 1997-98 TO 2003-04 , 2 SIMULTANEOUSLY SURVEY U/S 133A WAS CARRIED OUT AT T HE OFFICE PREMISES OF THE ASSESSEE WHEREIN A ROUGH DIARY WAS FOUND AND IDENTIFIED. CERTAIN RECEIPTS RECORDED IN THE DIARY WERE HELD TO BE NOT DISCLOSED BY THE ASSESSEE. THE TOTAL OF SUC H RECEIPTS WAS RS. 3,97,063/- FOR A.Y. 1999-00, 2001-02 AND 20 02-03. BEFORE THE A.O IT WAS CLAIMED THAT SUCH RECEIPTS WE RE IN FACT OUT OF POCKET EXPENSES AND THE ENTIRE AMOUNT WAS SP ENT. THE A.O ALLOWED AN AMOUNT OF 20% AS EXPENDITURE AGAINST SUCH RECEIPTS AND TREATED THE REMAINING AMOUNT OF RS. 3, 17,650/- AS UNDISCLOSED PROFESSIONAL INCOME. THE LEARNED CI T(A) INCREASED THE ALLOWANCE OF EXPENDITURE FROM 20% TO 50% OF THE UNDISCLOSED RECEIPTS. THE ASSESSEE DID NOT PRE FER ANY APPEAL AGAINST THE SAID FIRST APPELLATE ORDER BEFOR E THE TRIBUNAL. THE A.O HAS IMPOSED PENALTY OF RS. 1,26, 000/- U/S 158BFA(2) OF THE ACT. THE A.O REJECTED THE CONTENTI ON OF THE ASSESSEE THAT THE ADDITION WAS MADE SIMPLY ON ESTIM ATE BASIS AND THE INFORMATION GATHERED DURING THE SURVEY OPER ATION U/S 133A OF THE ACT COULD NOT HAVE BEEN USED AGAINST TH E ASSESSEE IN A PROCEEDINGS U/S 158BC OF THE ACT. THE LEARNED CIT(A) HAS ALSO UPHELD THE PENALTY. 4. THE LEARNED AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: (A) CIT VS. HARKARAN DAS VED PAL (2009) 222 CTR (DE L) 438 (B) SUPER METAL INDUSTRIES (2009) (119 ITD 153 (MUM )(TM) ITA NO. 1630/PN/2008 RAJEEVA KULKARNI BLOCK PERIOD 1997-98 TO 2003-04 , 3 (C) ASSTT. CIT VS. SHANTI KUMAR CHABARA (2009)121 TTJ (JP) 985 (D) DR. HAKEEM S.A. SYED SATHAR VS. ASSTT. CIT (200 9) (120 ITD 1) (CHENNAI) (E) SALUJA HIRE PURCHASE LTD. VS. ASSTT. CIT CENT. CIR. VI KANPUR (2009) (120 ITD 394 (LUCK) (F) PRAKASH TULSIDAS VS. ASSTT. CIT (2000) (73 ITD 444) (NAG) (G) DHIRAJ SURI VS. ADDL. CIT (2006) (98 ITD 187) ( DEL) (H) P.V. DOSHI VS. CIT GUJARAT (1978) (113 ITR 22) (GUJ) (I) JAINARAYAN BABULAL VS. CIT (1988) (170 ITR 399 (BOM) 5. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT ENTIRE RECEIPT/EXPENDITURE WAS NOT RECORDED IN THE BOOKS A ND THERE WAS NO EVIDENCE WITH THE ASSESSEE TO ESTABLISH THE SOURCE OF EXPENDITURE. 6. HAVING GONE THROUGH THE ORDERS OF LOWER AUTHORIT IES IN VIEW OF THE ABOVE SUBMISSION, WE FIND THAT THE LEAR NED CIT(A) HAS THOUGH OBSERVED THAT THE ASSESSEE ADMITTEDLY DO ES NOT HAVE ANY SUCH PROOF TO ESTABLISH THE CLAIM OF EXPEN DITURE OF RS. 3,97,063/- AND EXPENDITURE ALLOWED BY THE A.O A ND LEARNED CIT(A) AT ADHOC FIGURE OF 20% AND 50% RESPE CTIVELY WAS INCORRECT AND PENALTY IS IMPOSED ONLY ON THE IN COME AFTER GIVING APPEAL EFFECT TO THE ORDER OF LEARNED CIT(A) ; BUT HE HAS SUSTAINED THE PENALTY LEVIED BY THE A.O. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH TH E CLAIMED EXPENDITURE OF RS. 3,97,063/- THUS INDEED IT WAS NO T A CASE OF ESTIMATED ADDITION BUT UNESTABLISHED EXPENDITURE. I T IS AN ESTABLISHED PROPOSITION OF LAW THAT ONUS LIES UPON THE CLAIMANT TO ESTABLISH THE GENUINENESS OF ITS CLAIM. THE LEARNED CIT(A) THUS HAS RIGHTLY COMMENTED IN PARA 10 OF THE FIRST ITA NO. 1630/PN/2008 RAJEEVA KULKARNI BLOCK PERIOD 1997-98 TO 2003-04 , 4 APPELLATE ORDER THAT IT IS TRITE LAW THAT THE BURD EN OF PROVING THAT A PARTICULAR EXPENDITURE HAS BEEN LAID OUT OR EXPENDED WHOLLY OR EXCLUSIVELY FOR THE PURPOSES OF PROFESSIO N TO THE EXTEND SHOWN TO HAVE BEEN PAID SO THAT THE ASSESSEE MAY BE ENTITLED TO CLAIM DEDUCTION IS ON THE ASSESSEE. TH E MERE OBJECT OF INCURRING EXPENDITURE IS NOT DECISIVE. F URTHER, MERE PAYMENT BY ITSELF WOULD NOT ENTITLE THE ASSESSEE TO DEDUCTION OF THE SAID EXPENDITURE UNLESS THE SAME WAS PROVED TO BE PAID FOR COMMERCIAL CONSIDERATIONS. UNDER THESE CIRCUMS TANCES, WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORD ER IN SUSTAINING THE PENALTY LEVIED BY THE A.O U/S 158BFA (2) OF THE ACT ON THE CLAIMED EXPENDITURE WHICH REMAINED UNESTABLISHED. THE FACT IN THE CASE OF CIT VS. HAR KARAN DAS (SUPRA) ARE DISTINGUISHABLE HENCE IT IS OF NO ASSIS TANCE TO THE ASSESSEE AS IN THE PRESENT CASE BEFORE US IT IS AN ADMITTED FACT THAT THE EXPENDITURE SHOWN IN THE DIARY FOUND DURIN G THE COURSE OF SURVEY REMAINED TO BE ESTABLISHED BY THE ASSESSEE, AND FURTHER THAT A PECULIAR FACT IN THE PRESENT CAS E IS THAT SURVEY U/S 133A AT THE OFFICE PREMISES OF THE ASSES SEE WAS SIMULTANEOUS TO THE SEARCH ACTION AT THE RESIDENTIA L PREMISES OF THE ASSESSEE. THUS, SURVEY ACTION WHEREIN THE DIARY IN QUESTION CONTAINING UNDISCLOSED INCOME HAS BEEN FOU ND CANNOT BE SEEN IN ISOLATION BUT IN FURTHERANCE OF U NDISCLOSED INCOME OF THE BLOCK PERIOD. THE PROVISION CLEARLY STIPULATES THAT THE UNDISCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE ITA NO. 1630/PN/2008 RAJEEVA KULKARNI BLOCK PERIOD 1997-98 TO 2003-04 , 5 DETERMINED OR COMPUTED ON THE BASIS OF EVIDENCE FOU ND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT S OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION A S ARE AVAILABLE WITH THE A.O AND RELATABLE TO SUCH EVIDEN CE. THESE WERE THE REASONS THAT THE A.O IN THE PRESENT CASE H AS MADE ADDITION OF UNDISCLOSED INCOME REVEALED FROM THE SA ID DIARY U/S 158BC OF THE ACT. NO SUCH FACTS WERE THERE BEF ORE THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. HA RKARAN DAS VED PAL (SUPRA). THE FIRST APPELLATE ORDER IN QUE STION IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 8. CONSEQUENTLY THE APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (D. KARUNAKARA RAO) (I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 31 ST AUGUST 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- (A) II PUNE (4) CIT III PUNE (5) THE D.R. ITAT B BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE ITA NO. 1630/PN/2008 RAJEEVA KULKARNI BLOCK PERIOD 1997-98 TO 2003-04 , 6