Ramesh G. Solanki, Pune V. Deputy Commissioner of Income-tax,

ITA 17/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7369 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJEE
• Keywords: Income from undisclosed sources
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! , '# $ !% , ! & BEFORE SHRI ANIL CHATURVEDI,AM AND SHRI VIKAS AWAST HY,JM #. / ITA NO. 17 /PUN/2016 ( )( / ASSESSMENT YEAR : 2012-13 RAMESH G. SOLANKI MZSK & ASSOCIATES CHARTERED ACCOUNTANTS LEVEL 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE-411 001 PAN : AIDPS7814H ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE: 2(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI NEELESH KHANDELWAL REVENUE BY : SMT. SUMITRA BANERJEE / DATE OF HEARING : 05.10.2017 / DATE OF PRONOUNCEMENT : 06.10.2017 * / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX(APPEALS)-12, PUNE DATED 09.11.20 15 FOR THE ASSESSMENT YEAR 2012-13. 2 ITA NO.17 /PUN/2016 A.Y. 2012-13 2. THE ASSESSEE IN APPEAL HAS ASSAILED THE FINDINGS OF COMM ISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING ADDITION OF RS.5,00,000/- ON ACCOUNT OF ALLEGED EXCESS CASH DECLARED BY ASSESSEE AT THE TIME OF SEARCH BUT NOT OFFERED TO TAX IN HIS RETURN OF INCOME. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECO RDS ARE: SEARCH ACTION U/S. 132 OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) WAS CONDUCTED IN THE CASE OF SOLANKI, OS WAL AND DHUMAVWAT GROUP ON 11.04.2011. SEARCH OPERATION U/S 132 WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE O N 27.04.2011. DURING THE COURSE OF SEARCH PHYSICAL CASH TO THE TUNE O F RS. 5,79,410/- WAS FOUND, EXPLANATION WAS SOUGHT FROM THE ASSESSEE IN RE SPECT OF AFORESAID CASH RECOVERED. ON 28.04.2011, THE ASSESSEE S OUGHT A DAYS TIME TO EXPLAIN THE SOURCE OF CASH. THEREAFTER, STATEMENT OF ASSESSE E WAS RECORDED ON 30.04.2011 WHERE THE ASSESSEE ADMITTED THA T RS.5,00,000/- IS HIS UNACCOUNTED INCOME FOR THE ASSESSMENT YEAR 2012 -13 AND OFFERED THE SAME FOR ADDITION. SUBSEQUENTLY, IN THE RETURN OF INCOM E FILED IN RESPECT OF IMPUGNED ASSESSMENT YEAR, THE ASSESSEE DID NOT OFFER THE AFORESAID AMOUNT OF RS.5,00,000/- TO TAX. DURING ASSESSMEN T PROCEEDINGS, THE ASSESSEE SUBMITTED THAT AFTER COMPLETION OF BOOKS AND RECONCILIATION, IT WAS FOUND THAT THE SAID CASH BELONGS TO THE FIRM M/S. SUREKH JEWELLERS AND HENCE, THE SAME WAS NOT OFFERED TO TAX IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER WAS NOT CON VINCED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE AND MADE ADDITION O F RS. 5,00,000/- IN THE INCOME RETURNED BY THE ASSESSEE. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 27.02.2014, T HE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TA X(APPEALS) 3 ITA NO.17 /PUN/2016 A.Y. 2012-13 AND REITERATED THE SUBMISSIONS MADE BEFORE ASSESSING OFFICE R. THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO REJECTED THE CO NTENTION OF ASSESSEE AND CONFIRMED ADDITION OF RS. 5,00,000/- IN THE HAN DS OF ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBU NAL. 4. SHRI NEELESH KHANDELWAL APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT ASSESSEE IS A PARTNER IN FIRM, M/S. SUREKH JEWELLERS. AT THE TIME OF SEARCH, BOOKS OF ACCOUNT OF THE SAID FIRM WER E NOT COMPLETE AND ASSESSEE WAS NOT MAINTAINING ANY CASH BOOK IN HIS IND IVIDUAL CAPACITY. CASH RS.5,79,410/- WAS FOUND AT THE TIME OF SE ARCH FROM RESIDENTIAL PREMISES OF ASSESSEE. SINCE, THE ASSESSEE COULD NOT RECONCILE CASH IN THE ABSENCE OF COMPLETE BOOKS OF FIRM, THE ASSESS EE DECLARED RS.5,00,000/- AS HIS PERSONAL UNDISCLOSED INCOME. AFTER SEAR CH, WHEN BOOKS OF FIRM WERE COMPLETED, IT TRANSPIRED THAT RS.5,00,000/ - FOUND AT THE RESIDENTIAL PREMISES OF ASSESSEE BELONGS TO THE FIRM. THE BOOKS OF THE FIRM WERE AUDITED AND WERE PRESENTED AT THE TIME OF ASSESSMENT OF THE FIRM. THE SAME WERE ACCEPTED BY THE ASSESSING OFFICER. HENCE, STAND OF THE ASSESSEE IS VINDICATED THAT RS.5,00,000/- BELONGS T O THE FIRM AND NOT TO THE ASSESSEE. SINCE CASH BALANCE OF THE FIRM WAS RECONCILED, THE DECLARATION MADE BY ASSESSEE IN HIS STATEMENT DURING THE COURSE OF SEARCH ON ACCOUNT OF MISTAKEN BELIEF WAS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE, THEREFORE, NO ADDITION OF RS.5,00,000/ - IN THE HANDS OF THE ASSESSEE IS WARRANTED. THE LD. AR IN SUPPOR T OF HIS CONTENTIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS:- I) MORESHWAR MAHADEV BHONDVE VS. ASSISTANT COMMISSI ONER OF INCOME TAX, 151 ITD 224 ( PUNE) II) JYOTICHAND BHAICHAND SARAF & SONGS (P.) LTD. VS . DEPUTY COMMISSIONER OF INCOME TAX, 139 ITD 10 ( PUNE) 4 ITA NO.17 /PUN/2016 A.Y. 2012-13 III) CHAWLA BROTHERS (P.) LTD. VS. ASSISTANT COMMISS IONER OF INCOME TAX, 43 SOT 651 ( MUMBAI) 5. ON THE OTHER HAND, SMT. SUMITRA BANERJEE REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. TH E LD. DR SUBMITTED THAT THE ASSESSEE IN HIS STATEMENT RECORDED ON OATH ADMITTED THAT RS. 5,00,000/- IS HIS UNACCOUNTED INCOME FOR THE ASSE SSMENT YEAR 2012-13. NOWHERE IN HIS STATEMENT DURING SEARCH, THE A SSESSEE HAS EVER CLAIMED THAT RS. 5,00,000/- BELONGS TO THE FIRM AND NO T TO THE ASSESSEE. THE THEORY THAT RS. 5,00,000/- BELONG TO THE FIR M IS AN AFTERTHOUGHT. WHILE COMPLETING BOOKS OF ACCOUNT AFTER DATE OF SEARCH, ASSESSEE HAS MANAGED TO ADJUST RS. 5,00,000/- IN THE C ASH BOOK OF FIRM. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVE S OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF SEARCH RS. 5,79 ,410/- WERE RECOVERED FROM RESIDENTIAL PREMISES OF ASSESSEE. IT IS RELE VANT TO NOTE HERE THAT SEARCH ACTION AT THE PREMISES OF THE FIRM TOOK PLACE ON 11.04.2011 AND SEARCH AT THE RESIDENTIAL PREMISES OF THE ASSESSEE WAS CARRIED ON 27.04.2011 I.E ALMOST AFTER TWO WEEKS. THE STAT EMENT OF ASSESSEE U/S. 132(4) WAS RECORDED ON 28.04.2011. THE ASSE SSEE SOUGHT TIME TO RECONCILE THE BOOKS TO EXPLAIN THE SOURCE OF CASH . THE RECORDING OF ASSESSEES STATEMENT WAS RESUMED ON 30.04.2011. ON THE SAID DATE, ASSESSEE ADMITTED THAT RS. 5,00,000/- IS HIS UNACCOUNTED INCOME FOR THE ASSESSMENT YEAR 2012-13 ON ACCOUNT OF UNEXPLAINED CASH. THUS, ASSESSEE HAD AMPLE TIME AT LEAST TO MAKE OUT WHETHER T HIS AMOUNT OF RS. 5,00,000/- BELONGS TO THE FIRM OR ON HIS PERSONAL ACCOU NT. THE 5 ITA NO.17 /PUN/2016 A.Y. 2012-13 COMMISSIONER OF INCOME TAX(APPEALS) RIGHTLY POINTED THAT TH E ASSESSEE NEVER CLAIMED WHILE RECORDING STATEMENT THAT CASH BELONGS TO THE FIRM. WE CONCUR WITH THE VIEW OF LOWER AUTHORITIES THAT ATTRIBUT ING RS. 5,00,000/- AS CASH OF THE FIRM IS AN AFTERTHOUGHT. WE FIND N O REASON TO INTERFERE WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX(APP EALS). ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 6 TH DAY OF OCTOBER, 2017. SD/- SD/- ( /ANIL CHATURVEDI) ( $ !% /VIKAS AWASTHY) / ACCOUNTANT MEMBER ! / JUDICIAL MEMBER / PUNE; '# / DATED : 6 TH OCTOBER, 2017. SB * + ,-$ .$) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-12, PUNE. 4. THE CIT-12, PUNE 5. &'( !!)* , + )* , , ,-. , / DR, ITAT, B BENCH, PUNE. 6. (/0 12 / GUARD FILE. // TRUE COPY// +3 / BY ORDER, !4 ). / PRIVATE SECRETARY, + )* , / ITAT, PUNE.