D.C.I.T CC - VII,kolkata, Kolkata V. Dr Vijay Kumar Kejriwal, Kolkata

ITA 1868/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1578 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: D S DAMLE FCA SHRI G HANGS
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Tangible material; Documents seized
• Section: 68; 132

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER IT (SS) A NO. 78 / KOL / 2013 ASSESSMENT YEAR :2009-10 DCIT, CENTRAL CIRCLE-VII, AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY,KOLKTA-107 V/S . DR. VIJAY KR. KEJRIWAL FLAT NO.4A & 4B, 78, SAMBHUNATH PANDIT STREET, KOLKATA-20 [ PAN NO.AJHPK 3763 A ] /APPELLANT .. / RESPONDENT ITA NO.1868/KOL/2013 ASSESSMENT YEAR: 2010-11 DCIT, CENTRAL CIRCLE-VII, AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY,KOLKTA-107 V/S . DR. VIJAY KR. KEJRIWAL FLAT NO.4A & 4B, 78, SAMBHUNATH PANDIT STREET, KOLKATA-20 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI D.S. DAMLE, FCA /BY REVENUE SHRI G. HANGSHING, CIT-DR !'# /DATE OF HEARING 01-08-2017 $% # /DATE OF PRONOUNCEMENT 30-08-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEAL BY THE REVENUE ARE DIRECTED AGAINST TH E COMMON ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA DAT ED 15.03.2013. ASSESSMENT WAS FRAMED BY DCIT, CC. VII, KOLKATA U/S 153A/143(3) OF THE IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 2 INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDERS DATED 30.12.2011 FOR ASSESSMENT YEARS 2009-10 & 201 0-11 RESPECTIVELY. SHRI G. HANGSHISNG LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE AND SHRI D.S. DAMALE, LD. AUTHORIZED REP RESENTATIVE APPEARED ON BEHALF OF ASSESSEE. FIRST WE DEAL WITH IT(SS)A NO.78/KOL/2013 FOR A.Y.0 9-10 . 2. SOLE ISSUE RAISED BY REVENUE IN THIS APPEAL IS T HAT LD CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER FOR 1,89,50,000/- ON ACCOUNT OF UNDISCLOSED INCOME. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IN THE PR ESENT CASE IS AN INDIVIDUAL AND PRACTISING AS MEDICAL PROFESSIONAL. THE ASSESSE E IS ALSO A DIRECTOR IN ALPHA MEDICAL SERVICES PVT. LTD., (AMSP FOR SHORT) WHICH IS RUNNING TWO NURSING HOMES ONE AT HOWRAH AND OTHER AT KOLKATA. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S. 132 OF THE ACT ON DOCT ORS GROUP OF CASES. THE SEARCH WAS CONDUCTED AT VARIOUS PLACES ON 02.12.200 9 AND ALSO ON SUBSEQUENT DATES. DURING COURSE OF SEARCH, SEVERAL DOCUMENTS WERE SEIZED AND IMPOUNDED INCLUDING THE DOCUMENTS MARKED AS PAG ES 46 TO 49 OF VKK/1 WHICH ARE THE SUBJECT-MATTER OF THE DISPUTE IN THIS APPEAL OF REVENUE. THE ASSESSEE DURING THE SEARCH PROCEEDINGS HAS GIVEN A STATEMENT U/S. 132(4) OF THE ACT. THE RELEVANT EXTRACT OF THE STATEMENT READ S AS UNDER:- THESE PAGES CONTAIN THE DETAILS OF LOAN TAKEN FR OM VARIOUS PARTIES. DATE-WISE AMOUNT AGAINST THE NAME OF VARIOUS PARTIE S ARE ALSO MENTIONED IN THESE PAGES. THE AMOUNT WRITTEN AGAINS T THE PARTIES FROM WHOM THE LOAN TAKEN BY ALPHA MEDICAL SERVICES PVT. LTD ARE NOT ACTUALLY SHOWN. THE FIGURES ARE HAVING FIVE ZERO SU PPRESSION AS PER EXAMPLE SL.NO.1 SHOWS THE NAME OF LOAN GIVEN MR. M. L. SINGHANIA, AMOUNT AGAINST HIS NAME IS 66 THIS IS ACTUALLY 66,0 0,000 IN THE SAME FASHION OTHER AMOUNT AGAINST THE NAME OF OTHER LOAN GIVEN SHOULD BE UNDERSTOOD. HOWEVER, ASSESSEE, DURING THE ASSESSMENT PROCEEDING S HAS CHANGED HIS STATEMENT BEFORE THE ASSESSING OFFICER BY SUBMITTIN G AS UNDER : I) THE PAGES 46 TO 49 OF IMPOUNDED DOCUMENTS MARKED AS VKK/1 SHOW THE DETAILS OF THE LOAN WHICH IS NOTHING BUT R OUGH WORKING. IT IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 3 CONTAINS THE LIST OF THE PARTIES FROM WHOM THE ASSE SSEE WAS ARRANGING LOAN FOR AMSP. BUT IN SOME OF CASES ONLY THE LOAN WAS RECEIVED BY THE AMSP WHICH WERE DULY RECORDED IN TH E BOOKS OF ACCOUNT. THUS, IT WAS SUBMITTED THAT THE IMPOUNDED DOCUMENT MARKED AS PAGES 46 TO 449 MARKED VKK/1 REPRESENT NO INCOME AND THEREFORE NO ADDITION CAN BE MADE ON THE BASIS OF T HESE SEIZED DOCUMENTS. II) THERE WAS NO OTHER DOCUMENTS, OTHER THAN THE AB OVE DOCUMENTS, WAS FOUND BY THE SEARCH TEAM FROM THE PREMISES OF T HE ASSESSEE WHICH GOES AGAINST ITS EXPLANATION. III) DURING THE SEARCH NO UNDISCLOSED / RECORDED AS SETS WERE FOUND WHICH COULD BE CLAIMED OUT OF AFORESAID ROUGH ESTIM ATE OF LOAN. IV) THERE WAS NO CASH OR BANK BALANCE WHICH WERE UN DISCLOSED. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE BY OBSERVING THAT DETAILS RECORDED ON PAGES 46 TO 49 OF IMPOUNDE D DOCUMENTS VKK/1 CLEARLY SHOW THE NAME OF PERSONS, AMOUNT, DATE, STA TUS ETC. THEREFORE THE PLEA OF THE ASSESSEE THAT HE HAS NOT TAKEN LOAN FRO M ALL THESE PERSONS HAS NO EVIDENTIARY VALUE. MOREOVER, THE ASSESSEE HAS ADMITTED THE FACT IN THE STATEMENT FURNISHED U/S 132(4) OF THE ACT THAT THE LOAN WAS TAKEN FROM THE PARTIES. ACCORDINGLY, AO MADE THE ADDITION OF 1,89,50,000/- AS UNDISCLOSED INCOME OF ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED, WHICH CAN BE COMPLIED AS UNDER:- I) THE SEARCH OPERATION COMMENCED ON 02.12.2009 AT 8 OCLOCK IN THE MORNING AND ENDED ON THE NEXT DAY 03.12.2009 AT 6 A M. DURING THE SEARCH, THE ASSESSEE WAS NOT ALLOWED TO TAKE ANY RE ST OR TO GO FREE. THE SEARCH PROCEEDING WAS CONTINUED FOR 22 HOURS. THE S TATEMENT U/S 132(4) WAS RECORDED DURING EARLY HOURS ON 03.12.200 9 WHEN THE MIND OF ASSESSEE WAS FULLY STRESSED. IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 4 II) THE ASSESSEE BEING A DOCTOR BY PROFESSION WAS N OT AWARE OF THE LEGAL IMPLICATION OF THE STATEMENT. HE HAS ALSO NOT GONE THROUGH THE PAPERS INVENTORIED DURING SEARCH PROCEEDING. III) THE IMPOUNDED DOCUMENTS MARKED AS VKK/1 ON PAG ES 46 TO 49 ARE SHOWING THE LOAN TAKEN BY THE AMSP. THUS THE AMOUNT OF LOAN CANNOT BE TERMED AS INCOME OF ASSESSEE. IV) THE ASSESSEE HAS GIVEN STATEMENT SUBSEQUENTLY B EFORE THE ASSISTANT DIRECTOR OF IT(INV) DATED 11.01.2010 AND 08.03.2010 RESPECTIVELY WHEREIN IT WAS STATED THAT LOAN WAS TA KEN ONLY FROM THOSE PARTIES WHERE MARKED 1 WAS PUT IN THE LAST COLUMN OF THE SEIZED PAPERS. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, LD. C IT(A) DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- I FIND THAT, SAVE AND EXCEPT THE NOTINGS IN PA GES 46 TO 9, NO OTHER CORROBORATIVE EVIDENCE OR DOCUMENT WAS FOUND IN THE COURSE OF THE SEARCH WHICH SUBSTANTIATED THE ASSESSING OFFICER'S CONCLUSION THAT ASSESSEE HAD ACTUALLY EARNED UNDISCLOSED INCOME OF RS.3.76 CRORES DURING AYS. 2008-09 TO 2010-11. NO UNDISCLOSED ASSE TS, VALUABLES ARTICLES OR ANY DOCUMENT EVIDENCING UNRECORDED EXPE NSES WERE RECOVERED FROM ASSESSEES POSSESSION FROM WHICH IT COULD BE INFERRED THAT THE ASSESSEE EARNED SUCH UNDISCLOSED INCOME. E VEN GOING BY ASSESSING OFFICER'S OWN PRESUMPTION; THE ENTRIES IN SEIZED PAGES PERTAINED TO LOANS ALLEGEDLY GRANTED BY THE PARTIES NAMED THEREIN. HOWEVER, NO ATTEMPT WAS MADE TO ESTABLISH THE IDENT ITY OF THE PERSONS FROM WHOM THE LOANS WERE ALLEGEDLY TAKEN. EVEN IN R ESPECT OF INSTANCES WHERE THE LOANS TAKEN COULD BE CO-RELATED, IT WAS F OUND THAT THE LOANS WERE NOT TAKEN BY THE ASSESSEE BUT BY M/S ALPHA MED ICAL SERVICES (P) LTD. IN THE CIRCUMSTANCES, THE TRANSACTIONS DID NOT BELONG TO THE ASSESSEE AND THEREFORE NO ADVERSE INFERENCE COULD B E DRAWN AGAINST THE ASSESSEE WHICH WAS A SEPARATE AND DISTINCT ENTI TY. FURTHER, EVEN AS PER THE ASSESSING OFFICER'S PRESUMPTION, THE AMOUNT S MENTIONED IN THE NOTINGS DID NOT REPRESENT UNDISCLOSED INVESTMENTS O F THE ASSESSEE BUT REPRESENTED THE ALLEGED LOANS ACCEPTED BY THE ASSES SEE WHICH WAS NOT REFLECTED IN HIS BOOKS. IF SUCH CONCLUSION IS PRIMA FACIE ACCEPTED; EVEN THEN THE ADDITION WAS NOT PERMISSIBLE BECAUSE UNDER NONE OF THE EXTANT PROVISIONS OF THE IT CT, THE LOANS COULD BE CONSIDE RED AS INCOME OF THE ASSESSEE. FOR THE REASONS SET OUT HEREINABOVE THERE FORE, I AM SATISFIED THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE THE AO WAS NOT JUSTIFIED IN ASSESSING RS.3,76 CRORES AS IN COME OF THE ASSESSEE. THE ADDITIONS OF RS.15,00,000/-, RS.1,89, 50,000/- AND IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 5 RS.1,58,50,000/- MADE IN THE ASSESSMENT YEARS 2008- 09, 2009-10 AND 2010-11 ARE ACCORDINGLY DELETED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 5. BEFORE US LD. DR VEHEMENTLY RELIED ON THE ORDER OF AO WHEREAS LD. AR FOR THE ASSESSEE SUBMITTED THAT THE LOAN TAKEN BY T HE ASMP CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THERE IS NO PROVISION UN DER THE ACT TO TREAT THE LOAN AS INCOME. THERE IS NO IOTA OF EVIDENCE UNEART HED DURING THE SEARCH PROCEEDINGS SUGGESTING THAT THE ASSESSEE HAS EARNED ANY INCOME FROM UNDISCLOSED SOURCES. THE LD. AR FURTHER SUBMITTED B EFORE US THAT EVEN IT IS BELIEVED THAT THE LOAN HAS BEEN TAKEN BY ASSESSEE T HEN ALSO THE PROVISION OF SEC. 68 OF THE ACT ARE NOT APPLICABLE AS THE SAME A RE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE LD. AR REITERATED THE ARGUMEN TS THAT WERE MADE BEFORE LD. CIT(A) AND ULTIMATELY HE RELIED ON THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT AO HAS MADE THE ADDITION ON THE BASIS OF DOCUMENTS IMPOUNDED DURING THE SEARCH AND SEIZURE WHICH WERE MARKED AS VKK/1. THE SEIZED DOCUMENTS WE RE REPRESENTING THE LOAN TAKEN BY ASSESSEE. THE AO TREATED THE LOAN AS UNDISCLOSED INCOME OF THE ASSESSEE. HOWEVER, LD. CIT(A) DELETED THE ADDIT ION MADE BY AO BY OBSERVING THAT NO TANGIBLE MATERIALS HAVE BEEN BROU GHT ON RECORD BY THE AO SUGGESTING THE IMPUGNED LOAN AS UNDISCLOSED INCOME OF ASSESSEE. NOW, THE ISSUE BEFORE US ARISES SO AS TO WHETHER LO AN TAKEN BY ASSESSEE REPRESENTS THE UNDISCLOSED INCOME. IN THIS REGARD W E FIND THAT EVEN THE LOAN HAS BEEN TAKEN BY ASSESSEE THEN ALSO IT CANNOT BE T ERMED AS INCOME OF THE ASSESSEE. IT IS BECAUSE THERE IS NO PROVISION UNDER THE ACT TO TREAT THE LOAN AS INCOME OF THE ASSESSEE. ALTHOUGH THE ASSESSEE CLAIMED NOT TO HAVE TAKEN LOA N FROM ALL THE PARTIES EXCEPT A FEW AND SUCH LOAN TAKEN FROM THE PARTIES W ERE DULY RECORDED IN THE BOOKS OF ACCOUNT. 6.1 WE ALSO FIND THAT THE AO HAS NOT BROUGHT ANYTHI NG REGARDING THE APPLICATION OF LOAN. HAD ANY LOAN BEEN TAKEN BY ASS ESSEE THEN THERE WOULD IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 6 HAVE BEEN APPLICATION OF LOAN. BUT IN THE CASE ON H AND NO SUCH APPLICATION OF LOAN WAS FOUND DURING THE COURSE OF SEARCH. THUS, I N OUR CONSIDERED VIEW, WE FIND THAT LOAN HAS BEEN ADDED MERELY ON THE BASIS O F LOAN DOCUMENTS SHOWN IN THE IMPOUNDED DOCUMENTS MARKED VKK/1 PAGES 46 TO 49 AND STATEMENT FURNISHED U/S 132(4) OF THE ACT. HOWEVER, THE STATE MENT FURNISHED BY THE ASSESSEE UNDER SECTION 132(4) WAS SUBSEQUENTLY RETR ACTED. THUS IN THE GIVEN FACTS & CIRCUMSTANCES THE IMPUGNED STATEMENT CANNOT BE RELIED UPON. EVEN IF IT ASSUMED FOR THE TIME BEING THAT THE ASSESSEE HAS TAKEN LOAN FROM THE PARTIES STATED IN THE SEIZED DOCUMENTS THEN ALSO IN OUR CONSIDERED VIEW THE SAME CANNOT BE TERMED AS UNDISCLOSED INCOME OF THE ASSESSEE AS THERE IS NO PROVISION UNDER THE LAW TO TREAT THE LOAN AS INCOME OF THE ASSESSEE. EVEN THE PROVISIONS OF SECTION 68 CANNOT BE APPLIED IN THE INSTANT CASE BECAUSE THE IMPUGNED LOANS ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. IN THIS REGARD, WE FIND THAT THE CBDT IN ITS INSTRU CTION F.NO. 286/2/2003- IT(INV.II), DATED 10-3-2003 HAS ISSUED THE DIRECTIO N WHICH READS AS UNDER : INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION. SUCH CONFESSION, IF NOT BASED UPON CREDIBLE EVIDENCE, AR E LATER RETRACTED BY THE CONCERNED ASSESSEE WHILE FILING RETURNS OF INCO ME. IN THESE CIRCUMSTANCES, SUCH CONFESSIONS DURING THE COURSE O F SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEF UL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INF ORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMENT DU RING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO. ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS G ATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OF THEREAFTER WH ILE FRAMING THE RELEVANT ASSESSMENT ORDERS. IN THE CASE BEFORE US, THE ADDITION HAS BEEN MADE M ERELY ON THE BASIS OF DOCUMENTS AND WITHOUT BRINGING ANY TANGIBLE MATERIA LS. IN THE BACKGROUND OF THE ABOVE DISCUSSIONS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). IT(SS)A NO.78/KOL/2013 & 1868/KOL/2013 A.YS 09-10 & 10-11 DCIT C.C-VII KOL. VS. DR. V.K. KEJRIWAL PAGE 7 ACCORDINGLY WE UPHOLD THE SAME. HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ITA NO.1868/KOL/2013 FOR A.Y. 10-11 . 8. AS STATED EARLIER, THE ISSUE IN THIS YEAR IS SA ME AS THAT OF THE LAST YEAR. THE ONLY DIFFERENCE IS THE AMOUNT INVOLVED. SINCE T HE FACTS ARE EXACTLY IDENTICAL, BOTH PARTIES ARE AGREED WHATEVER VIEW TA KEN IN THE ABOVE APPEAL OF REVENUE MAY BE TAKEN IN THIS APPEAL OF REVENUE ALSO , WE HOLD ACCORDINGLY. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 10. IN COMBINE RESULT, BOTH THE APPEAL OF REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 30 /08/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP &!'(- 30 / 08 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-DR. VIJAY KR. KEJRIWAL, FLAT NO.4A & 4B,7 8, SAMBHUNATH PANDIT STREET, KOLKATA- 20 2. /REVENUE-DCIT, CEN.CIR-VII. AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, KOL-107 3.'0'1 2 / CONCERNED CIT KOLKATA 4. 2- / CIT (A) KOLKATA 5.56788!1 , 1 , / DR, ITAT, KOLKATA 6.7:;<= / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 1 ,