HARI NARAIN PARWAL, Jaipur V. ACIT, Jaipur

ITA 188/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5325 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DHK
• Assessee Lawyers: G G MUNDRA
• Keywords: Income from undisclosed sources; Search and seizure; Salary income; Assessment record
• Section: 143(3); 234B

Judgement Text

RAVK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 188/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 HARI NARAIN PARWAL, 376, NAHAR GARH ROAD, CHANDPOLE BAZAR, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ADYPP 8358 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI G.G. MUNDRA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/02/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 31/03/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27/12/2012 OF THE LEARNED C.I.T.(A) (CENTRAL), JAIPU R FOR A.Y. 2008-09. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW I N UPHOLDING ADDITION OF RS. 2,00,000/- MADE TO THE IN COME OF THE APPELLANT BY THE ASSESSING OFFICER ON ACCOUN T OF 2 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT PART OF CASH FOUND AT THE TIME OF SEARCH AND WHICH AMOUNT WAS NOT INCLUDED IN INCOME DECLARED BY THE APPELLANT. 2. THAT THE LD CIT(A) IS WRONG AND HAS ERRED IN LAW IN UPHOLDING LEVY INTEREST U/S 234C OF THE I.T. ACT, 19 61 ON INCOME SURRENDERED DURING THE COURSE OF SEARCH EVEN THOUGH NO INTEREST IS CHARGEABLE ON THIS INCOME. 2. BOTH THE GROUNDS OF THE ASSESSEES APPEAL ARE AG AINST UPHOLDING THE ADDITION OF RS. 2.00 LACS AND CHARGING INTEREST ON SURRENDERED INCOME U/S 234C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS HAVING INCOME FROM SALARY, HOUSE PROPERTY, BUSINESS AND OTHER SOURCES. A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 14/3/2008 AT TH E BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE. DURING THE CO URSE OF SEARCH AND SEIZURE OPERATION AT 376, NAHARGARH ROAD, CHANDPOLE BAZAR, JAIPUR, CASH AND BOOKS OF ACCOUNTS WAS FOUND AND SEIZED. THE CASE SCRUTINIZED U/S 143(3) OF THE ACT AND NOTICES U/S 143(2)/142(1) WERE ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE FILED RETURN OF INCOME O N 12/2/2009 DECLARING INCOME OF RS. 60,04,090/-. DURING THE COURSE OF SEA RCH OPERATION ON 14/3/2008 CASH OF RS. 6,86,500/- WAS FOUND FROM POSS ESSION OF THE ASSESSEE AND FURTHER RS. 99,520/- WAS FOUND FROM POS SESSION OF HIS MOTHER SMT. LALITA DEVI. AN AMOUNT OF RS. 6,50,000/- WAS SE IZED FROM IT. THE 3 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT ASSESSEE HAS GIVEN STATEMENT U/S 132(4) STATING THA T OUT OF MOTHERS CASH TOTALING RS. 99,520/- AN AMOUNT OF RS. 75,000/- BEL ONGS TO HIM AND ARE NOT ENTERED IN REGULAR BOOKS OF ACCOUNT, WHICH WAS OUT OF UNDISCLOSED SOURCE AND HAD SURRENDERED TOTAL AMOUNT OF RS. 6,50,000/- ON ACCOUNT OF UNDISCLOSED CASH. HOWEVER, IN THE RETURN OF INCOME, HE DISCLOSED SURRENDERED AMOUNT RS. 5,30,000/- AS ADDITIONAL INC OME FOR THE CURRENT YEAR. THE ASSESSING OFFICER GAVE REASONABLE OPPORTUN ITY OF BEING HEARD ON THIS ISSUE, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT AFTER THE SEARCH THE ASSESSEE COMPLETED THE ENTRIES OF THE CASH BOOK AND AS PER THE SAID BOOK CASH IN HAND AS ON DATE OF SEARCH I.E. 14/03/2008 (COPY OF CASH BOOK ENTRIES IS ENCLOSED) WAS RS. 2.0 5 LACS. THE DIFFERENCE IN BETWEEN THE TWO FIGURES (7.25-2.05) WORKS OUT TO RS. 5 .20 LACS AND THE SAID AMOUNT WAS THE CORRECT UNDISCLOSED INCOME ON ACCOUNT OF EXCESS CASH. BUT DUE TO CLERICAL MISTAKE THE SAID FIGURE OF RS. 5.20 LACS HAS WRONGLY BEEN TAKEN IN THE RETURN OF INCOME AT RS. 5.30 LACS AND THE ASSESSEE PAID THE DUE TAX. AFTER CONSIDERING THE ASSESSEES SUBMISSION, THE L D ASSESSING OFFICER HELD THAT THE CASH OF RS. 2,00,000/- HAS BE EN RECEIVED FROM HIS MOTHER SMT. LALITA DEVI IN FOUR INSTALLMENTS OF RS. 50,000/- EACH ON 10/09/2007, 15/07/2007, 18/09/2007 AND 20/09/2007. THE ASSESSEE HAS 4 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT NOT FILED ANY EVIDENCE AND ALSO NOT EXPLAINED THE S OURCE OF CASH RECEIVED FROM HIS MOTHER ON THESE DATES. THEREFORE, HE MADE A DDITION OF RS. 20 LACS IN THE ASSESSEES INCOME AS INCOME FROM UNDISCLOSED SOURCES AND CHARGED INTEREST U/S 234A, 234B AND 234C ON RETURNED INCOME OF RS. 60,04,090/-. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DIS MISSED THE ASSESSEES APPEAL BY OBSERVING THAT DURING THE APPELLATE PROCE EDINGS, IT HAS BEEN SUBMITTED THAT SMT. LALITA DEVI RECEIVED SUCH CASH FROM THE HUSBAND SHRI VALLABH DAS PARWAL, WHO WAS PROPRIETOR OF M/S MAHESHWAR I STORES. IT MAY BE NOTED THAT SUCH SUBMISSION OF RECEIPT OF CASH FR OM SMT. LALITA DEVI WAS NEVER MADE DURING THE COURSE OF SEARCH. IN FACT CAS H AMOUNTING TO RS. 99,520/- WAS FOUND FROM THE POSSESSION OF SMT. LALIT A DEVI AND OUT OF SUCH CASH SHE ADMITTED THAT CASH AMOUNTING TO RS. 75,000 /- PERTAIN TO THE ASSESSEE. FURTHER NO SUCH CASH BOOKS WAS FOUND AND S EIZED DURING THE COURSE OF SEARCH. MOREOVER THE ALLEGED CASH OF RS. 2,00,000/- IS STATED TO HAVE BEEN RECEIVED DURING THE MONTH OF SEPTEMBER, 2 007, WHEREAS THE SEARCH WAS CONDUCTED ON 14/3/2008 AND THERE IS A GAP OF ALMOST ONE YEAR AND IT CANNOT BE SAID IN CERTAINTY THAT THE SAID CA SH WILL REMAIN WITH THE APPELLANT. IN THIS BACKGROUND, THE PREPARATION OF S UCH CASH BOOK 5 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT SUBSEQUENTLY TO SEARCH THAT TOO WHEN NO SUCH CASH BO OK WAS FOUND DURING THE COURSE OF SEARCH AND NO SUCH FACTS WERE STATED D URING THE COURSE OF SEARCH CANNOT BE RELIED UPON. FURTHER IT WAS ALSO NO TED THAT THOUGH THE APPELLANT HAS TRIED TO EXPLAIN THE AVAILABILITY OF CASH WITH SMT. LALITA DEVI FROM THE AMOUNT RECEIVED FROM HER HUSBAND BUT EVEN SUCH FACTS WERE NOT RAISED BEFORE THE ASSESSING OFFICER. THUS, HE CONFIR MED THE ADDITION. ON CHARGING OF INTEREST, THE LD CIT(A) HAS HELD THAT IT IS CONSEQUENTIAL IN NATURE, THEREFORE, HE DIRECTED TO THE ASSESSING OFF ICER TO RECOMPUTED THE INTEREST U/S 234C OF THE ACT AFTER GIVING AN EFFECT TO THE APPELLATE ORDER. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE FATHER OF THE ASSESSEE SHRI BALLAV DAS PARWAL WAS RUNNING A SHOP OF WHOLESALE OF GHEE, OIL ETC. IN THE NAME OF M/S MAHESHWARI STORE, CHANDPOLE BAZAR, JAIPUR (INCOME TA X ASSESSEE AND ACCOUNTS ARE AUDITED U/S 44AB), WHO EXPIRED ON 19/08 /2007. THE CASH BALANCE OF SAID BUSINESS SHOP AS ON THE DATE OF DEA TH WAS RS. 6,96,310.20/-. AFTER THE DEATH OF SHRI BALLAV DAS P ARWAL THE BUSINESS OF PROPRIETORSHIP WAS RUN UP TO 15/09/2007 AND THEREAFT ER CLOSED. THE CASH BOOK CONTINUED UP TO 31/3/2008 TO RECORD THE AMOUNT RECEIVED FROM DEBTORS AND PAYMENTS MADE TO CREDITORS. HE HAS DRAWN OUR ATTENTION ON 6 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT PAGE NO. 13 TO 16 OF THE PAPER BOOK, WHICH REVEALED THAT SMT. LALITA DEVI RECEIVED RS. 2,80,222/- (RS. 2,50,000/- ON 31/8/200 7 AND RS. 30,222.02 ON 31/3/2008) IN CASH FROM THE FIRM AND RS. 10,690.18 PERSONAL CASH FROM HUSBAND AND BALANCE OF CAPITAL OF SHRI BALLAV DAS P ARWAL AMOUNTING TO RS. 5,70,703.87. THESE ENTRIES OF RECEIPTS ARE RECORDED IN THE BOOKS OF ACCOUNT OF SMT. LALITA DEVI AND WAS SHOWN IN HER BALANCE SHE ET FILED WITH RETURN OF INCOME. THE LD AR HAS DRAWN OUR ATTENTION ON PAGE NO. 9 TO 12 OF THE PAPER BOOK. THE ASSESSMENT OF SMT. LALITA DEVI WAS AL SO COMPLETED U/S 143(3) OF THE ACT WHEREIN DETAILS OF RECEIVING CASH AND CAPITAL FROM HUSBAND WAS ENQUIRED BY THE ASSESSING OFFICER AND ON FURNISHING THE SAME EXPLANATION, IT WAS ACCEPTED IN ASSESSMENT. THUS THE CASH OF RS. 2,00,000/- WAS AVAILABLE WITH MOTHER OF ASSESSEE WHO G AVE TO HIS SON HARI NARAIN PARWAL ON ABOVE DATES WHICH IS WITHOUT ANY TI ME GAP AND ASSESSEE RECORDED THE SAME IN HIS CASH BOOK. THE COPY OF CASH BOOK OF ASSESSEE IS ALSO ENCLOSED IN SUPPORT OF CONTENTION OF CASH BALA NCE OF RS. 2.05 LACS AS ON DATE OF SEARCH. IN THE STATEMENT IN COURSE OF SE ARCH SMT. LALITA DEVI CLEARLY STATED THAT HER CASH TRANSACTIONS ARE LOOKE D INTO BY HIS SON HARI NARAIN PARWAL WHO WILL EXPLAIN THEM (P. B. PAGE 17 - 18). THUS CASH RECEIVED BY ASSESSEE FROM HIS MOTHER SMT. LALITA DE VI IS PROVED WITH 7 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT EVIDENCE AND, THEREFORE CONTENTION OF ASSESSEE BEIN G CORRECT THE SAME DESERVES TO BE ACCEPTED. IT IS SUBMITTED THAT LD. A .O. REJECTED THE EXPLANATION FURNISHED BY ASSESSEE TAKING THE DATE O F SEARCH AS 14-3-07 INSTEAD OF CORRECT DATE 14-3-2008 AND HELD THAT ASS ESSEE HAS NOT PROVED AVAILABILITY OF CASH ON 14-3-2007 I.E. DATE OF SEAR CH. THE A.O. FURTHER WITHOUT VERIFYING THE CONTENTION OF ASSESSEE IN RESP ECT TO AVAILABILITY AND RECEIPT OF CASH FROM LALITA DEVI WITH THE ASSESSMENT RECORD OF SMT. LALITA DEVI ALSO AVAILABLE WITH THE A.O. AS HE WAS THE ASSES SING OFFICER OF SMT. LALITA DEVI ALSO. THE LD. A.O. WITHOUT ASKING ANY FUR THER EXPLANATION FROM ASSESSEE HAS MADE THE ADDITION WHICH IS WRONG. THE L D. CIT (A) ALSO REJECTED THE SUBMISSIONS OF ASSESSEE WHICH WERE NOT F OUND INCORRECT AT ALL BY HIM BUT HE PLACED MUCH RELIANCE ON STATEMENT OF ASSESSEE IN COURSE OF SEARCH. THE LD. CIT (A) ALSO HELD THAT NO CASH BOOKS WERE FOUND OR SEIZED DURING THE COURSE OF SEARCH BUT THAT IS OF NO CONSE QUENCE IN AS MUCH AS THAT THESE VERY CASH BOOKS WERE PRODUCED IN THE ASSE SSMENT PROCEEDINGS OF ASSESSEE AS WELL AS IN CASE OF SMT. LALITA DEVI B EFORE A.O. WHO ACCEPTED THEM. THE FINDING OF CIT (A) THAT RS. 2,00,000/- STAT ED TO HAVE BEEN RECEIVED DURING SEPT. 2007 AND SEARCH WAS CONDUCTED ON 14-3-2008 AND THERE IS A GAP OF ALMOST ONE YEAR (THOUGH IT IS LES S THAN 6 MONTHS AND SO 8 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT FINDING IS INCORRECT) AND IT CANNOT BE SAID IN CERT AINTY THAT THE CASH WILL REMAIN WITH THE ASSESSEE IS ALSO WRONG AS ASSESSEE MA INTAINS CASH BOOK WHEREIN ALL INCOMINGS OF CASH AND OUTGOING WAS MAINTA INED WHICH HAS BEEN ACCEPTED IN ASSESSMENT AND OTHERWISE THERE IS NOTHIN G ON RECORD FOR UTILIZATION OF CASH RECEIVED OTHER THAN WHAT IS STAT ED BY ASSESSEE. THUS FINDINGS OF CIT (A) ARE ARBITRARY AND CONTRARY TO RE CORD WHICH ARE NOT SUSTAINABLE AND ADDITION DESERVES TO BE DELETED. IT IS, THEREFORE, PRAYED THAT THE ADDITION OF RS. 2,00,000/- TO THE INCOME O F ASSESSEE AS INCOME FROM UNDISCLOSED SOURCE DESERVES TO BE DELETED. 5. AT THE OUTSET THE LD SR. DR HAS VEHEMENTLY SUPPO RTED THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSING OFFICER OF SMT. LALITA DEVI HAS SCRUTINIZED THE CASH AVAILABILITY U/S 143( 3) OF THE ACT AND SAME CASH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. FU RTHER IT IS ALSO UNDISPUTED FACT THAT THE HUSBAND OF SMT. LALITA DEV I LATE VALLAV DAS PARWAL WAS RUNNING A SHOP OF WHOLESALE OF GHEE AND OIL ETC. IN THE NAME OF MAHESHWARI STORE, CHANDPOLE BAZAR, JAIPUR, WHO HAD EX PIRED ON 19/08/2007. THERE WAS A CASH BALANCE AS PER CASH BOO K. FINALLY, THE 9 ITA NO. 188/JP/2013 HARI NARAIN PARWAL VS. ACIT PROPRIETORY CONCERN HAS CLOSED ON 15/9/2007, THEREF ORE, THERE IS REASONABLE EXPLANATION WITH THE ASSESSEE THAT HE HAS RECEIVED T WO LACS FROM HIS MOTHER ON DIFFERENT DATES. THEREFORE, THE ADDITION C ONFIRMED BY THE LD CIT(A) IS DELETED. THE FINDING ON LEVY OF INTEREST U/ S 234(C) OF THE ACT IS CONSEQUENTIAL TO THE ABOVE FINDING. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31 ST MARCH, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI HARI NARAIN PARWAL, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-1, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.188/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR