Bimla Kishore Sharma , Secunderabad V. Asst. Commissioner of Income Tax, Circle-16(2), Hyderabad

ITA 2007/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8756 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 08-07-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V APARNA
• Keywords: Unexplained cash credit; Unexplained expenditure; Corroborative evidences; Retraction; Reassessment proceedings; Set aside
• Section: 142(1); 133A; 143(1); 147; 148

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 2 007 /HYD/201 8 ASSESSMENT YEAR: 20 1 1 - 12 BIMALA KISHORE SHARMA, SECUNDERABAD. PAN AJVPS 7657K VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 16(2), HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : S MT. V. APARNA DATE OF HEARING : 0 8 / 0 7 /201 9 DATE OF PRONOUNCEMENT : 12 / 0 7 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 4 , DATED 2 0 / 06 /201 8 , HYDERABAD FOR AY 20 1 1 - 12 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , ENGAGED IN THE B USINESS OF LOGISTIC SERVICES AND FILED RETURN OF INCOME FOR THE AY 201 1 - 1 2 ON 2 5 /0 7 /201 1 ADMITTING TOTAL INCOME OF RS. 11,20,150 / - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). SUBSEQUENT TO SURVEY OPERATION U/S 133A OF THE ACT CONDUCTED ON 28/07/2010 IN THE BUSINESS PREMISES OF THE M/S MERIDIAN CARGO LINES PVT. LTD., IN WHICH, ASSESSEE IS MANAGING DIRECTOR AND SUBSEQUENT TO FINDINGS IN SURVEY PROCEEDINGS, ASSESSMENT WAS REOPENED U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 ON 20/10/2014. SUBSEQUENTLY, NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE, AGAINST WHICH, LD. AR OF THE ASSESSEE SUBMITTED THE RELEVANT INFORMATION AS CALLED FOR. 2 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . 2.1 DURING THE SURVEY OPERATION, IT IS NOTICED THAT EXCESS CAS H OF RS. 14,91,705/ - WAS FOUND AND ASSESSEE DURING SWORN STATEMENT ACCEPTED TO DECLARE THE SAME AS ADDITIONAL INCOME AND ACCORDINGLY, PAID THE REQUISITE TAX AMOUNTING TO RS. 4,63,500/ - ON 03/08/2010 ON ACCOUNT OF UNACCOUNTED CASH FOUND DURING THE SURVEY. I N ORDER TO VERIFY THE SAME, ASSESSMENT WAS REOPENED U/S 147 OF THE ACT. DURING THE REASSESSMENT PROCEEDINGS, ASSESSEE VIDE HIS LETTER DATED 26/11/2014, SUBMITTED AS BELOW: U NACCOUNTED CASH BALANCE: IN THE PROCESS OF RENDERING FURTHER ANSWERS IN RESPONSE TO QUESTION NO. 13 THE ASSESSEE STATED THAT HE WOULD OFFER THE AMOUNT OF RS.14, 91,705/ - AS UNEXPLAINED INCOME FOR THE ASST. YEAR 2011 - 12. HOWEVER, THE ASSESSE E VERIFIED THE RELEVANT ASPECTS WITH THE UPTO DATED REGULAR ACCOUNT BOOKS AND EXPLAINED THE RELEVANT FACTS AS UNDER: - A. MERIDIAN CARGO LINES PVT LTD: AS ALREADY MENTIONED SURVEY OPERATION U/S.133A OF THE IT ACT WAS CONDUCTED ON 28.07.2010. THE ASSESSE E TOOK OUT A PRINTOUT OF THE CASH BOOK AS R EQUIRED BY THE OFFICIALS OF THE DEPARTMENT MAINTAINED IN TALLY PACKAGE. THE CASH BALANCE THAT SHOULD HAVE BEEN AVAILABLE AS ON 28.7.2010 IN THE COMPANY IS RS.4, 93, 255/ - . IN SUPPORT OF THE SAME A PRINTOUT OF THE SAID CASH BOOK FOR THE PERIOD 1.4.2010 TO 28.07.2010 IS FURNISHED HEREWITH. B. PRASIT LOGISTICS SERVICES (PROP: ANITHA SHARMA) : A PRINTOUT OF THE CASH BOOK FOR THE PERIOD 1.4.2010 TO TILL THE DATE OF SURVEY IS FURNISHED HEREWITH. AS CAN BE SEEN FROM THE CASH BOOK EXTRACT THE CLOSING BALANCE THA T SHOULD BE AVAILABLE WITH THE ASSESSE E WAS RS. 13, 18,929.40. IT IS ALSO TO BE MENTIONED THAT AS CAN BE SEEN FROM THE CASH BOOK THE SOURCE OF EXPENDITURE IS WITHDRAWALS FROM THE ICICI BANK LTD (ACCOUNT NO. 004805003664). A COPY OF THE BANK STATEMENT FOR T HE PERIOD 1.4.2010 TO 28.07.2010 IS ALSO ENCLOSED. THUS, THE DEBITS APPEARING IN THE CASH BOOK ARE SUPPORTED BY CASH WITHDRAWALS FROM THE SAID BANK ACCOUNT. THE ASSESSE E INCURRED EXPENDITURE TOWARDS LORRY HIRE CHARGES AND THE SAME ARE SUPPORTED BY PROPER V OUCHERS. THESE FACTS CLEARLY INDICATE THAT THE CASH BALANCE OF RS. 13, 18,929/ - IS FROM EXPLAINED SOURCES SUPPORTED BY DOCUMENTARY EVIDENCES. C. BKS GLOBAL SOLUTIONS (PROP: MR. BIMAL KISHORE SHARMA): THIS IS A PROPRIETARY CONCERN OF THE ASSESSE E . A COPY OF THE CASH 3 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . BOOK FOR THE PERIOD 1.4.2010 TO 28.07.2010 IS FURNISHED HEREWITH. THE CASH BALANCE AVAILABLE AS PER BOOKS AS ON DATE OF THE SURVEY WAS RS.1,81,904/ - . IT IS ALSO TO BE MENTIONED THAT THE DEBITS IN THE CASH BOOK ARE SUPPORTED BY BANK WITHDRAWALS FROM ICICI BANK LTD (ACCOUNT NO. 004805011703). A COPY OF THE BANK EXTRACT IS ALSO FURNISHED HEREWITH. THUS, THE CASH BALANCE AVAILABLE OF RS.1,81,904/ - IN THE BOOKS OF BKS GLOBAL SOLUTIONS IS SUPPORTED BY PROPER DOCUMENTARY EVIDENCE. THUS, THE CASH BAL ANCE AVAILABLE WITH THE ASSESSE E AS ON 28.7.2010 IS AS UNDER : - A. MERIDIAN CARGO LINES PVT LTD RS .. 4,93,255 B. PLASTIC LOGISTIC SERVICES (PROP: ANITHA SHARMA) RS. 13,18,929 C. BKS GLOBAL SOLUTIONS (PROP: BIMAL KISHORE SHARMA) R S. 1,81,904 RS.19, 94,088 D. PERSONNEL SAVINGS RS. 5,912 RS.20, 00,000 ========== FROM THE ABOVE, IT IS CLEAR THAT THE AMOUNT OF RS. 19,94,088/ - IS SUPPORTED BY THE REGULAR ACCOUNT BOOKS OF THE ASSESSE E AND HIS WIFE MAINTAINED IN RESPECT OF VARIOUS CONCE RNS. 2.2 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, AO MADE THE FOLLOWING OBSERVATIONS FOR MAKING THE ADDITION OF RS. 15 LAKHS AS UNACCOUNTED CASH: T HE ASSESSEE VIDE HIS SWORN STATEMEN T DATED 28 - 07 - 2010 BEFORE ADIT(INV.), UNIT - L(3),HYDERABAD HAS ACCEPTED THAT THE CASH OF RS.14,91,705/ - FOUND DURING THE SURVEY OPERATION AND OFFERED TOTAL ADDITIONAL INCOME OF RS.57 LAKHS INCLUDING UNACCOUNTED CASH OF RS.14,91,705/ - IN THE HANDS OF ASSESSE E AND HIS WIFE AND ACCORDINGLY PAID THE REQUISITE TAX AMOUNTING TO RSA,63,500/ - VIDE CHALLAN SEQUENCE NO.39 DATED 03 - 08 - 2010 FOR A.Y 2011 - 12 ON SUCH UNEXPLAINED CASH. H ENCE RETRACTION DURING THE COURSE OF ASSESS MENT PROCEEDINGS IS AN AFTERTHOUGHT TO EXPLAI N THE DEFECTS IN COURSE OF SURVEY WHICH WERE NOT ENTERED IN THE REGULAR BOOKS. 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 4. AGGRIEVED BY THE ORDER OF CIT(A), AS SESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 4 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . 1. THE ORDER OF THE HON'BLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER ERRED IN INITIATION OF PROCEEDINGS U/S.147 OF THE IT ACT WITHOUT ANY MATERIAL ON RECORD AND THEREFORE THE SAME OUGHT TO HAVE BEEN QUASHED. 3. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVE D THAT THE ASSESSING OFFICER DID NOT CONSIDER THE EXPLANATION FURNISHED BY THE ASSESSEE WITH REGARD TO AVAILABILITY OF CASH BALANCE WITH SUPPORTING EVIDENCE IDENTIFYING THE SAME AS THAT OF M/S. MERIDIAN CARGO LINES PVT LTD, M/S. PLASTIC LOGISTICS SERVICES (PROPRIETOR SMT ANITHA SHARMA) AND BKS GLOBAL SOLUTIONS (MR. BIMAL KISHORE SHARMA) AND THEREFORE OUGHT TO HAVE DIRECTED FOR DELETION OF THE ADDITION. 4. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT THE CONCLUSION OF THE AS S ESS I NG OFFICER THAT THE ASSES SE E IN HIS SWORN STATEMENT DATED 28.7.2010 AGREED TO DECLARE THE AMOUNT OF RS.14.91 LAKHS AS UNEXPLAINED CASH AND THEREFORE RETRACTING FROM THE SAID STATEMENT WAS NOT ACCEPTABLE WAS GENERAL IN NATURE AND WAS WITHOUT ANY BASIS OR WITHOUT ANY SUPPORTING EVID ENCE AND HENCE OUGHT TO HAVE DELETED THE ADDITION. 5. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER WITHOUT BRINGING ANY MATERIAL ON RECORD TO ESTABLISH THAT THE CASH AVAILABLE OF RS.14.91 LAKHS REPRESENT UNACCOUNTED CASH ARRIVED A T AN IMPROPER CONCLUSION THAT THE SAME WAS WITHOUT PROPER EXPLANATION AND THEREFORE OUGHT TO HAVE DELETED THE ADDITION. 6. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF HEARING. 5. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE. 6. AS REGARDS GROUND NO. 2, LD. AR SUBMITTED THAT INITIATION OF REOPENING PROCEEDINGS U/S 147 OF THE ACT IS WITHOUT MATERIAL ON RECORD. HOWEVER, WE NOTICE THAT AO REOPENED THE ASSESSMENT, IN ORDER TO VERIFY THE MA TERIAL FOUND DURING THE SURVEY OPERATIONS. THEREFORE, THIS GROUND IS DISMISSED. 5 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . 7. AS REGARDS GROUND NOS. 3, 4 & 5 RELATING TO ADDITION OF RS. 15 LAKHS, AS UNACCOUNTED CASH CREDIT, LD. AR OF THE ASSESSEE SUBMITTED THAT, NO DOUBT, DURING THE SURVEY PROCEE DINGS, ASSESSEE WAS CONFRONTED WITH THE EXCESS CASH FOUND DURING THE SURVEY OPERATIONS TO THE EXTENT OF RS. 14,91,705/ - , BUT, THE SAME WAS ACCEPTED BY THE ASSESSEE TO BE DECLARED AS ADDITIONAL INCOME AND ACCORDINGLY, PAID TAX ALSO. HOWEVER, IT WAS BROUGHT TO THE NOTICE OF AO SUBSEQUENT TO THE SURVEY OPERATIONS THAT ASSESSEE WAS HABITUALLY KEEPING CASH OF THREE CONCERNS, NAMELY, A) MERIDIAN CARGO LINES PVT. LTD., B) PLASTIC LOGISTIC SERVICES AND C) BKS GLOBAL SOLUTIONS, IN WHICH ASSESSEE IS THE PROPRIETOR. HE SUBMITTED THAT THE CASH KEPT IN THE RESIDENCE OF THE ASSESSEE TO THE EXTENT OF RS. 20 LAKHS WERE EXPLAINED WITH SUPPORTED BOOKS OF ACCOUNT AND RELEVANT WITHDRAWALS FROM BANK. HE SUBMITTED THAT SINCE DURING THE SURVEY PROCEEDINGS, ASSESSEE HAS ACCEPTED TO DECLARE THE ADDITIONAL CASH FOUND DURING THE SURVEY AS HIS INCOME, AO MADE THE ADDITION. HE, THEREFORE, SUBMITTED THAT THE ADDITION MADE BY THE AO IS ONLY BASED ON THE SWORN STATEMENT RECORDED DURING THE SURVEY, APART FROM THAT, THERE IS NO MATERIAL ON RECORD TO MAKE THIS ADDITION. HE PRAYED THAT THIS ADDITION MAY BE DELETED. 8. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES AS WELL AS PLACED RELIANCE ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF KERMEX MICRO SYSTEMS (INDIA) LTD. VS. DCIT, [2014] 47 TAXMANN.COM 375. 9. CONSIDERED THE RIV AL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT DURING THE SURVEY OPERATION IN THE BUSINESS PREMISES OF THE M/S MERIDIAN CARGO LINES PVT. LTD. IMPOUNDED INCRIMINATING MATERIAL VIDE ANNEXURE NO. A/MCLPL/01. AS PER THE IMPOUNDED MATERIAL, THE DEPARTMENT NOTICED EXCESS CASH OF RS. 14,91,705/ - . IN THE SWORN STATEMENT, ASSESSEE AGREED TO DECLARE RS. 15 LAKHS AS ADDITIONAL INCOME IN HIS HANDS. IN ORDER TO VERIFY THE 6 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . ACTUAL INCOME OF THE ASSESSEE FOR AY 2011 - 12, THE AO REOPENED THE ASSESSMENT . I N THE REOPENING PROCEEDINGS, WITH REGARD TO EXCESS CASH FOUND DURING THE SURVEY OPERATIONS , ASSESSEE VIDE LETTER DATED 26/11/2014, EXPLAINED THE BREAK UP OF CASH BALANCE AVAILABLE AS ON 28/07/2010, AS UNDER: A. MERIDIAN CARGO LINES PVT LTD RS .. 4,93,2 55 B. PLASTIC LOGISTIC SERVICES (PROP: ANITHA SHARMA) RS. 13,18,929 C. BKS GLOBAL SOLUTIONS (PROP: BIMAL KISHORE SHARMA) RS. 1,81,904 RS.19, 94,088 D. PERSONNEL SAVINGS RS. 5,912 RS.20, 00,000 ========== FROM THE ABOVE, IT IS CLEAR THAT WHATEVER CASH BALANCE FOUND DURING THE SURVEY OPERATION IN THE PREMISES OF THE ASSESSEE WERE EXPLAINED BY THE ASSESSEE BY WAY OF BOOKS ACCOUNT MAINTAINED BY THE ASSESSEE, HOWEVER, IT WAS NOT EXPLAINED DURING THE SURVEY OPERATIONS. IT IS CLEAR FROM THE ABOVE THAT AO HAS MADE THE ADDITION OF RS. 15 LAKHS AS UNACCOUNTED CASH FOUND DURING THE SURVEY OPERATION HEAVILY RELYING ON THE SWORN STATEMENT AND OTHER THAN THAT THERE IS NO MATERIAL BROUGHT ON RECORD IN SUPPORT OF SUCH ADDITION. DURING HEARING, LD. DR RELIED ON THE CASE OF KERMEX MICRO SYSTEMS (INDIA) LTD. (SUPRA) TO SUBMIT THAT IN THE SAID CASE, AO PASSED ASSESSMENT ORDE R ON THE BASIS OF VOLUNTARY STATEMENT MADE BY THE MD DISCLOSING AN INCOME OF UNEXPLAINED EXPENDITURE AND PAID THE TAXES ALSO. ACCORDINGLY, THE HONBLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE ADDITION. HOWEVER, WE NOTICE THAT IN THE ABOVE DECISION, ASSE SSEE HAS NOT RETRACTED FROM THE VOLUNTARY ADMISSION MADE DURING THE SURVEY OPERATION CONDUCTED U/S 133A OF THE ACT. WHEREAS, IN THE CASE UNDER CONSIDERATION BEFORE US , THE ASSESSEE RETRACTED THE SWORN STATEMENT MADE DURING THE SURVEY OPERATION. THEREFORE, THE SAID C ASE IS NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND 7 ITA NO. 2007 /HYD/1 8 BIMALA KISHORE SHARMA, SECBAD . DELETE THE ADDITION MADE BY THE AO ON THIS COUNT AND ACCORDINGLY, ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 12 TH JULY , 201 9 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 12 TH JULY , 201 9 KV C OPY TO: - 1) BIMALA KISHORE SHARMA, C/O B. NARSING RAO & CO., CAS, PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYDERABAD 500 0 96 . 2) AC IT, CIRCLE 16 ( 2 ) , HYDERABAD 3) CIT(A) 4 HYDERABAD. 4) PR. CIT - 4 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE