The ACIT, 4(1), Indore V. Smt. Kala Bai Soni, Barwani

ITA 21/IND/2012

• Counselvise Citation: 2122714 RSA 2012
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 09-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Assessee Lawyers: S S SOLANKI
• Keywords: Block assessment; Onus to prove; Documents seized
• Section: 133A; 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NOS.17 TO 21/IND/2012 A.Y. 2000-01 ACIT-4(1), INDORE ... APPELLANT VS. 1. SANTOSH SONI, GRAM-PATI, DIST. BARWANI PAN ATBPS 7479 K 2. SMT. NIKITA SONI, GRAM-PATI, DIST. BARWANI PAN AGOPS 6153 L 3. UMESH KUMAR SONI, GRAM-PATI, DIST. BARWANI PAN AKSPS 3272 Q 4. SMT. KIRTIBAI SONI, GRAM-PATI, DIST. BARWANI PAN AKBPS 3274 J 5. SMT. KALABAI SONI, GRAM-PATI, DIST. BARWANI PAN AKSPS 3275 K ... RESPONDENTS APPELLANT BY SHRI DARSHAN SINGH, CIT/DR RESPONDENT BY SHRI S.S. SOLANKI, CA DATE OF HEARING 24.05.2012 DATE OF PRONOUNCEMENT 24.05.2012 2 O R D E R PER JOGINDER SINGH THE BUNCH OF FIVE APPEALS FILED BY THE REVENUE IS AGAINST THE COMMON IMPUGNED ORDER DATED 13.10.2011, PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY, INDORE ON THE GR OUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN THE GIRVI BUSINESS WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE AVAILABILI TY OF FUNDS AS ADVANCES PRECEDED REPAYMENTS WHICH ARE UNEXPLAINED ADVANCES AND FURTHER ERRED IN CONCLUDING THAT IN VIEW OF OPE NING CAPITAL OF MONEYLENDING BUSINESS OF RS.1,22,85,080/-, THERE WA S NO REQUIREMENT OF ADDITION ON ACCOUNT OF TOTAL ADVANCE OF RS.77,47,220/-, BEING MUCH LESS THAN THE OPENING CA PITAL, THAT TOO, WITHOUT GETTING THE SAME VERIFIED. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I DARSHAN SINGH, LD. CIT/DR AND SHRI S.S. SOLANKI, LD. COUNSE L FOR THE 3 ASSESSEE. THE CRUX OF ARGUMENT ON BEHALF OF THE REV ENUE IS IDENTICAL TO THE ABOVE CONSOLIDATED GROUND WHEREAS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDE R. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON THE RECORD. SINCE COMMON ISSU ES ARE INVOLVED IN ALL THE APPEALS, THESE CAN BE DISPOSED BY A COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FACTS, IN BRIEF, ARE THAT SURVEY U/S 133A OF THE ACT, 1961 (THE ACT, HEREINAFTER) WAS CARRIED OUT AT THE BUSINESS PREMISED OF THE ASS ESSEES ON 13.9.2006 WHICH WAS LATER ON CONVERTED INTO SEARCH U/S 132(1) OF THE ACT. THE ASSESSEES, AT THE RELEVANT TIME, WERE ENGAGED IN GIRVI BUSINESS (PAWNING BUSINESS). DURING SEARCH, G IRVI REGISTERS WERE FOUND IN WHICH TRANSACTIONS RELATING TO PAWNIN G BUSINESS WERE RECORDED. THE RELEVANT EXTRACTS FROM THE ASSES SMENT ORDER WHICH LED TO THE ADDITION ARE REPRODUCED HEREUNDER: - ON VERIFICATION OF SEIZED BOOKS OF ACCOUNTS/DOCUME NTS, A LARGE NUMBER OF ENTRIES RELATED TO THE INTEREST INCOME FR OM PAWNING BUSINESS AND THE INVESTMENT THEREOF PERTAINING TO F INANCIAL YEAR 1999-2000 RELEVANT TO ASSESSMENT YEAR 2000-2001 WER E FOUND. THE TRANSACTION MADE IN THESE GIRVI REGISTERS ARE I N CODED FORM. THE CODE ADOPTED IS THAT THE TRANSACTION RELATING T O BUSINESS ARE 4 RECORDED AT 1/10 TH OF IS ITS ACTUAL TERMS, BOTH VALUE WISE AND WEIGHT WISE. THIS FACT HAS BEING SUBSTANTIATED WITH A NUMBER OF DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. THE A SSESSEE TOO ADMITTED DURING THE COURSE OF THE SEARCH THAT A S PER THE NEEDS OF THE BUSINESS AND THE LOCAL LANGUAGE, BOTH THE LOAN AMOUNTS AND WEIGHT OF THE ARTICLES ARE RECORDED AT 1/10 TH OF ITS REAL TERMS IN VALUE IN THE GIRVI REGISTERS AS WELL AS GIRVI SLIPS. THEREFORE, FOR ASCERTAINING ACTUAL INCOME EARNED FR OM PAWNING BUSINESS AND ALSO THE ACTUAL AMOUNT OF ADVANCES MAD E IN THE ENTRIES FOUND AND RECORDED IN THE ENTRIES FOUND AND RECORDED IN THE GIRVI REGISTERS. IT HAS TO BE MULTIPLIED BY THE FIGURE OF 10(TEN), THE INTEREST INCOME AND THE INVESTMENT BY THE ASSESSEE IN THIS B USINESS IS DETERMINED. SHRI SANTOSH SONI IS NOT MAINTAINING PA PER BOOKS OF ACCOUNT AND SHOWING MEAGER INTEREST INCOME FROM PAW NING BUSINESS ON ESTIMATE BASIS IN THIS INDIVIDUAL CAPAC ITY. IT IS THEREFORE, THE INTEREST INCOME FROM BUSINESS OF PAWNING AS WELL AS UNDISCLOSED INVESTMENT IN THIS B USINESS CALCULATED IN LACS AND JUSTIFIED ESCAPED INVESTMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961 IN THE CASE OF SHRI SANTOSH SONI. THEREFORE, NECESSARY APPROVAL FOR ISS UE OF NOTICE U/S 148 FOR ASSESSMENT YEAR 2000-2001, OBTAINED. TH E TOTAL INCOME OF THE ASSESSEE IS DETERMINED AS UNDER. TOTAL INTEREST INCOME AS PER SEIZED GIRVI REGISTER CALCULATED AN AMOUNT OF RS.1,76,789/- MULTIPLIED BY 10 COMES TO RS.17,67,890/- THIS INTEREST INCOME EQUALLY DIVIDED INTO 5 PERSONS AMONG THE FAMILY MEMBER. THE SHARE OF SHRI SANTOSH KUMAR SONI 1/5 TH OF RS.17,67,890/- COMES TO RS.3,53,578/-, AND ADVANCE MADE BY THE ASSESSEE AS PER GIRVI REGISTER FOR THIS FY COMES TO RS.7,74,722/-, AFTER MULTIPLIED BY 10 THE AMOUNT WILL BE RS.77,47,220/- THE SHARE OF THE ASSESSEE 1/5 TH OF RS.77,47,220/- COMES TO RS.15,49,444/-. THE ADDITIONS MADE IN RESPECT OF EACH ASSESSEE ARE SUMMARIZED AS UNDER: - NAME OF THE ASSESSEE INCOME RETURNED (RS.) INCOME ASSESSED (RS.) TAX DEMANDED (RS.) SHRI SANTOSH KUMAR SONI 76395 1818022 1157560 SMT. KIRTIBAI SONI 55500 1558245 1012650 SMT. NIKITA SONI 52500 1543947 986130 SMT. KALABAI SONI 55000 1870251 1178150 SHRI UMESH KUMAR SONI 89430 1517756 961210 5 3.1 AGAINST THE AFORESAID ADDITIONS, THE ASSESSEES PREFERRED APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY AND MADE FOLLOWING SUBMISSIONS: - A. THAT WHEN THE ASSESSEES FAMILY CONSISTS OF 7 M EMBERS AND ALL ARE DOING BUSINESS JOINTLY, WHY INTEREST IN COME WAS DIVIDED AMONGST 5 MEMBERS. WE ARE ENCLOSING COPIES OF RETURNS OF ALL 7 MEMBERS OF ASSESSMENT YEAR 2000-01 AND LAST 3-4 YEAR FOR PROVIDING OUR CASE. B. IT IS A SETTLED LAW THAT ONLY INCOME OF THAT PARTICULA R YEAR CAN BE TAXED AND CREDIT FOR OPENING CAPITAL WILL HA VE TO BE ALLOWED. FOR THESE PREPOSITION RELIANCE IS PLACED O N FOLLOWING DECISIONS :- I. HON 'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. SATYENDRA KUMAR DOSHI REPORTED IN 315 ITR 172 HELD THAT ADDITION AS A RESULT OF ESTIMATION OF OPENING CAPITAL INVOLVED PR IOR TO THE BLOCK PERIOD AND IN THE BLOCK ASSESSMENT WHILE COMP UTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD, CAPITAL PA SSESSED BY THE ASSESSEE PRIOR TO THE BLOCK PERIOD AS REVEALED FROM THE LEDGER AND THE MATERIAL SEIZED DURING THE SEARCH CO ULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE FIRES ASSESSMENT YEAR IN THE BLOCK PERIOD. II. HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V PRAMESHWAR BOHRA REPORTED IN 301 ITR 404 HELD THAT CLEAR FINDING RECORDED BY THE TRIBUNAL THAT THE IMPUGNED AMOUNT WAS CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSE E IN THE EARLIER PREVIOUS YEAR AND WAS SHOWN AS CLOSING CAPI TAL, OF THAT YEAR, CARRIED FORWARD AMOUNT OF THE PREVIOUS YEAR D OES NOT BECOME AN INVESTMENT OR CASH CREDIT OF THE RELEVANT YEAR. THEREFORE, THE ORDER OF THE TRIBUNAL DELETING THE A DDITION IS SUSTAINED. C. ACCORDING TO THE APPRAISAL REPORT THE ASSESSEE HAS ADVANCED A SUM OF RS 12285580/ DURING ASSESSMENT TEAR 1999-00 BEING HIS FAMILY'S OPENING CAPITAL OF 6 MONEY LENDING BUSINESS. CREDIT FOR THIS OPENING CAP ITAL NEEDS TO BO ALLOWED, IF CREDIT FOR THESE CAPITAL IS ALLOWED, THERE WILL NOT BE ANY REQUIREMENT OF ADDIT ION AS THE ASSESSEE HAS ADVANCED RS 7747220/ ONLY DURIN G THE YEAR, MUCH LESS THAN OPENING CAPITAL AVAILABLE WITH THE ASSESSEE. D. FURTHER IN ALL SUBSEQUENT YEARS, THE AD HAS ALLO WED CREDIT OF REPAYMENT RECEIVED DURING THE YEAR FROM ADVANCES MADE AND IF THERE IS ANY SHORTAGE, THAT HA S BEEN CONSIDERED FOR THE PURPOSE OF CALCULATION OF ADDITION. THAT IN THIS YEAR THE ASSESSEE HAS RECEIV ED REPAYMENT OF RS 10049910/ WHICH IS MORE THAN ADVANCE MADE OF RS 7747220J- DURING THE YEAR. ON THIS COURT ALSO NO ADDITION CAN BE MADE FOR SHORTAGE OF FUNDS. THE ADDITION OF RS 7747220/ MADE BEING ILLEGAL AND WRON G, THE SAME REQUIRE TO BE DELETED. ' 3.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) SOUGHT REMAND REPORT FROM THE LD. ASSESSING OFFICER, WHO V IDE LETTER DATED 29.9.2008 SUBMITTED THE REMAND REPORT, WHICH IS SUMMARIZED AS UNDER: F.NO.ACIT/4(1)/IND/REMAND REPORT/3/2008-09 DATED: 29.9.2008 TO, THE COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE THROUGH ADDL. CIT, RANGE-4, INDORE SIR, SUB: APPELLATE PROCEEDINGS IN THE CASE OF SHRI SANTOSH KUMAR SONI, GRAM-PATI, DISTT. BARWANI, INDORE FOR A.Y. 2000-01- REG. KINDLY REFER TO THE ABOVE AND YOUR LETTER F.NO.CIT (A)-II/IND/IT- /08-09 DATED 16.9.2008 ON THE ABOVE SUBJECT. 7 THE ASSESSEE HAS RAISED SIMILAR GROUNDS IN RESPECT OF ALL THE 5 MEMBERS OF THE FAMILY WHICH ARE COMMON, THEREFORE POINT WISE REPLY IS BEING SUBMITTED AS UNDER: GROUND NO.1 ASSESSEES SUBMISSION ASSESSING OFFICERS REPORT 1.6 A COPY OF REASONS RECORDED BY THE ASSESSING OFF ICER U/S 148 WAS GIVEN TO THE ASSESSEE, WHERE THE ASSESSING OFFICER HAD MENTIONED THE SPECIFIC NO. OF GIRVI REG ISTER SEIZED BY THE DEPARTMENT AND TOTAL AMOUNT OF INCOME TREATED AS UNDISCLOSED. THE COPY OF THE SAID REGIST ERS WERE OBTAINED BY THE ASSESSEE DURING POST SEARCH PROCEEDINGS. HOWEVER, INNER DETAILS OF CALCULATIONS ARE ENCLOSED. THE TOTALS OF REPAYMENTS RECEIVED BY THE ASSESSEE, INTEREST INCOME EARNED AND ADVANCES MADE AS RECORDE D IN THE CONCERNED GIRVI REGISTERS (FOR THE F.Y. 1999 -2000) ARE AS UNDER: - GIRVI REGISTER L.D. NO. PAGE NO. OF GIRVI REGISTER REPAYMENT RECEIVED INTEREST RECEIVED BS-4 1 TO 38 410 410 BS-11 1 TO 91 2844 694 BS-12 1 TO 54 306656.70 65184.70 BS-13 1 TO 65 695080.25 110500.25 TOTAL 1004990.95 176788.95 GIRVI REGISTER I.D. NO. PAGE NO. OF GIRVI REGISTER ADVANCES MADE BS-11, 12 & 13 - 774722 GROUND NO.2 2.6 INNER DETAILS OF CALCULATION ARE ENCLOSED. 2.7(I) FOR THIS ASSESSEE HAS TO FILE COMPLETE CASH FLOW STATEMENT OF THE PERIOD EVIDENCING AS HOW THE CASH BOOK HAS BEEN WORKED OUT WITH DETAILS SUPPORTING. 2.7(II) IF THE ASSESSEE GIVES A COMPLETE CASH BOOK AND FUND FLOW STATEMENT, HE HAS TO EXPLAIN THE REPAYMENT OF LOAN WITH SUPPORTING. 8 2.7(III) THIS IS A CLAIM MADE BY THE ASSESSEE AGAIN ST THE WORKING OF THE ASSESSING OFFICER, HENCE, THE BURDEN OF PROOF LIES WITH THE ASSESSEE AND THEREFORE, IT IS U PON THE ASSESSEE TO PROVE THAT THE CLAIM MADE BY IT IS BONA FIDE AND SUPPORTED BY PRIMARY EVIDENCE. 2.7(IV) IT IS FOR THE ASSESSEE TO PROVE IT. THE INNER DETAILS OF CALCULATION OF INTEREST AND R EPAYMENTS AS PER GIRVI REGISTERS ARE ENCLOSED AS UNDER: - 1. BS-4 AND BS-11 01 PAGE 2. BS-12 PAGES 3. BS-13 30 PAGES THE INNER DETAILS OF ADVANCES AS NOTED FROM THE GIR VI REGISTER ARE ENCLOSED AS UNDER: 1. BS-11 06 PAGES 2. BS-12 12 PAGES 3. BS-13 22 PAGES ENCL: AS ABOVE YOURS FAITHFULLY, SD/- (HIMANSHU KUMAR PANDEY) ACIT-4(1), INDORE 3.3 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, REMAND/ APPRAISAL REPORT AND DELETED THE ADDITION AS CONTAINED IN PAR A 4.2.2 OF THE IMPUGNED ORDER AGAINST WHICH THE REVENUE IS IN APPE AL BEFORE THIS TRIBUNAL. 3.4 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , CONCLUSION DRAWN IN THE IMPUGNED ORDER, REMAND REPORT/APPRAISA L REPORT AND 9 THE ASSERTION MADE BY LD. RESPECTIVE COUNSEL ARE KE PT IN JUXTAPOSITION AND ANALYSED, THE STAND OF THE ASSESS ING OFFICER AND IDENTICAL SUBMISSION OF LD. DR BEFORE US ARE THAT I N THE GIRVI REGISTER, THE ADVANCES MADE BY THE ASSESSEE FOR THE F.Y. COMES TO RS.7,74,722/- AND AFTER MULTIPLYING BY TEN, THE AMOUNT COMES TO RS.77,47,220/-, CONSEQUENTLY, 1/5 TH SHARE OF THE ASSESSEE COMES TO RS.15,49,444/-. IDENTICAL IS THE SITUATION IN TH E REMAINING FOUR CASES. EVEN AS PER THE APPRAISAL REPORT, PREPARED B Y THE DEPARTMENT, THE OPENING CAPITAL FROM GIRVI REGISTER WAS ARRIVED AT RS.1,12,85,080/- AND THE ASSESSEE GROUP HAS CLAIMED THAT THE MONEYLENDING BUSINESS WAS DONE BY THE ASSESSEE GROU P FOR THE LAST 40 YEARS, THEREFORE, WE FIND THAT THE ASSESSIN G OFFICER HAS MISDIRECTED HIMSELF IN IGNORING BOTH THE OPENING CA PITAL AND REPAYMENT RECEIPTS, DURING THE YEAR, WHILE MAKING T HE ADDITIONS. THE SUBMISSION OF THE ASSESSEE WAS FOUND VERIFIABLE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FROM T HE ASSESSMENT ORDER PASSED BY THE SUCCESSOR ASSESSING OFFICER FOR ASSESSMENT YEAR 2000-01 TO 2007-08 WHEREIN WORKING OUT OF THE 10 ADVANCE AND THE REPAYMENT RECEIPT WERE DULY CONSIDE RED. EVEN IN THE REMAND REPORT, NOTHING CONTRARY WAS BROUGHT TO THE NOTICE OF THE LEARNED FIRST APPELLATE AUTHORITY. THE REMAN D REPORT WAS ALSO DULY CONSIDERED. IN VIEW OF THESE UNCONTROVERT ED FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN IN THE IM PUGNED ORDER. SO FAR AS THE CONTENTION OF THE REVENUE THAT THE DETAI LS WERE NOT GOT VERIFIED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ALSO WITHOUT ANY BASIS BECAUSE THE LEARNED FIRST AP PELLATE AUTHORITY REACHED TO A CONCLUSION AFTER EXAMINING T HE REMAND REPORT/APPRAISAL REPORT FROM THE ASSESSING OFFICER, THEREFORE, ON THIS COUNT ALSO, THERE IS NO MERIT IN THE ASSERTION OF THE REVENUE. IDENTICAL IS THE SITUATION FOR GROUND NOS.4 & 4.1 O F THE GROUNDS RAISED BY THE REVENUE, THEREFORE, THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. FINALLY, ALL THE APPEALS OF THE REVENUE ARE HAVING NO MERIT, CONSEQUENTLY, DISMISSED. 11 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT TH E CONCLUSION OF THE HEARING ON 24.5.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24.5.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), CIT(DR), GUARD FILE !VYS!