Ram Kumar Soni, Suratgarh V. Pr. CIT-1, Jodhpur , Jodhpur

ITA 21/JODH/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7280 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 07-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANCHITA KUMAR
• Keywords: Revision of order; Loose papers; Deemed to accrue or arise in india; Question of law
• Section: 263; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR BENCH , JODHPUR BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM ITA. NO. 21/JODH/2021 ASSESSMENT YEAR : 2015-16 SHRI RAM KUMAR SONI, WARD NO. 4, SURATGARH. VS. THE PR. CIT-1, JODHPUR. PAN/GIR NO.: CBGPS 5698 D APPELLANT RESPONDENT ASSESSEE BY : SHRI RAJENDRA JAIN (ADV.) REVENUE BY : SMT. SANCHITA KUMAR (CIT) A DATE OF HEARING : 11/08/2021 DATE OF PRONOUNCEMENT : 07/09/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. PR.CIT, JODHPUR DATED 18.03.2021 CHALLENGING THE OR DER PASSED U/S 263 OF THE IT ACT PERTAINING TO ASSESSMENT YEAR 2015-16 . 2. DURING THE COURSE OF HEARING, THE LD. AR HAS TAK EN US THROUGH SHOW CAUSE NOTICE ISSUED BY THE LD. PR. CIT AND TH E FINDINGS RECORDED IN THE IMPUGNED ORDER WHICH READ AS UNDER:- (I) ISSUE/POINT: DURING THE COURSE OF SURVEY U/S1 33A, EXCESS STOCK OF GOLD JEWELRY OF RS. 24,82,886/- AND SILVER JEWELRY OF RS. ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 2 9,18,000/- AGGREGATING TO RS. 34,00,886/- WAS FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE. HOWEVER, IN THE TRADING ACCOUNT, THE ASSESSEE HAS ENHANCED THE GOLD JEWELRY AND SILVER JEWELRY BY RS. 56,85,200/- AND RS. 10,72,912/-, RES PECTIVELY. THE TOTAL ENHANCEMENT MADE BY THE ASSESSEE COMES TO RS. 67,58,112/-. IN THIS WAY, THE ASSESSEE HAS ENHANCE THE STOCK OF GOLD AND SILVER JEWELRY IN THE TRADING AMOUNT, IN E XCESS BY SUM OF RS. 33,57,226/-. THE AO FAILED TO EXAMINE AND VERIF Y THE REASON OF ENHANCEMENT IN THE TRADING AMOUNT. THE AO IS DIRECTED TO EXAMINE AND VERIFY THE DOCUME NTS, STOCK INVENTORY AND STATEMENTS OF THE ASSESSEE RECORDED D URING THE COURSE OF SURVEY, GOLD AND SILVER JEWELRY SURRENDE RED DURING THE COURSE OF SURVEY VIS-A-VIS GOLD AND SILVER JEWELRY STOCK SHOWN IN THE TRADING ACCOUNT. 3. IT WAS SUBMITTED THAT DURING THE COURSE OF SURVE Y CONDUCTED ON 09.12.2014, THERE WAS A DIFFERENCE IN THE PHYSICAL STOCK AND THE STOCK RECORDED IN THE BOOKS OF ACCOUNTS AMOUNTING TO RS. 67,58,112/- AND THEREFORE, THE ASSESSEE IN HIS RETURN OF INCOME HAS OFFERED AN AMOUNT OF RS. 70,00,000/- FOR THE DISCREPANCIES SO FOUND D URING THE COURSE OF SURVEY. IT WAS SUBMITTED THAT THERE IS A CATEGORICA L FINDING RECORDING BY THE ASSESSING OFFICER WHEREIN HE HAS STATED THAT TH E ASSESSEE WHILE FILING HIS RETURN OF INCOME HAS OFFERED ADDITIONAL INCOME OF RS. 70,00,000/- FOR THE DISCREPANCIES POINTED OUT AT TH E TIME OF SURVEY AND THE SAME HAS BEEN INCLUDED AS INCOME FROM OTHER SOU RCES IN THE COMPUTATION OF INCOME AND THEREAFTER TAX @ 30% HAS BEEN LEVIED INVOKING PROVISIONS OF SECTION 115BBE OF THE IT ACT . IT WAS ACCORDINGLY ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 3 SUBMITTED THAT DISCREPANCIES IN THE STOCK AT THE TI ME OF SURVEY HAS BEEN DULY EXAMINED AND TAKEN INTO CONSIDERATION BY THE A SSESSING OFFICER AND THE SAME FOUND A CLEAR MENTION IN THE ASSESSMEN T ORDER SO PASSED BY HIM. IT WAS FURTHER SUBMITTED THAT THE LD. PR. C IT HAS WRONGLY STATED THAT DURING THE COURSE OF SURVEY, EXCESS STOCK OF G OLD JEWELLERY OF RS. 24,82,886/- AND SILVER JEWELLERY OF RS.9,18,000/- A GGREGATING TO RS. 34,00,886/- HAS BEEN FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE. IT WAS SUBMITTED THAT THE SAID FIGURE RELATES TO THE S TOCK WHICH WAS RECORDED IN THE BOOKS OF ACCOUNTS AS ON THE DATE OF THE SURVEY AS APPARENT FROM THE TRADING ACCOUNT FOR THE PRE SURVE Y PERIOD. IT WAS ACCORDINGLY SUBMITTED THAT THE EXCESS STOCK WHICH W AS FOUND DURING THE COURSE OF SURVEY WAS RS. 67,58,112/- AND THE STOCK OF GOLD AND SILVER IN THE TRADING ACCOUNT HAS BEEN CORRESPONDING INCREASE D IN THE TRADING ACCOUNT BY THE ASSESSEE AND THE SAME HAS BEEN DULY EXAMINED BY THE ASSESSING OFFICER. IT WAS ACCORDINGLY SUBMITTED THA T THE MATTER WAS DULY EXAMINED BY THE ASSESSING OFFICER AND THE ORDER SO PASSED BY THE ASSESSING OFFICER CANNOT BE HELD AS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE. 4. PER CONTRA, LD. DR RELIED ON THE FINDINGS OF THE LD. PR. CIT AND OUR REFERENCE WAS DRAWN TO HIS FINDINGS WHICH WE HAVE A LREADY TAKE NOTE OF SUPRA AND HAVE NOT BEEN REPRODUCED AGAIN FOR THE SA KE OF BREVITY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF STATEMENT OF SH RI RAM KUMAR SONI RECORDED U/S 133A DATED 9.12.2014, IT IS NOTED THAT IN RESPONSE TO QUESTION NO. 6, HE HAS OFFERED AN AMOUNT OF RS 70 L ACS TO TAX TOWARDS ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 4 DIFFERENCE IN STOCK AND OTHER DEFICIENCIES AND DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THERE IS A CLEAR AFFIRMATIO N BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS OFFERED ADDITIONAL IN COME OF RS 70 LACS FOR STOCK AND OTHER DISCREPANCIES POINTED OUT DURING TH E COURSE OF SURVEY AS INCOME IN HIS RETURN OF INCOME AND THE SAME WAS BROUGHT TO TAX AT THE RATE OF 30% UNDER SECTION 115BBE OF THE ACT AS IS CLEAR FROM THE FOLLOWING FINDINGS RECORDED IN THE ASSESSMENT ORDER : 3. TAXATION IN VIEW OF SECTION 115BBE OF THE IT AC T, 1961- THE ASSESSEE WHILE FILING HIS RETURN OF INCOME FOR A.Y. 2015- 16 HAS INCLUDED THE AMOUNT OF RS. 70,00,000/- AS IN COME FROM OTHER SOURCES IN HIS COMPUTATION OF INCOME. HO WEVER WHILE CALCULATING THAT TAX ON THIS INCOME, DUE TAXE S HAS BEEN PAID AT NORMAL RATES INSTEAD OF TAX PAYABLE @ 30% PAYABLE IN VIEW OF THE PROVISIONS OF SECTION 115BBE OF THE I.T. ACT,1961 APPLICABLE DURING THIS YEAR. VIDE ORD ER SHEET ENTRY DATED 30.11.2017, THE ASSESSEE WAS POINTED OU T THE APPLICABILITY OF SECTION 115BBE FOR TAXING INCOME O F RS. 70,00,000/- SURRENDERED OF @30%, WHICH RELATES TO S ECTION 69/69A/69B/69C/69D OF THE INCOME-TAX ACT, 1961. THE SURRENDER WAS MADE IN THIS CASE BY THE ASSESSEE IN VIEW OF THE DISCREPANCIES IN THE 'DIFFERENCE IN CASH PHY SICALLY FOUND AND AS PER BOOKS OF ACCOUNT, ON ACCOUNT OF EX CESS STOCK FOUND, ON ACCOUNT OF UNEXPLAINED ADVANCES AND LOOSE PAPER' WHICH IS ADMITTED IN THE STATEMENT RECORDED DURING THE SURVEY AND AFFIDAVIT DULY SIGNED BY THE ASSESSEE FI LED LETTER. THE ASSESSEE HAS OFFERED THE INCOME FOR TAXATION AS THE ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 5 TRANSACTIONS RECORDED IN THE LOOSE PAPERS WERE NOT RECORDED IN THE BOOKS AND STANDS UNEXPLAINED. SINCE THE ASSE SSEE HAS FAILED TO EXPLAIN THE SOURCE OF INCOME DISCLOSED ON THE BASIS OF INCRIMINATING DOCUMENTS/PAPERS, THESE TRANSACTIO NS COME IN THE AMBIT OF SECTION 69/69A/69B/69C/69D OF THE I NCOME- TAX ACT, 1961. THE TAXES ARE TO BE PAID IN VIEW OF PROVISIONS OF SECTION 115BBE OF THE IT ACT, 1961 WHICH IS APPL ICABLE IN THE INSTANT YEAR. THE A/R OF THE ASSESSEE ALSO HAS OBJECTED TO APPLYING PROVISIONS OF SECTION 115BBE IN THE CAS E OF ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT IN T HE CASE OF M/S KIM PHARMA PVT. LTD. V/S CIT IN ITA NO. 106 OF 2011 , HON'BLE PUNJAB & HARYANA HIGH COURT IN DECISION DATED 27.04 .2011 WHILE DECIDING THE QUESTION OF LAW :- B. WHETHER THE ACTION ON THE PART OF THE ID. AUTHO RITIES BELOW TO SEGREGATE THE SURRENDERED INCOME FORM BUSI NESS INCOME AND TREAT IT AS DEEMED INCOME AND TAXING THE SAME AFTER REFUSING SET OFF U/S 701 AND 71 OF THE ACT IS LEGALLY SUSTAINABLE IN THE EYES OF LAW? C. WHETHER THE ACTI ON ON THE PART OF THE ID. AUTHORITIES BELOW NOT TO TREAT THE INCOME SURRENDERED DURING SURVEY AS 'INCOME FORM BUSINESS' AND ADJUSTABLE AGAINST THE BUSINESS LOSSES DETERMINED F OR THE YEAR, IS LEGALLY SUSTAINABLE IN THE EYES OF LAW?', DISMISSED THE APPEAL OF THE ASSESSEE I.E. CONFIRMED THE ITAT ORDER TAXING INCOME DISCLOSED DURING SURVEY UNDER THE PRO VISION OF SECTION 69/69A/69B/69C/69D OF IT ACT. THUS, THOUGH THE ASSESSEE DISCLOSED THE ENTIRE AMOUNT OF RS. 70,00,0 00/- TAXATION IN TOTAL INCOME BUT THE DUE TAXES ARE TO B E RE- ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 6 CALCULATED @ 30% IN VIEW OF SECTION 115BBE OF THE A CT, 1961 WHICH HAS NOT BEEN DONE BY THE ASSESSEE. 6. WE THEREFORE FIND THAT THE MATTER RELATING TO EX CESS STOCK FOUND DURING THE COURSE OF SURVEY AND TAXABILITY THEREOF HAS BEEN SPECIFICALLY DISCUSSED IN THE BODY OF THE ASSESSMENT ORDER. THUS , IT CANNOT BE SAID THAT THERE IS FAILURE ON PART OF THE ASSESSING OFFI CER TO EXAMINE THE SAME. 7. REGARDING FIGURES OF EXCESS STOCK OF GOLD JEWELL ERY OF RS. 24,82,886/- AND SILVER JEWELLERY OF RS.9,18,000 /- AGGREGATING TO RS. 34,00,886/- AS POINTED OUT BY THE LD PCIT, IT I S NOTED THAT THE SAID FIGURES RELATES TO THE STOCK WHICH WAS RECORDED IN THE BOOKS OF ACCOUNTS AS ON THE DATE OF THE SURVEY AS APPARENT FROM THE T RADING ACCOUNT FOR THE PRE SURVEY PERIOD WHICH IS ALSO REPRODUCED BY T HE LD PCIT IN THE IMPUGNED ORDER AND NOT THE FIGURE OF EXCESS STOCK F OUND DURING THE COURSE OF SURVEY. THE EXCESS STOCK WHICH WAS FOUND DURING THE COURSE OF SURVEY WAS RS. 67,58,112/- AND THE STOCK OF GOLD AND SILVER IN THE TRADING ACCOUNT HAS BEEN CORRESPONDING INCREASED IN THE TRADING ACCOUNT BY THE ASSESSEE AND THE SAME HAS BEEN DULY EXAMINED BY THE ASSESSING OFFICER ALONG WITH OTHER DISCREPANCIES FO UND DURING THE COURSE OF SURVEY AND THE DISCREPANCIES ON ACCOUNT O F EXCESS STOCK OF RS 67,58,112/- AND OTHER DISCREPANCIES ADDING UP TO RS 70 LACS HAS BEEN OFFERED TO TAX BY THE ASSESSEE AS WE HAVE NOTED ABO VE AND DULY BROUGHT TO TAX BY THE ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 115BBE OF THE ACT. ITA NO.21/JODH/2021 SHRI RAM KUMAR SONI VS. PR. CIT 7 8. IN LIGHT OF AFORESAID DISCUSSIONS AND IN THE ENT IRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO BASIS TO HOL D THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ORDER OF THE LD PCIT IS HEREBY SET-ASIDE AND THAT OF THE ASSESSING OFFICER IS SUSTAINED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/09/2021. SD/- SD/- ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) JUDICIAL MEMBER ACCOUNTANT MEMBER JODHPUR DATED:- 07/09/2021. *SANTOSH COPY OF THE ORDER FORWARDED TO: 1. A. THE APPELLANT- SHRI RAM KUMAR SONI, SURATGARH. 2. THE RESPONDENT- PR. CIT-1, JODHPUR. 3. CIT 4. CIT(A) 5. DR, ITAT, JODHPUR. 6. GUARD FILE { ITA NO. 21/JODH/2021} BY ORDER, ASST. REGISTRAR