SHRI MAHENDRA LAL SALUJA, BILASPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1), BILASPUR, BILASPUR

ITA 212/RPR/2017

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9306 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2022
• Assessment Year: 2007-2008
• Appeal Filed On: 03-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Retraction; Set aside
• Section: 132; 154

Judgement Text

आयकर अऩीऱीय अधधकरण, रायऩ ु र न्यायऩीठ, रायऩ ु र IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR श्री रविश स ू द, न्याययक सदस्य एवं श्री अरुण खोड़वऩया, ऱेखा सदस्य के समक्ष । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अऩीऱ सं./ITA No.212/RPR/2017 (ननधाारण वषा / Assessment Year : 2007-2008) Shri Mahendra Lal Saluja, I.F.O. Dr. Ghosh Nursing Home, Tikrapara, Bilaspur Vs ACIT, Circle-2(1), Bilaspur PAN No. : ANOPS 4345 M (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri R.B.Doshi, CA राजस्व की ओर से /Revenue by : Shri Sanjay Kumar, Sr. DR स ु निाई की तारीख / Date of Hearing : 27/07/2022 घोषणा की तारीख/Date of Pronouncement : / /2022 आदेश / O R D E R Per Arun Khodpia, AM : This appeal is filed by the assessee against the order passed by the CIT(A), Bilaspur, dated 21.03.2017, on the following grounds :- 1) That under the facts and circumstance of the case, the Ld. CIT (A) has erred in law and facts in ignoring the clear directions- observations made by the hon’ble members of the ITAT. 2. That as per clear directions of the hon’ble bench ITAT, all the total of various additions made and finally sustained in hands of assessee as well as other family members during years- period of search should be worked out and then the difference between the total of addition and Rs. One Crore is to be added, that too not entirely to the income of the assessee alone. The A.O. as well as the Ld. CIT (A) had totally ignored this clean direction of the hon’ble members of the ITAT. This is highly unlawfull improper. 3. That even after filing application for the rectification u/s 154 on dt. 24/10/2016, was disposed off ex parte without affording any law full opportunity which is highly erroneous, perverse and contrary to the facts of the case. Thus the order is bad in law and deserves to be set aside or revised accordingly. 4. That the total addition made to the income of assessee alone that too in one year A.Y. 2007-08 is highly improper, unlawfull and unjustified under the facts and circumstance of the case and also against the observations and law full findings of the ITA No.212/RPR/2017 2 hon’ble members of the ITAT. The Hon’ble ITAT has cleanly observed and indicated that entire addition connot be added to the total income of the assessee. This clear observation- direction has been totally ignored, thus the order is highly improper and unlawfull. That the appellant humbly craves leave to add, urge alter, modify or withdraw and grounds before or at the time of hearing. 2. Brief facts of the case are that the assessee family is in the business of pawning, sale, purchase of gold and silver jewllery and sale and purchase of gold silver bullion. There was a search and seizure operation was conducted in the residential premises of assessee i.e. Shri Mahendra Lal Saluja, Shri Satish Saluja and Shri Praveen Saluja at Tikarapara, Bilaspur and in business premises of M/s Mahendra Jewellers (Prop. Shri Praveen Saluja), Budhwari Bazar, Bilaspur. During the search operation, there were certain cash, jewellery (gold and silver) found from the residence of assessee and business premises of M/s Mahendra Jewellers, details of which are mentioned by the AO in its assessment order at page 2. Apart from the above, 146 NSCs in the name of various persons of Saluja Family were seized along with books of accounts and documents as per panchnama. In the course of assessment proceedings, the AO noted that during the search the search party had found ACs, TVs and other luxury goods and it was observed that the assessee was enjoying luxurious life, however, the house-hold withdrawal shown in the Income-tax returns are meagre. The assessee was asked to explain the low withdrawals but the assessee could not furnish complete break-up of household expenses. Therefore, the AO estimated the household expenditure for the impugned assessment year at Rs.10,08,000/-. After ITA No.212/RPR/2017 3 deducting the withdrawal shown by the assessee at Rs.3,70,300/-, the AO determined the unexplained expenses of the family for the year at Rs.6,37,700/-. Thereafter the AO divided the same equally among three (3) main persons of the family, Mahendra Lal Saluja (assessee), Praeen Saluja and Satish Saluja and accordingly, made an addition of Rs.2,12,566/- to the total income of the assessee. 3. Further the AO noted that during the search u/s.132(1) of the Act, an amount of Rs.1 Crore was declared as undisclosed income u/s.132(4) of the Act against the undisclosed assets/transactions & other irregularities noticed during the search. It was also stated on oath that the disclosure is made by the assessee after obtaining permission from both the sons and other family members and requested to submit the break up of the same, but the assessee neither submitted the breakup nor was tax paid by the assessee. However, after a lapse of about two years the assessee filed return with Nil disclosure u/s.132(4) of the Act. In absence of any plausible explanation with regard to disclosure made u/s.132(4) of the Act, added Rs.1,00,00,000/- to the total income of the assessee. Similarly, the AO added Rs.4,80,080/- on account of suppressed rent receipt u/s.69A of the Act. 4. Against the above additions made by the AO, the assessee preferred appeal before the CIT(A) and the Ld CIT(A) has deleted the addition made by Ld AO. Subsequently, aggrieved by the order of the Ld CIT(A) dated 28.04.2010, revenue preferred an appeal before the Tribunal, the same was disposed off vide order dated 27.02.2012 in ITA ITA No.212/RPR/2017 4 No.227/BLPR/2010, allowing the appeal partly in favour of revenue with directions to restore the issue back to the files of AO for statistical purposes. Findings / observations of the ITAT in the said order were as under :- 4.4 We have considered the rival submissions made by both the sides, perused the orders of the A.O. and the ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that during the course of search the statement of the assessee was recorded u/s.132(4) of the Act in which Shri Mahendra Lal Saluja had offered Rs. 1 crore as undisclosed income against the undisclosed assets/transactions and other irregularities noticed during the course of search. We find Shri Mahendralal Saluja had also stated on oath that the disclosure is made after obtaining permission from both sons and other family members. A time of 15 days was requested to submit the break-up of heads under which the disclosure is to be considered. It was further promised that the entire tax will be paid on this disclosure during the current year. However, we find the assessee neither retracted the statement within a reasonable time nor paid any tax as promised and after a period of two years filed the return with nil disclosure u/s 132(4). Since the assessee has not retracted the statement made by him u/s 132(4) in writing within a reasonable time, therefore, the A.O., in our opinion, is justified in making the addition. The statement made during the course of search u/s 132(4) has got evidenciary value. The Id. ClT(A), in our opinion is not justified in deleting the addition merely because the A.O. has not given any independent basis to hold that the assessee earned Rs. 1 crore over and above the income determined on the basis of documents/assets noticed during the course of search. The affidavit filed by the assessee during the course of assessment proceedings in our opinion are of no use since those persons were not witness to the search taken place at the business premises of M/ s Mahendra Jewellers, the affidavits are dtd.4.12.2008 whereas the search took place on 1.2.2002 and both the persons are close relations of the assessee. Therefore, those affidavits in our opinion are only self serving documents without any evidenciary value. In our opinion any retraction by the assessee has to be in writing, in unambiguous terms and has to be made within a reasonable time. The submission of the Id. Counsel for the assessee that since the assessee has not paid advance tax and since there is no disclosure in the return filed, therefore, there is implied retraction, in our opinion, does not carry any force. Therefore, addition has to be made on the basis of disclosure made during the course of search in the statement recorded u/s.132(4) since it has got evidenciary value. ITA No.212/RPR/2017 5 4.5 However, we find the assessee in the statement recorded u/s 132(4) had disclosed Rs. 1 crore against the undisclosed assetl transaction and other irregularities noticed during the course of search. Further, the disclosure made by the assessee was after obtaining permission from both sons and other family members. Therefore, the entire disclosure made by the assessee was towards the irregularities and undisclosed assets/transactions of himself as well as that of various family members. Under these circumstances the entire amount of Rs. 1 crore cannot be added to the total income of the assessee. Since the A.O. has made addition on account of undisclosed assets/transactions and other irregularities in the hands of various family members which are either confirmed by the Tribunal or having sustained by the Id. CIT(A) the assessee has not gone in appeal and accepted the same, therefore, we restore the issue back to the in the hands of the assessee as well as other family file of the A.O. with a direction to find out the amount of various additions members and restrict the addition to the difference between the amount of Rs. 1 crore disclosed during the course of search and various additions finally sustained in the hands of the assessee and other family members. While doing so the A.O. shall give due opportunity of being heard to the assessee. The ground raised by the Revenue is accordingly partly allowed for statistical purpose, 5. Afterwards, on 30.08.2012 in compliance to the directions of the Tribunal Ld AO has passed an order giving effect to the order of ITAT dated 27.02.2012. Opportunity of being heard was given to the assessee vide letter dated 08.06.2012 and 03.07.2012 but none attended the office of AO neither any compliance / submission was made by the assessee or on behalf of assessee on both the occasions. Revised total income of the assessee was then computed at Rs. 95,67,630/-. 6. After passing of a significant period assessee filed a petition u/s 154 before the AO on 24.10.2016 for rectification in the appeal effect order dated 30.08.2012 regarding arrear demand for AY 2007-08. Assessee has pointed out certain mistakes in the appeal effect order of the Ld AO and requested for rectification. AO rejected the contentions of the ITA No.212/RPR/2017 6 assessee while passing the order on application u/s 154, observations of the AO were as under:- After going through the application of the assessee it is worth to mention here that before giving effect to Hori'ble HAT, Bilaspur Bench's order the notice/letter was issued to assessee Shri Mahendra la1 Saluja on 08/06/2012 and fixing the case on 19/06/2012 and duly served to the assessee. In response to the letter/notice the assessee did not attend the case, further letter/notice was issued on 03/07/2012 and fixing the case on 16/07/2016, but the assessee still not attended the case. After giving ample of opportunities to the assessee, he neither attended the case nor filed any written reply in response to the letter/notices issued to him. After elapse of more than 4 years, he has filed an application regarding correction/rectification of the appeal effect order passed on 30.08.2012 and wishes to adjust entire amounts which were confirmed by Hon'ble CIT(A) , Bilaspur in the case of assessee as well as his other family members for the block period 2001-02 to 2007-08. This claim cannot be given to the assessee as he has surrendered Rs.1,00,00,000/- for current year (i.e. F.Y.200G-07) relevant to A.Y.2007-08 . Therefore, additions which were confirmed by Hon'ble ClT(A), 7. To challenge the order of AO u/s 154, assessee preferred an appeal before the Ld CIT(A) but with no success, Ld CIT(A) has confirmed the order and finding of Ld AO and dismissed the appeal of the assessee. Now the assessee is in appeal against the order of Ld CIT(A) affirming the findings of the Ld AO in order u/s 154. 8. Ld AR of the assessee at the outset has shown us a statement u/s 132 dated 01.02.2007 of the assessee Mr. Mahendra Lal Saluja on pages 1 to 3 of the paper book. It was the submission of the Ld AR that the assessee had surrendered an amount of Rs. 1.00 Crore as per statement given which further needs to be reduced by the amount of additions already surrendered by the family members of the assessee, the remainder should be added in the hands of various family members in equal ratio in all 7 years i.e from AY 2001-02 to 2007-08. It is further ITA No.212/RPR/2017 7 submitted that the Ld AO and Ld CIT(A) have not understood the directions of the ITAT in this regard and have made the adjustment confined to the AY 2007-08 only. In AY 2007-08 also certain additions which were made in the hands of other family members and needs to be deducted from the amount of Rs. 1.00 Crore were not reduced by the Ld AO, thus it was the prayer to direct the AO to recalculate the entire demand as directed by ITAT. Order of CIT(A) shall also be set aside. 9. On the other hand, ld. Sr DR relied on the orders of the authorities below 10. We have considered the rival contentions, perused the material available on records and findings of the coordinate bench of the ITAT as referred to supra. 11. Based on statement of the assessee u/s 132 dated 01.02.2017 and order of ITAT in the present case, the first contentions of the assessee as to restrict the addition to the difference of Rs. 1 Crore and additions already sustained in the hands of assessee and other family members was fortified by the findings of the ITAT thus we hold the same as correct and acceptable. The second contention to divide the said remainder amount between the assessee and other members of family is also categorically mentioned by the ITAT in its order in para 4.5 (supra), wherein it was observed that “Therefore, the entire disclosure made by the assessee was towards irregularities and undisclosed assets/transactions of himself as well as that of various family members” and thus held correct. Regarding third contention of the ITA No.212/RPR/2017 8 assessee that the amount should be divided equally in 7 years i.e form AY 2001-02 to 2007-08 has no base since neither such finding was given by the ITAT in the order referred herein above nor it was a mention by the assessee during the course of search while statement u/s 132 were given by the assessee, such contention is devoid and bereft of merit, thus unacceptable. 12. Considering the aforesaid observations, we are of the considered view that the Ld AO who was directed by the ITAT by order dated 27.02.2012 for the AY 2007-08 in ITA 227/BLPR/2010 to calculate the amount of addition as described therein and contented by the assessee in its first 2 contentions mentioned herein above, but the same could not be properly understood and worked out by the Ld AO, thus the appeal effect order passed by the Ld AO has mistakes apparent from records and needs rectification as requested u/s 154 by the assessee. Assessee’s non compliance while the appeal effect order was passed is also noted herewith, but because the mistake had took place on the part of department, in the interest of justice which will not cause any prejudice to the revenue if one more opportunity is granted to the assessee to represent its case before the AO. Accordingly, we restore the matter back to the files of AO with the directions to re calculate the amount of addition in the hands of assessee in terms of our observation herein above. Needless to say, that reasonable opportunity of being heard be give to assessee and the assessee is also directed to cooperate with the AO positively for early disposal of the case. ITA No.212/RPR/2017 9 13. In the result appeal of the assessee is allowed for statistical purposes. Order pronounced in pursuance with Rule 34(4) of ITAT Rules, 1963 on / / 2022. (RAVISH SOOD) (ARUN KHODPIA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER रायऩ ु र/Raipur; ददनाांक Dated / /2022 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, रायऩ ु र/ITAT, Raipur Date Initial 1. Draft dictated on 17.10.22 (typed directly on Hon’ble AM’s Computer) Sr.PS 2. Draft placed before author 17.10.22 Sr.PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. File sent to the Bench Clerk Sr.PS 8. Date on which file goes to the Sr.PS 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 1. अऩीऱाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. विभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, रायऩ ु र/ DR, ITAT, Raipur 6. गार्ड पाईऱ / Guard file. सत्यावऩत प्रयत //True Copy//