Appeal details
Counselvise Citation
[2009] 115 COUNSELVISE.COM (IT) 1080 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2009
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
01-10-2009
Assessment Year
2003-2004
Appeal Filed On
15-01-2007
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT AND SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NOS. 1033 & 1034/DEL/2009 ASSESSMENT YEARS : 2005-06 & 2006-07 THE ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-17, JHANDEWALAN, NEW DELHI. VS. SHRI BASANT KUMAR TANEJA, 586, GANDHI CLOTH MARKET, CHANDNI CHOWK, DELHI. PAN : AAAPT1177D C.O. NOS.227 & 228/DEL/2009 (ITA NOS. 1033 & 1034/DEL/2009) SHRI BASANT KUMAR TANEJA, 586, GANDHI CLOTH MARKET, CHANDNI CHOWK, DELHI. PAN : AAAPT1177D THE ASSTT. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-17, JHANDEWALAN, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.N. MARWAH/SHRI ANIL KUMAR, CA REVENUE BY : SHRI A.K. PANDEY, CIT, DR/MS PRATIMA KAUSHIK, SR. DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THE APPEALS ARE FILED BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE. THESE ARE DISPOSED OF BY THIS SINGLE ORD ER FOR THE SAKE OF CONVENIENCE. ITA NO.1033/DEL/2009 AND C.O. NO.227/ DEL/2009 ARE DIRECTED AGAINST THE ORDER OF THE CIT (A) DATED 19 TH DECEMBER, 2008 FOR ASSESSMENT YEAR 2005-06 AND ITA NO.1034/DEL/2009 AND C.O. NO.228/DE L/09 ARE DIRECTED AGAINST ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 2 THE ORDER OF THE CIT (A) DATED 19 TH DECEMBER, 2008 FOR ASSESSMENT YEAR 2006- 07. GROUNDS OF APPEAL AND GROUNDS OF CROSS OBJECTI ONS FOR BOTH THE YEARS READ AS UNDER:- ITA NO.1033/DEL/2009 (A-I) LD. CIT (A) HAS ERRED IN FACTS AND CIRCUMSTA NCES IN RESTRICTING THE ADDITION OF RS.6,65,125/- MADE ON A CCOUNT OF ESTIMATED G.P. RATE TO A SUM OF RS.50000/- ONLY (A-II) WHILE DECIDING THE ISSUE IN FAVOUR OF THE A SSESSEE, THE LD. CIT (A) HAS NOT TAKEN INTO ACCOUNT INCRIMINATIN G DOCUMENTS SEIZED DURING THE SEARCH WHICH PROVES THA T THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE NOT TRUSTWORTHY. ITA NO.1034/DEL/2009 (A-I) LD. CIT (A) HAS ERRED IN FACTS AND CIRCUMSTA NCES IN DELETING THE ADDITION OF RS.15,75,399/- MADE ON ACC OUNT OF INCOME DECLARED DURING SEARCH PROCEEDINGS BUT NOT I NCLUDED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. (A-II) LD. CIT (A) HAS ERRED IN FACTS AND CIRCUMST ANCES OF THE CASE IN DECIDING THIS ISSUE IN FAVOUR OF THE ASSESS EE WHEN ASSESSEE WAS NOT ABLE TO TALLY THE JEWELLERY ITEMS CLAIMED TO HAVE DISCLOSED BY HIM IN THE RETURN FILED FOR A.Y. 1992-93 EITHER BEFORE THE A.O. OR AT APPELLATE STAGE. (A-III) WHILE DECIDING THIS ISSUE IN FAVOUR OF ASS ESSEE, LD. CIT (A) HAS NOT APPRECIATED THE FACT THAT NO RETURN OF WEALTH TAX WAS FILED BY THE ASSESSEE AFTER A.Y. 1992-93. (B-I) LD. CIT (A) HAS ERRED IN FACTS AND CIRCUMSTA NCES IN RESTRICTING THE ADDITION OF RS.10,95,019/- MADE ON ACCOUNT OF ESTIMATED G.P. RATE TO A SUM OF RS.50000/- ONLY. (B-II) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, LD. CIT (A) HAS NOT TAKEN INTO ACCOUNT INCRIMINATING DO CUMENTS SEIZED DURING THE SEARCH WHICH PROVES THAT THE BOOK S OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE NOT TRUSTWOR THY. C.O. NO.227/DEL/2009 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE RESPONDENTS CASE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS)-II, NEW DELHI, ERRED IN LAW IN DIRECTING THE ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 3 ASSESSING OFFICER TO MAKE AN ADDITION OF RS.50,000/ - REPRESENTING DISALLOWANCE FOR PERSONAL USER OUT OF EXPENSES UNDER THE HEAD VEHICLE, TELEPHONE, MISCELLANEOUS CL AIMED IN THE BOOKS OF ACCOUNT. 2. THAT THE LEARNED CIT (APPEALS)-II, NEW DELHI, W HILE DIRECTING THE ASSESSING OFFICER, FAILED TO CONSIDER AND APPRECIATE, THAT THE RESPONDENT IN THE COMPUTATION OF INCOME HAD OFFERED TO TAX A SUM OF RS.30,483/- OUT OF CAR EXPENSES ON ACCOUNT OF PERSONAL USER. THAT THE APPELLANT, CRAVES, LEAVE TO ADD, ALTER, AM END, SUBSTITUTE, FORGO, ANY OR ALL THE GROUNDS OF CROSS OBJECTIONS BEFORE OR AT THE TIME OF HEARING. C.O. NO.228/DEL/2009 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E RESPONDENTS CASE THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS)-II, NEW DELHI, ERRED IN CONFIRMING THE AD DITION OF RS.31,211/- REPRESENTING CASH RECORDED IN THE BOOKS OF ACCOUNT. 1.1. THAT THE RESPONDENT IS A SOLE PROPRIETOR AND THUS BUSINESS CASH IS KEPT IN HIS POSSESSION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE RESPONDENTS CASE THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS)-II, NEW DELHI, ERRED IN LAW IN DIRECTING THE ASSESSING OFFICER TO MAKE AN ADDITION OF RS.50,000/ - REPRESENTING DISALLOWANCE FOR PERSONAL USER OUT OF EXPENSES UNDER THE HEAD VEHICLE, TELEPHONE, MISCELLANEOUS CL AIMED IN THE BOOKS OF ACCOUNT. 2.1 THAT THE LEARNED CIT (APPEALS)-II, NEW DELHI, WHILE DIRECTING THE ASSESSING OFFICER, FAILED TO CONSIDER AND APPRECIATE THAT THE RESPONDENT IN THE COMPUTATION O F INCOME HAD OFFERED TO TAX A SUM OF RS.38,806/- OUT OF CAR EXPENSES ON ACCOUNT OF PERSONAL USER. 2.2 THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER , AMEND, SUBSTITUTE, FORGO ANY OR ALL THE GROUNDS OF CROSS O BJECTIONS BEFORE OR AT THE TIME OF HEARING. ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 4 2. A SEARCH WAS CONDUCTED AT THE OFFICE AND RESIDEN CE PREMISES OF THE ASSESSEE ON 13 TH DECEMBER, 2005 WHICH RELATES TO ASSESSMENT YEAR 20 06-07. THEREFORE, WE WILL DISCUSS THE FACTS RELATING TO AS SESSMENT YEAR 2006-07. 3. THE ASSESSEE DEALS IN HING. HE FILED HIS RETURN OF INCOME DECLARING INCOME OF RS.20,21,270/- WHICH HAS BEEN ASSESSED BY THE ASSESSING OFFICER AT RS.46,91,688/- MAKING FOLLOWING TWO ADDITIONS:- I) ADDITION ON ACCOUNT OF INCOME DECLARED, BUT NOT DISCLOSED IN THE RETURN RS.15,75,399/-. II) ADDITION ON ACCOUNT OF LOWER GP RATE RS.10,95 ,019/-. 4. THE POST SEARCH INQUIRIES MADE BY THE INVESTIGAT ION WING OF THE DEPARTMENT THE ASSESSEE HAD MADE A DISCLOSURE OF RS .65,83,400/- U/S 132(4) OF INCOME-TAX ACT, 1961 WHICH WAS CLAIMED TO BELONG TO ASSESSEE AND HIS WIFE. HOWEVER, FROM THE RETURN OF INCOME FILED, THE ASSES SING OFFICER OBSERVED THAT ONLY A SUM OF RS.50,08,390/-WAS DISCLOSED IN THE RE TURNS OF INCOME FILED BY THE ASSESSEE AND HIS WIFE THE PARTICULARS OF WHICH WERE AS UNDER:- MRS. ROMA TANEJA 36,88,399/- ASSESSEE 13,20,000/- TOTAL 50,08,399/- 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE LETTER DATED 10 TH DECEMBER, 2007 CLAIMED THAT CASH BALANCE AVAILABLE IN THE BOOKS FOR RS.31,211/- AND THE JEWELLERY WHICH ALREADY STOOD D ISCLOSED IN THE WEALTH TAX RETURN WERE NOT INCLUDED IN THE UNDISCLOSED INCOME AS STATED IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE ASSESSING OFFI CER DID NOT ACCEPT SUCH SUBMISSION OF THE ASSESSEE ON THE GROUND THAT THE S AME IS AFTERTHOUGHT AND ASSESSEE HIMSELF HAD STATED THAT THE AMOUNT OF JEWE LLERY/CASH FOUND IS OFFERED U/S 132(4) OF THE ACT. HE, THEREFORE, ADDED AN AMO UNT OF RS.15,75,399/- TO THE ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 5 UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF CA SH AND JEWELLERY FOUND DURING THE COURSE OF SEARCH AND ACCEPTED AS UNDISCL OSED INCOME BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) OF TH E ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DID NOT TALLY THE JEWELL ERY AS FOUND DURING THE SEARCH AND AS DECLARED IN THE WEALTH TAX RETURN AND UNLESS THE ASSESSEE IS ABLE TO MATCH ITEM TO ITEM, THE CONTENTION CANNOT BE ACCEPT ED, HENCE, IN THE ABSENCE OF FACT MATCHING, INVESTMENT IN JEWELLERY IS BROUGHT T O TAX. 6. THE ASSESSING OFFICER FURTHER NOTICED THAT AS PE R INQUIRIES MADE WITH REFERENCE TO SEIZED MATERIAL, IT HAS CAME TO THE NO TICE THAT THE BILLING DONE BY THE ASSESSEE WAS GROSSLY LOWER THAN THE ACTUAL RATE OF HING . IT WAS EXPLAINED THAT HING IS OF DIFFERENT QUALITY AND THERE IS NO UNIFORM RAT E WHICH COULD BE APPLIED. IT WAS SUBMITTED THAT THE SALES HAVE BEEN ACCEPTED BY SALES-TAX DEPARTMENT. ALL THE IMPORTS MADE BY THE ASSESSEE ARE SUBJECT TO CUS TOMS CLEARANCE AND ARE DULY RECORDED IN THE BOOKS OF ACCOUNT WITH SPECIFIC REFERENCE TO SEIZED PAPER. THEREFORE, IT WAS SUBMITTED BY THE ASSESSEE THAT TH E STATEMENT OF AGENT IS NOT RELIABLE BECAUSE WITH THE SUBSEQUENT STATEMENT, THE AGENT HAS DENIED ABOUT THE ASSESSEE BEING INVOLVED IN UNDER-INVOICING. IN THE ALTERNATIVE, IT WAS SUBMITTED THAT A SURRENDER OF RS.50 LAC HAD ALREADY BEEN MADE WHICH CAN TAKE CARE OF UNDER-INVOICING, IF ANY. CONSIDERING THESE SUBMISS IONS OF THE ASSESSEE THE ASSESSING OFFICER OBSERVED THAT IN EARLIER YEARS TH E GP RATE OF THE ASSESSEE WAS IN THE RANGE OF 15% AND IT SUDDENLY DIPPED TO 4% IN ASSESSMENT YEAR 2006-07. THE ASSESSING OFFICER OBSERVED THAT THIS WAS DUE TO SURRENDER MADE BY THE ASSESSEE. TO LOWER DOWN THE EFFECT, THE ASSESSEE H AS SHOWN ABNORMALLY LOW GP RATE. THUS, THE ASSESSING OFFICER CONSIDERED TH E GP RATE OF 10% ADEQUATE AS THE ASSESSEES BUSINESS WAS TURNING TOWARDS WHOL ESALE BUSINESS APPLYING THAT RATE THE ASSESSING OFFICER COMPUTED THE GP OF THE ASSESSEE AT A SUM OF RS.18,18,839/- OUT OF WHICH THE DECLARED GP OF RS.7 ,33,820/- WAS REDUCED AND THE BALANCE AMOUNT OF RS.10,95,019/- WAS ADDED TO T HE INCOME OF THE ASSESSEE ON ACCOUNT OF LOW GP. IT IS IN THIS MANNER THE ASS ESSMENT WAS FRAMED AT A SUM OF RS.46,91,688/-. ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 6 7. SO AS IT RELATES TO THE ADDITION MADE ON ACCOUNT OF JEWELLERY, IT WAS SUBMITTED BEFORE THE CIT (A) THAT JEWELLERY OF RS.5 2,31,170/- WAS FOUND DURING THE SEARCH OUT OF WHICH JEWELLERY WORTH RS.15,43,79 0/- WAS ALREADY DISCLOSED TO THE DEPARTMENT BY SMT. ROMA TANEJA, WIFE OF THE ASS ESSEE IN HER WEALTH TAX RETURN, THEREFORE, THAT VALUE OF THE JEWELLERY HAS BEEN FULLY EXPLAINED. OUT OF THE BALANCE VALUE OF JEWELLERY FOUND DURING THE SEARCH PROCEEDINGS OF RS.36,87,380/- , A SUM OF RS.10 LAC IS DISCLOSED IN THE HANDS OF T HE APPELLANT AND JEWELLERY VALUING RS.26,87,380/- IS DISCLOSED AS INCOME IN TH E HANDS OF THE ASSESSEES WIFE FOR ASSESSMENT YEAR 2006-07. IN SUPPORT THERE OF, A QUANTITATIVE/VALUE ANALYSIS AND RECONCILIATION OF JEWELLERY AS PER DEP ARTMENTAL VALUERS REPORT AT THE TIME OF SEARCH AND AS DISCLOSED BY THE WIFE OF THE ASSESSEE IN HER WEALTH TAX RETURN ON THE BASIS OF GOVERNMENT VALUERS REPORT W AS FILED. IT WAS SUBMITTED THAT THE ASSESSING OFFICER WAS WRONG IN MAKING ADDITION TO THAT EXTENT. FINDING SUBSTANCE IN THE CONTENTION OF THE ASSESSEE, LD. CI T (A) OBSERVED THAT ASSESSEES WIFE IN HER WEALTH TAX RETURN FOR ASSESS MENT YEAR 1992-93 HAD DISCLOSED JEWELLERY WORTH RS.8,33,475/- AND THE SAI D ASSESSMENT WAS ALSO COMPLETED U/S 16(3) OF THE WEALTH-TAX ACT AT A TOTA L WEALTH OF RS.10,36,800/- AND SUCH FACT WAS ALSO BROUGHT TO THE NOTICE OF THE ASS TT. DIRECTOR OF INVESTIGATION ON 6 TH FEBRUARY, 2006 BY ENCLOSING COPIES OF WEALTH-TAX R ETURN, COMPUTATION OF TOTAL WEALTH AND ASSESSMENT ORDER PASSED U/S 16(3) BY THE WEALTH TAX OFFICER. THESE FACTS WERE ALSO BROUGHT TO THE NOTICE OF ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THESE FACTS WERE IGNORED BY THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT. IT HAS BEEN OBSERVED BY THE CIT (A) THAT ADDITION CANNOT BE MADE PURELY ON THE BASIS OF STATEMENT WHE N SUCH STATEMENT WAS MADE WITHOUT THE BENEFITS OF RECORD ON HAND. IT IS FURTHER OBSERVED BY THE CIT (A) THAT ASSESSEE HAD CATEGORICALLY STATED THAT HE RESE RVES HIS RIGHT TO MODIFY THE STATEMENT IN RESPECT OF SURRENDERED INCOME THEREBY IT MEANS THAT ASSESSEE WAS KEEPING THE OPTION OF VERIFICATION OF THE RECORDS B EFORE FINALLY SURRENDERING THE TRUE AND FULL UNDISCLOSED INCOME TO THE DEPARTMENT. IT IS A CASE WHERE ASSESSEE IS ABLE TO ESTABLISH THE FACT OF EXISTENCE OF PART OF JEWELLERY AS DISCLOSED TO THE DEPARTMENT IN THE HANDS OF HIS WIFE. THE LD. CIT ( A) HAS ALSO OBSERVED THAT THE ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 7 ASSESSEE COULD ESTABLISH THAT SUFFICIENT EVIDENCE A BOUT THE OWNERSHIP OF THE JEWELLERY BY HIS WIFE. THEREFORE, NO ADVERSE VIEW COULD BE TAKEN TO SAY THAT PART OF THE JEWELLERY WAS UNEXPLAINED. IT IS IN THIS MA NNER, THE LD. CIT (A) HAS DELETED THE ADDITION AGAINST WHICH THE DEPARTMENT IS AGGRIE VED. HOWEVER, THE LD. CIT (A) HAS SUSTAINED THE ADDITION OF RS.31,211/- ON AC COUNT OF UNEXPLAINED CASH WHICH WAS EXPLAINED BY THE ASSESSEE THAT IT WAS REC ORDED IN THE CASH BOOK. THIS CONTENTION OF THE ASSESSEE IS REJECTED BY THE CIT ( A) ON THE GROUND THAT THE ASSESSEES BUSINESS IS BEING OPERATED IN CHANDNI CH OWK WHERE ALL BUSINESS ASSETS AND BOOKS ARE LOCATED AND EVEN THE PERUSAL O F THE CASH BOOK DOES NOT SUBSTANTIATE THE CONTENTION OF THE ASSESSEE THAT IT IS PART OF BUSINESS. THEREFORE, NO BENEFIT COULD BE GIVEN WITH RESPECT TO CASH FOUN D AT RESIDENCE AS BUSINESS ASSET OF THE ASSESSEE. 8. SO AS IT RELATES TO ADDITION WITH REGARD TO LOW GP RATE, THE CIT (A) HAS OBSERVED THAT THERE IS NO DOUBT THAT LOW GP IS THER E DURING THE YEAR UNDER CONSIDERATION, BUT WITHOUT REJECTING THE BOOKS OF A CCOUNT THE GROSS PROFIT COULD NOT BE ESTIMATED. IT IS OBSERVED THAT UNLESS THE B OOKS OF ACCOUNT ARE FOUND DEFECTIVE ON ACCOUNT OF DISCREPANCIES IN THE OPENIN G STOCK, PURCHASES, SALES, CLOSING STOCK AND OTHER TRADING EXPENSES, THE QUEST ION OF REJECTION OF BOOKS OF ACCOUNT WOULD NOT ARISE. THE CIT (A) FURTHER OBSE RVED THAT ABSENCE OF ANY OTHER SOURCE OF INCOME WHICH CAN GENERATE SUCH QUANTUM OF INCOME THE EXISTENCE OF UNACCOUNTED CASH AND JEWELLERY IS TO BE LINKED TO T HE BUSINESS OF HING , ETC. BY INCLUDING THIS VALUE OF JEWELLERY AND CASH TO THE P ROFITS DECLARED BY THE ASSESSEE, THE PROFIT MARGIN IS SUBSTANTIALLY HIGH. THE CIT ( A) FURTHER OBSERVED THAT POSSIBILITY OF DEEMING THE PERSONAL EXPENSES ON ACC OUNT OF TELEPHONE, CAR USAGE, ETC. IS NOT RULED OUT OF BUSINESS EXPENDITUR E, THEREFORE, HE SUSTAINED THE ADDITION ON ACCOUNT OF PERSONAL USER AT A SUM OF RS .50,000/- AS AGAINST ADDITION OF RS.10,95,090/- MADE ON ACCOUNT OF LOW GP RATE. 9. IT IS BECAUSE OF THESE DELETIONS, THE DEPARTMENT HAS RAISED THE ABOVE MENTIONED GROUNDS AND THE ASSESSEE IN HIS CROSS OBJ ECTION HAS OBJECTED TO THE ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 8 SUSTAINED ADDITION OF RS.31,211/- ON ACCOUNT OF UNE XPLAINED CASH AND RS.50,000/- SUSTAINED DISALLOWANCE IN RESPECT OF PE RSONAL USER OUT OF GP ADDITION. 10. IT WAS VEHEMENTLY PLEADED BY LD. DR THAT THE AS SESSEE DID NOT DISCLOSE THE FULL AMOUNT IN THE RETURN FILED BY HIM. THEREF ORE, THE ASSESSING OFFICER WAS RIGHT IN MAKING THE ADDITION ON ACCOUNT OF JEWELLER Y AND UNEXPLAINED CASH. THE LD. CIT (A) HAS WRONGLY DELETED THE PART OF THE SAM E. SHE FURTHER SUBMITTED THAT THE GP SHOWN BY THE ASSESSEE WAS VERY MUCH LOW AS C OMPARED TO EARLIER YEARS, THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN MAKIN G THE ADDITION AND THE CIT (A) WAS WRONG IN SUSTAINING THE DISALLOWANCE ONLY TO TH E EXTENT OF RS.50,000/-. 11. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR T HAT THE ASSESSEE CLAIMED SET OFF OF JEWELLERY SHOWN IN THE WEALTH TAX RETURN BY THE WIFE OF THE ASSESSEE FOR WHICH THE NECESSARY EVIDENCE WAS FILED BEFORE THE A SSESSING OFFICER AND CIT (A). IT WAS SUBMITTED THAT EVEN ITEM-WISE TALLY WA S ALSO SUBMITTED AND THE ASSESSING OFFICER IGNORED THE SUBMISSIONS OF THE AS SESSEE AND THE CIT (A) HAS RIGHTLY APPRECIATED THE FACTS AND HAS DELETED THE A DDITION. SO AS IT RELATES TO UNEXPLAINED CASH, IT WAS SUBMITTED THAT IS PART OF CASH BOOK AND CASH IN HAND AND, THEREFORE, THE CIT (A) WAS WRONG IN SUSTAINING THE ADDITION TO THAT EXTENT. IT WAS FURTHER SUBMITTED THAT NO DEFECT WHATSOEVER WAS POINTED OUT BY THE ASSESSING OFFICER IN THE MAINTENANCE OF BOOKS OF AC COUNT AND THIS POSITION HAS RIGHTLY BEEN APPRECIATED BY THE CIT (A) AND, THUS, HE HAS RIGHTLY OBSERVED THAT IN THE ABSENCE OF REJECTION OF BOOK RESULTS AND IN THE ABSENCE OF ANY DEFECT FOUND IN THE BOOKS OF ACCOUNT, THE BOOK RESULTS COULD NOT BE REJECTED AND NO ADDITION COULD BE MADE ON ACCOUNT OF LOW GP. MOREOVER, THE LOWER GP, IF ANY, WAS TAKEN CARE OF BY THE DISCLOSURE MADE BY THE ASSESSE E. IT WAS SUBMITTED THAT RETENTION OF ADDITION OF RS.50,000/- ON ACCOUNT OF PERSONAL USER IS ALSO NOT CORRECT AS ASSESSEE HIMSELF HAS DISALLOWED AN AMOUN T OF RS.38,806/- ON ACCOUNT OF CAR EXPENSES ON ACCOUNT OF PERSONAL USE. THUS, IT WAS SUBMITTED THAT ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 9 DEPARTMENTAL GROUND SHOULD BE DISMISSED AND GROUNDS RAISED IN CROSS OBJECTION FILED BY THE ASSESSEE SHOULD BE ALLOWED. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. SO AS IT RELATES TO SET OFF OF DISCLOSURE TO THE EXTENT OF JEWELLERY DECLARED BY THE ASSESSEES WIFE IN HER WE ALTH TAX RETURN, WE FIND THAT THE CIT (A) HAS GIVEN A FINDING THAT TO THAT EXTENT THE ASSESSEE WAS ENTITLED TO GET SET OFF PARTICULARLY KEEPING IN VIEW THE STATEM ENT OF THE ASSESSEE WHEREBY HE HAD RESERVED HIS RIGHT TO REVISE THE STATEMENT IN R ESPECT OF SURRENDERED INCOME. WE HAVE GONE THROUGH THE STATEMENT, A COPY OF WHICH IS ENCLOSED AT PAGES 8-9 OF THE PAPER BOOK. IN ANSWER TO QUESTION NO.3 WHIC H WAS POSED TO THE ASSESSEE AS DO YOU WANT TO ADD ANYTHING TO WHAT HAS BEEN ST ATED ABOVE?, THE ASSESSEE GAVE THE FOLLOWING ANSWER: I RESERVE THE RIGHT TO REVISE THE FIGURE OF SURRENDER AMOUNT. THUS, THE SURRENDER MADE BY THE ASSESSEE OF A SUM OF RS.65,83,400/- IN THE HANDS OF THE ASSESSEE AND HIS WIFE WAS SUBJE CT MATTER OF RIGHT TO REVISE THE FIGURE. THE ASSESSEE WITH THE HELP OF DOCUMENTARY EVIDENCE HAS BEEN ABLE TO ESTABLISH THAT TO THAT EXTENT THE JEWELLERY WAS ASS ESSED IN WEALTH TAX RETURN WAS REQUIRED TO SET OFF AGAINST THE JEWELLERY FOUND DUR ING THE SEARCH. LD. CIT (A) AFTER APPRECIATING THE EVIDENCE PLACED ON RECORD, HAS COM E TO THE CONCLUSION THAT SAID CLAIM OF THE ASSESSEE COULD NOT BE DENIED. NO MATE RIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE JEWELLERY SH OWN IN THE WEALTH TAX RETURNS WAS DISPOSED OF BY THE ASSESSEE BEFORE THE SEARCH. IN THIS VIEW OF THE SITUATION, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) VI DE WHICH ADDITION ON ACCOUNT OF JEWELLERY TO THE EXTENT SHOWN IN THE WEALTH TAX RET URN HAS BEEN DELETED. SO AS IT RELATES TO SET OFF OF CASH IN HAND OF RS.31,211/-, IT IS OBSERVED THAT THE ADDITION TO THIS EXTENT HAS WRONGLY BEEN UPHELD BY THE CIT (A) AS EVEN IF THE BUSINESS IS OPERATED SOMEWHERE ELSE, THE CASH CAN BE FOUND AT T HE RESIDENCE OF THE OWNER AS THAT COULD BE CARRIED FOR THE PURPOSE OF SAFETY EVEN. IF THE ASSESSEE IS ABLE TO ESTABLISH THAT SUCH WAS THE CASE AND IT BELONGS TO THE BUSINESS CARRIED ON BY HIM, THEN THE SET OFF OF THE SAME WAS REQUIRED TO B E GIVEN. MOREOVER, THE DISCLOSURE MADE BY THE ASSESSEE CAN COVER SUCH PART ICULAR AMOUNT. IN THIS VIEW ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 10 OF THE SITUATION, WE SEE NO JUSTIFICATION IN UPHOLD ING THE ADDITION OF RS.31,211/-. THE SAME IS DELETED. 13. NOW, COMING TO THE ADDITION MADE ON ACCOUNT OF GP, THE LD. CIT (A) HAS CORRECTLY APPRECIATED THAT BOOKS OF ACCOUNT WERE NO T REJECTED AND NO DISCREPANCY WHATSOEVER WAS FOUND IN THE BOOKS OF AC COUNT EXCEPT FINDING THAT GP FOR THE YEAR UNDER CONSIDERATION WAS MUCH LOWER THAN THE EARLIER YEAR. LOWER GP CAN BE INDICATOR OF DEFECT IN THE BOOKS OF ACCOUNT AND FOR MAKING ADDITION IT HAS TO BE FOUND OUT THAT THERE ARE SOME DEFECTS IN THE BOOKS OF ACCOUNT IN RECORDING SALES, PURCHASES AND RECORDING THE EXPENSES, ETC., BUT THERE IS NO MATERIAL ON RECORD TO SHOW THAT ANY DIS CREPANCY WHATSOEVER WAS FOUND BY THE ASSESSING OFFICER TO REJECT THE BOOK R ESULTS OF THE ASSESSEE. ON THE OTHER HAND, ASSESSEE HAD SUBMITTED THAT HIS SALES H AVE BEEN ACCEPTED BY THE SALES-TAX DEPARTMENT AND ALL THE PURCHASES MADE THR OUGH IMPORT ARE ALSO SUPPORTED BY THE DOCUMENTS. MOREOVER, IT HAS ALSO BEEN THE SUBMISSION OF THE ASSESSEE THAT THE LOWER GP CAN ALSO BE SEEN IN THE LIGHT OF THE DISCLOSURE MADE BY THE ASSESSEE. KEEPING IN VIEW ALL THESE FACTS, WE ARE OF THE OPINION THAT THE CIT (A) WAS RIGHT IN HOLDING THAT THE ADDITION ON A CCOUNT OF LOWER GP COULD NOT BE MADE. WE UPHOLD HIS FINDING ON THIS ISSUE. 14. SO AS IT RELATES TO SUSTENANCE OF ADDITION OF R S.50,000/- ON ACCOUNT OF PERSONAL USER, IT MAY BE MENTIONED THAT IT WAS NOT EVEN THE CASE OF ASSESSING OFFICER THAT SUCH ADDITION WAS CALLED FOR ON ACCOUN T OF PERSONAL USER BY THE ASSESSEE OF THE BUSINESS ASSETS. MOREOVER, IN THE GROUNDS OF APPEAL, IT HAS BEEN STATED BY THE ASSESSEE THAT THE ASSESSEE HIMSE LF HAS MADE CERTAIN DISALLOWANCE ON ACCOUNT OF PERSONAL USER OF CAR, ET C. KEEPING IN VIEW THESE FACTS, WE ARE OF THE OPINION THAT ADDITION OF RS.50 ,000/- SUSTAINED BY THE CIT (A) IS NOT CORRECT AND THE SAME IS DELETED. 15. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL FIL ED BY THE REV IS DISMISSED AND CROSS OBJECTIONS FILED BY THE ASSESSEE IS ACCEP TED. ITA NOS.1033 & 1034/DEL/2009 C.O. NOS.227 & 228/DEL/2009 11 ASSESSMENT YEAR 2005-06 . 16. THE ISSUE RAISED IN DEPARTMENTAL APPEAL IS SAME AS IS FOR ASSESSMENT YEAR 2006-07 I.E., APPLICATION OF GP RATE AND SUSTE NANCE OF ADDITION OF RS.50,000/- AGAINST THAT. IN VIEW OF THE DECISION TAKEN BY US FOR ASSESSMENT YEAR 2006-07, AS THE FACTS ARE SIMILAR, WE DISMISS THE DEPARTMENTAL APPEAL AND ALLOW THE CROSS OBJECTIONS FILED BY THE ASSESSEE. 17. IN THE RESULT, THE DEPARTMENTAL APPEALS ARE DIS MISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. . 18. THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.11 .2009. [G.E. VEERABHADRAPPA] [I.P. BANSAL] VICE PRESIDENT JUDICIAL MEMBER DATED, 13.11.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES
