M/s Kotibhaskar Balgurgi Associates, Sangli V. ITO, Ward 1(2),Sangli, Sangli

ITA 2319/PUN/2012

• Counselvise Citation: 231924514 RSA 2012
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 23-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SARANGI
• Section: 143(3); 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.2319/PN/2012 (ASSESSMENT YEAR : 2009-10) M/S KOTIBHASKAR BALGURGI ASSOCIATES SANGLI 43, SHRIRAM PLAZA, RAM MANDIR CHOWK, SANGLI 416 416 PAN : AAFFK4494F . APPELLANT VS. INCOME TAX OFFICER, WARD 1 (2), SANGLI . RESPONDENT APPELLANT BY : MR. C. H. NANIWADEKAR RESPONDENT BY : MR. S. C. SARANGI DATE OF HEARING : 23-09-2013 DATE OF PRONOUNCEMENT : 30-09-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 14.09.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 28.12.2011 PAS SED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE ONLY DISPUTE RAISED BY THE A SSESSEE IS WITH REGARD TO AN ADDITION OF RS.2,02,520/- MADE BY THE INCOME-TAX AUTHORITIES ON ACCOUNT OF EXCESS CASH FOUND DURING THE COURSE OF A SURVEY ACT ION UNDER SECTION 133A OF THE ACT ON 19 TH /20 TH SEPTEMBER, 2008. 3. IN BRIEF, THE FACTS ARE THAT ASSESSEE IS A PARTN ERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS AND DEVELOPERS. A SURVEY ACTI ON UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF T HE ASSESSEE ON 19 TH /20 TH ITA NO.2319/PN/2012 A.Y. 2009-10 SEPTEMBER, 2008. IN THE COURSE OF SURVEY, A STATEME NT OF THE ASSESSEES PARTNER, SHRI CHIDAMBAR S. KOTIBHASKAR WAS ALSO REC ORDED. AT THE TIME OF SURVEY, A POCKET DIARY BELONGING TO THE ASSESSEE FI RM WAS FOUND WHICH REFLECTED CERTAIN SALE PROCEEDS OF FLATS/SHOPS PURP ORTED TO HAVE BEEN RECEIVED BY THE ASSESSEE IN CASH BUT NOT FOUND RECORDED IN T HE REGULARLY MAINTAINED CASH BOOKS/LEDGERS. THE SAID ENTRIES PERTAINED TO T HE PERIOD RELATING TO THE ASSESSMENT YEARS 2007-08 AND 2008-09 AMOUNTING TO R S.1,01,405 AND RS.2,02,105/- RESPECTIVELY. THE ASSESSEE DEPOSED IN THE STATEMENT RECORDED AT THE TIME OF SURVEY THAT SUCH UNRECORDED SALE PRO CEEDS WOULD BE DECLARED AS ADDITIONAL INCOME FOR ASSESSMENT YEARS 2007-08 A ND 2008-09. ACCORDINGLY, THE ASSESSEE-FIRM DULY REVISED ITS RETURNS OF INCOM E FOR ASSESSMENT YEARS 2007-08 AND 2008-09 IN WHICH IT OFFERED THE ABOVE A DDITIONAL INCOME OF RS.1,01,405/- AND RS. 2,02,105/- RESPECTIVELY. ON T HIS ASPECT, THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE. 4. HOWEVER, THE BONE OF CONTENTION IS THE ANSWER GI VEN BY THE ASSESSEE IN RESPONSE TO QUESTION NO. 9 WHICH RELATES TO A DISCR EPANCY IN CASH FOUND AS ON THE DATE OF SURVEY. THE RELEVANT QUESTION NO. 9 AND ITS ANSWER, READS AS UNDER :- Q. NO. 9 - DURING THE COURSE OF SURVEY ACTION IN THE BUSINESS PREMISES OF THE AFORESAID FIRM, THE INVENTORY OF CA SH WAS MADE. CASH WORTH RS.2,86,623/- HAS BEEN FOUND AND INVENTORISED. IT I S, HOWEVER, SEEN FROM THE CASH-BOOK WRITTEN TILL 21.07.2008 THAT CLOSING CASH BALANCE IN THE FIRM AS ON 19.09.2008 WAS RS.84,103/-. THERE IS, THEREFORE, DI SCREPANCY OF RS.2,02,520/- WHICH WAS THE EXCESS CASH FOUND IN RESPECT OF THE A FORESAID FIRM IN THE BUSINESS PREMISES. HOW DO YOU WANT TO EXPLAIN THE A FORESAID CASH ? ANSWER - AS HAS BEEN STATED ABOVE, CERTAIN AMOUNTS OF CASH COMPONENTS WERE RECEIVED FROM SOME PARTIES. CERTAIN AMOUNTS HAVE ALSO BEEN INCURRED AS EXPENSES FROM THE AFORESAID AMOUNT SO RECEIVED. THIS EXCESS CASH OF RS.2,02,520/- HAS BEEN RECEIVED OUT OF UNACCOUNTED TRANSACTION AND IS NOT REFLECTED IN THE REGULAR CAS H-BOOK MAINTAINED BY THE FIRM. I, ON BEHALF OF THE FIRM STATE THAT AFORESAID AMOUNT OF RS.2,02,520/- WOULD BE DISCLOSED DURING THE F.Y. 2008-09 RELEVANT TO A. Y. 2009-10 AS ADDITIONAL INCOME OVER AND ABOVE THE REGULAR INCOME U/S 69 OF THE I.T. ACT, 1961 FOR THE ITA NO.2319/PN/2012 A.Y. 2009-10 SAID ASSESSMENT YEAR. I ALSO PROMISE ON BEHALF OF T HE PARTNERS THAT TAX ON THE SAID AMOUNT WOULD BE PAID BEFORE FILING THE RETURN OF INCOME FOR THE A.Y. 2009-10. 5. IN TERMS OF AFORESAID, IT TRANSPIRES THAT AT THE TIME OF SURVEY, ASSESSEE FIRM AGREED THAT FOR ASSESSMENT YEAR 2009-10, I.E. THE ASSESSMENT YEAR UNDER CONSIDERATION, IT WOULD DISCLOSE THE EXCESS CASH FO UND OF RS.2,02,520/- AS ADDITIONAL INCOME OVER AND ABOVE THE REGULAR INCOME FOR THE SAID ASSESSMENT YEAR. 6. IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2009-10 AFTER THE SURVEY, IT WAS FOUND THAT NO SUCH INCOME WAS DECLAR ED AND INSTEAD ASSESSEE CANVASSED THAT THE UNRECORDED SALE RECEIPTS FOUND I N THE DIARY FOR ASSESSMENT YEAR 2007-08 AND 2008-09 WHICH WERE OFFERED AS ADDI TIONAL INCOME IN THE SAID RESPECTIVE ASSESSMENT YEARS, WERE AVAILABLE ON THE DATE OF SURVEY TO EXPLAIN THE DISCREPANCY OF RS.2,02,520/- NOTICED ON ACCOUNT OF EXCESS CASH. THE SAID PLEA OF THE ASSESSEE HAS NOT BEEN ACCEPTED BY THE A SSESSING OFFICER PRIMARILY ON THE GROUND THAT THE ASSESSEE HAD DISCLOSED THE S AID INCOME VOLUNTARILY IN THE STATEMENT RECORDED AT THE TIME OF SURVEY. THE R ETRACTION OF THE STATEMENT BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASS ESSING OFFICER AND HE MADE AN ADDITION OF RS.2,02,520/- TO THE RETURNED I NCOME. THE CIT(A) HAS ALSO SUSTAINED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT THERE WAS NO EVIDENCE LEAD BY THE ASSESSEE TO SHOW THAT THE A DDITIONAL AMOUNTS DECLARED IN THE ASSESSMENT YEARS 2007-08 AND 2008-0 9 TOTALING TO RS.3,03,510/- WERE AVAILABLE WITH THE ASSESSEE IN T HE IMPUGNED ASSESSMENT YEAR. AGAINST THE AFORESAID DECISION OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT APART FROM THE ADMISSION OF ADDITIONAL INCOME MADE BY THE ASSESSEE BY WAY OF QUESTION NO. 9 AT THE TIME OF SURVEY THERE WAS N O EVIDENCE TO SHOW THAT THE ITA NO.2319/PN/2012 A.Y. 2009-10 ASSESSEE WAS IN RECEIPT OF ANY UNACCOUNTED CASH IN THE YEAR UNDER CONSIDERATION. THEREFORE, THE ADMISSION MADE AT THE TIME OF SURVEY FOR ASSESSMENT YEAR 2009-10 PERTAINING TO THE EXCESS CA SH OF RS. 2,02,520/- WAS MADE UNDER A MISTAKEN BELIEF OF LAW AND FACT INASMU CH AS ONCE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON ACCOUNT OF UNACCOUNTED CASH RECEIPTS AMOUNTING TO RS.3,03,510/- FOR THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS OF 2007- 08 AND 2008-09, SAME AMOUNT CAN BE SAID TO HAVE BEE N AVAILABLE WITH THE ASSESSEE AND THE SAME CLEARLY EXPLAINS THE EXCESS C ASH OF RS.2,02,520/- FOUND AT THE TIME OF SURVEY. 8. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE ORDERS OF THE LOWE R AUTHORITIES BELOW BY POINTING OUT THAT THE ASSESSEE HAD ADMITTED TO SUCH ADDITION AND THE ONUS WAS ON THE ASSESSEE TO SHOW THAT THE ADMISSION WAS FACT UALLY OR LEGALLY WRONG. IN THE PRESENT CASE, ACCORDING TO THE LEARNED DEPARTME NTAL REPRESENTATIVE, THE ASSESSEE HAD NOT DISCHARGED THE BURDEN THAT LAY ON HIM TO PROVE THE SOURCE OF THE EXCESS CASH AT THE TIME OF SURVEY AMOUNTING TO RS.2,02,520/-. THUS, ACCORDING TO HIM, THE ADDITION HAS BEEN RIGHTLY MAD E. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE FACTUAL MATRIX IS TO THE EFFECT THAT AT THE TIME OF SURVEY ON 19 TH /20 TH SEPTEMBER, 2008 CASH OF RS.2,86,623/- WAS FOUND WHEREAS IT WAS SEEN FROM TH E CASH BOOK WRITTEN TILL 21.07.2008 THAT CLOSING CASH BALANCE AS ON 19 TH /20 TH SEPTEMBER, 2008 WAS RS.84,103/-, RESULTING IN A DISCREPANCY OF EXCESS C ASH OF RS.2,02,520/-. AS NOTED EARLIER, IN RESPONSE TO QUESTION NO. 9 WITH R ESPECT TO THE SAID EXCESS CASH, ASSESSEE AGREED TO DISCLOSE ADDITIONAL INCOME TO THE EXTENT OF RS.2,02,520/- OVER AND ABOVE THE REGULAR INCOME FOR THE ASSESSMENT YEAR 2009-10, I.E. THE YEAR UNDER CONSIDERATION. HOWEVER , SUCH ADDITIONAL INCOME WAS NOT DECLARED IN THE RETURN OF INCOME FILED ON T HE GROUND THAT IN THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS OF 2007- 08 AND 2008-09, ITA NO.2319/PN/2012 A.Y. 2009-10 ASSESSEE HAD DECLARED ADDITIONAL INCOME ON ACCOUNT OF UNACCOUNTED SALE PROCEEDS RECEIVED IN CASH AMOUNTING TO RS.3,03,510/ - WHICH COULD BE SAID TO BE AVAILABLE WITH THE ASSESSEE SO AS TO EXPLAIN THE EXCESS CASH FOUND AT THE TIME OF SURVEY ON 19 TH /20 TH SEPTEMBER, 2008. THE CASE OF THE ASSESSEE HAS BEEN SHUT-OUT BY THE LOWER AUTHORITIES PRIMARILY ON THE GROUND THAT ASSESSEE VOLUNTARILY ADMITTED TO THE ADDITIONAL INCOME FOR T HE ASSESSMENT YEAR 2009-10 DURING THE COURSE OF SURVEY ACTION. 10. IN OUR CONSIDERED OPINION, IT IS AN ADMITTED PO SITION OF LAW THAT AN ADMISSION MADE DURING SURVEY UNDER SECTION 133A OF THE ACT CANNOT BE TREATED AS A CONCLUSIVE EVIDENCE TO JUSTIFY AN ADDI TION, ESPECIALLY IN A CASE WHERE THERE IS NO CORROBORATIVE EVIDENCE TO SUPPORT THE ADMISSION. IN THE PRESENT CASE, IT IS PERTINENT TO OBSERVE THAT SO FA R AS THE ADMISSION OF ADDITIONAL INCOME MADE BY THE ASSESSEE FOR ASSESSME NT YEARS 2007-08 AND 2008-09 IS CONCERNED, SUCH ADMISSION WAS NOT ONLY M ADE VOLUNTARILY BUT WAS BASED ON A DIARY FOUND AT THE TIME OF SURVEY WHICH RECORDED SUCH UNACCOUNTED RECEIPT OF SALE PROCEEDS IN CASH. PERTI NENTLY, THE ADMISSION FOR DECLARATION OF ADDITIONAL INCOME ON ACCOUNT OF EXCE SS CASH IN THE INSTANT ASSESSMENT YEAR IS NOT CORROBORATED BY THE KIND OF EVIDENCE THAT WAS AVAILABLE/FOUND AT THE TIME OF SURVEY IN RELATION T O THE EARLIER TWO ASSESSMENT YEARS 2007-08 AND 2008-09. 11. APART THEREFROM, ANOTHER PLEA OF THE ASSESSEE I S THAT THE EXCESS CASH FOUND AT THE TIME OF SURVEY REPRESENTED THE ADDITIO NAL INCOME BY WAY OF UNRECORDED CASH SALE PROCEEDS DECLARED FOR THE IMME DIATELY TWO PRECEDING ASSESSMENT YEARS OF 2007-08 AND 2008-09 AMOUNTING T O RS.3,03,510/-. NO DOUBT A PRESUMPTION THAT THE EXCESS CASH FOUND AT T HE TIME OF SURVEY REPRESENTED THE ADDITIONAL INCOME OFFERED IN THE PR ECEDING YEARS CANNOT BE DRAWN IF A SUFFICIENT LONG PERIOD OF TIME HAS ELAPS ED AFTER THE EARNING OF THE PAST UNDISCLOSED INCOME SO, HOWEVER, IN THE PRESENT CASE THE ADDITIONAL ITA NO.2319/PN/2012 A.Y. 2009-10 AMOUNT TAXED IN PRIOR YEARS, IS IN CLOSE PROXIMITY TO THE INSTANT ASSESSMENT YEAR AND THEREFORE IN OUR VIEW, THE PLEA OF THE ASS ESSEE IS PLAUSIBLE. MOREOVER, THERE IS NO EVIDENCE ON RECORD TO SHOW TH AT THE AMOUNT REFLECTED BY ADDITIONAL INCOME DECLARED FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 HAS BEEN SPENT BY THE ASSESSEE PRIOR TO THE DISCOVE RY OF EXCESS CASH ON THE DATE OF SURVEY. 12. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AN D CIRCUMSTANCES OF THE CASE, IN OUR VIEW, THE IMPUGNED ADDITION OF RS.2,02 ,520/- SUSTAINED BY THE CIT(A) IS ON A WRONG PREMISE FOR THE REASONS DISCUS SED IN THE AFORESAID PARAGRAPHS. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET-ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETED THE ADDITI ON OF RS.2,02,520/-. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 30 TH SEPTEMBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE