Sh. Mahender Kumar, Panipat V. DCIT, Haryana

ITA 2327/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7946 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Retraction; TDS
• Section: 40A(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA.NO.2327/DEL./2017 ASSESSMENT YEAR 2011-2012 SHRI MAHENDER KUMAR, PROP. POOJA CARPETS, PLOT NO.55, SECTOR-25, PART-II, HUDA, PANIPAT HARYANA. PAN AFKPM0604F VS., THE DCIT, CIRCLE 1, PANIPAT. HARYANA. (APP E L L ANT) (RESPONDENT) FOR ASSESSEE : - NONE - FOR REVENUE : MS. RAKHI VIMAL, SR. DR DATE OF HEARING : 21 .0 1 .20 20 DATE OF PRONOUNCEMENT : 24 .0 1 .20 20 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), KARNAL, DATED 02.02.2017 FOR THE A.Y. 2011-2012. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVE OF THE DEPARTMENT AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 2 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. 3. THE ASSESSEE HAS BEEN NOTIFIED THE DATE OF HEARING TWICE THROUGH REGISTERED POST. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE SERVICE OF THE NOTICE. APPEAL IS, THEREFORE, DECIDED IN THE ABSENCE OF THE ASSESSEE. 4. ON GROUND NO.1, ASSESSEE CHALLENGED THE ORDERS OF THE AUTHORITIES BELOW IN MAKING THE ADDITION OF RS.40 LAKHS I.E., [ RS.26,50,000/- + RS.8,50,000/- + RS.5,00,000/- ] ON THE BASIS OF THE STATEMENT RECORDED DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE I.T. ACT. 4.1. THE LD. CIT(A) IN THE IMPUGNED ORDER CONSIDERED ALL THE THREE ITEMS. THE ADDITION OF RS.26,50,000/- WAS MADE ON ACCOUNT OF UNDISCLOSED STOCK. IT IS NOTED THAT ASSESSES IS INVOLVED IN THE BUSINESS OF MANUFACTURING, TRADING AND JOB WORK OF ALL KINDS OF CARPETS AND MATS. SURVEY UNDER SECTION 133A WAS CONDUCTED ON 20 TH /21 ST JANUARY, 2011 WHEREIN RS.40,00,000/- WAS OFFERED FOR TAXATION ON ACCOUNT OF VARIOUS DISCREPANCIES FOUND IN THE BOOKS OF ACCOUNTS. HOWEVER, WHILE FILING THE RETURN OF INCOME, THIS AMOUNT OF RS.40,00,000/- WAS NOT DISCLOSED. 3 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. THE ASSESSES WAS GIVEN VARIOUS OPPORTUNITIES AT ASSESSMENT STAGE TO EXPLAIN AND PROVIDE DETAILS REGARDING THE DISCREPANCIES DETECTED DURING SURVEY. HOWEVER, NO PROPER EXPLANATIONS HAVE BEEN GIVEN. THE A.O. DISCUSSED THE ISSUE IN DETAIL WITH RESPECT TO DISCREPANCY IN PHYSICAL STOCK FOUND DURING THE COURSE OF SURVEY, FOR WHICH ASSESSEE HAS MADE ABOVE SURRENDER. THE A.O. AFTER CONSIDERING THE DETAILS FOUND THAT ASSESSEE HAS NO EXPLANATION WHATSOEVER AND SINCE ADMITTED THE ADDITION DURING THE COURSE OF SURVEY, THEREFORE, ADDITION SHALL HAVE TO BE MADE IN RESPECT OF UNACCOUNTED STOCK. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE STATEMENT GIVEN BY SHRI NARAYAN SHOULD NOT BE USED AGAINST THE ASSESSES SINCE HE WAS NOT CONNECTED OR LOOKING AFTER DAY TO DAY BUSINESS OR BOOKS OF ACCOUNTS OF THE ASSESSEE. IT WAS SUBMITTED THAT THERE WAS ALSO NO INCRIMINATING MATERIAL OR EVIDENCE DISCOVERED DURING THE COURSE OF SURVEY. IT WAS FURTHER SUBMITTED THAT THE DIFFERENCE IN STOCK POINTED-OUT BY THE ASSESSING OFFICER WAS NOT JUSTIFIED SINCE THE JOB WORK MATERIAL HAD NOT BEEN CONSIDERED PROPERLY. IT WAS FURTHER ARGUED THAT THE ASSESSEE 4 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. HAD BEEN DOING JOB WORK FOR DIFFERENT CLIENTS AND THE RECORD OF TDS CLEARLY INDICATED THAT JOB WORK WAS BEING CARRIED- OUT, FOR WHICH, ADDITIONAL STOCK WAS FOUND IN THE PREMISES OF THE ASSESSEE. THE LD. CIT(A) HAS NOTED THAT THE ASSESSING OFFICER HAS MADE THIS ADDITION BY RELYING UPON THE STATEMENT OF MR. NARAYAN, BROTHER OF THE ASSESSEE RECORDED ON THE DATE OF THE SURVEY. THE AO HAS ALSO CLEARLY POINTED- OUT THAT THE EXCESS STOCK COULD NOT BE PROPERLY EXPLAINED AT THE TIME OF SURVEY AND NO SUPPORTING DOCUMENTS WITH REGARD TO JOB WORK WAS EXPLAINED. MR. NARAYAN HAD GIVEN THE STATEMENT ON THE BASIS OF RECORDS AND STOCKS AVAILABLE AT THE TIME OF SURVEY. THE LD. CIT(A) NOTED THAT SINCE NO SUPPORTING DOCUMENTS OR EXPLANATION WAS PROVIDED WITH REGARD TO DISCREPANCY IN STOCK, THEREFORE, ADDITION WAS CORRECTLY MADE. THE LD. CIT(A) ALSO NOTED THAT NO SUPPORTING DOCUMENTS IN RESPECT OF EXCESS STOCK WAS EXPLAINED, THEREFORE, THIS ADDITION WAS CONFIRMED. 5. AS REGARDS ADDITION OF RS.5 LAKHS, THE A.O. MADE THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IN CONSTRUCTION OF BUILDING AND RS.8,50,000/- ON ACCOUNT OF 5 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. UNEXPLAINED CASH FOUND DURING SURVEY ACTION. IT IS NOTED THAT ASSESSEE ALSO MADE SURRENDER OF THESE AMOUNTS. THE A.O. HAS EMPHASIZED THAT THE AMOUNT SURRENDERED BY SHRI NARAYAN WAS CONFIRMED BY SHRI SANJAY SHARMA AND SHRI GURINDER SINGH. THE A.O. HAS FURTHER OBSERVED THAT THERE WAS NO JUSTIFICATION FOR SUBSEQUENT RETRACTION BY THE ASSESSEE REGARDING THE AMOUNTS OF RS.5,00,000/- AND RS.8,50,000/-, FOR WHICH NO SUPPORTING DOCUMENTS HAVE BEEN FILED. THE ASSESSEE SUBMITTED THAT CASH WAS RECEIVED BY ASSESSEE FROM HIS FATHER, THEREFORE, CASH OF RS.8,50,000/- IS FULLY EXPLAINED. WITH REGARD TO ADDITION OF RS.5 LAKHS, SINCE NO INCRIMINATING MATERIAL WAS FOUND, THEREFORE, ADDITION IS UNJUSTIFIED. THE LD. CIT(A) NOTED THAT ASSESSEE DID NOT EXPLAIN BOTH THE ISSUES WITH REGARD TO UNEXPLAINED INVESTMENT AND CASH SURRENDERED DURING THE COURSE OF SURVEY. THE ASSESSEE MERELY EXPLAINED THAT CASH GIFT WAS RECEIVED FROM HIS FATHER, WHICH WAS FOUND TO BE AN AFTERTHOUGHT BECAUSE IT IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES. THE LD. CIT(A) DID NOT ACCEPT RETRACTION OF ASSESSEE WITH REGARD TO UNEXPLAINED 6 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. INVESTMENT IN BUILDING OF RS.5 LAKHS. THEREFORE, THIS ADDITION WAS CONFIRMED. 6. ON GROUND NO.2, THE ASSESSEE CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING DISALLOWANCE OF RS.1,22,372/- ON ACCOUNT OF DISALLOWANCE OF VARIOUS EXPENSES. 7. THE LD. CIT(A) INSTEAD OF 10% RESTRICTED THE DISALLOWANCE TO 5%. THE A.O. ON THESE EXPENSES NOTED THAT SINCE PAYMENTS ARE MOSTLY MADE IN CASH AND VOUCHERS ARE NOT FULLY VERIFIABLE AND ELEMENT OF PERSONAL USE COULD NOT BE RULED-OUT, THEREFORE, ADDITION WAS MADE. 8. ON GROUND NO.3, ASSESSEE CHALLENGED THE DISALLOWANCE OF RS.21,500/- 8.1. THE A.O. MADE DISALLOWANCE OF THIS AMOUNT UNDER SECTION 40A(3) OF THE I.T. ACT, 1961. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT AMOUNT WAS SPENT FOR SERVING SWEETS/DIWALI GIFTS TO WORKERS AND STAFF ON THE DAY OF DIWALI, THEREFORE, ADDITION IS UNJUSTIFIED. THE A.O. HAS HOWEVER POINTED-OUT THAT SINGLE PAYMENT WAS MADE ON A 7 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. PARTICULAR DATE IN VIOLATION OF SECTION 40A(3) OF THE I.T. ACT, 1961. NO JUSTIFICATION WAS SHOWN, THEREFORE, LD. CIT(A) ALSO DISMISSED THE APPEAL OF ASSESSEE. 9. THE LD. D.R. CONTENDED THAT A.O. HAS GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ALL THESE ISSUES, BUT, THESE ISSUES HAVE NOT BEEN EXPLAINED. THEREFORE, AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ADDITION. 10. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R, WE ARE OF THE VIEW THAT NO INTERFERENCE IS REQUIRED IN THE MATTER. THE AUTHORITIES BELOW HAVE GIVEN SPECIFIC FINDING OF FACT AGAINST THE ASSESSEE ON EACH ISSUE. THE ASSESSEE WAS GIVEN SEVERAL OPPORTUNITIES TO EXPLAIN ALL THE ABOVE THREE ISSUES, BUT, ASSESSEE DID NOT EXPLAIN THE SAME. THE ASSESSEE MADE SURRENDER OF RS.40 LAKHS DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE I.T. ACT BASED ON THE MATERIAL FOUND DURING THE COURSE OF SURVEY. DURING THE COURSE OF SURVEY, EXCESS STOCK WAS FOUND, WHICH, ASSESSEE FAILED TO RECONCILE. NO SUPPORTING DOCUMENTS WERE FILED TO RECONCILE THE DIFFERENCE IN STOCK, CASH AND OTHER ITEMS. THE ASSESSEE ALSO DID NOT PUT IN APPEARANCE BEFORE THE TRIBUNAL, 8 ITA.NO.2327/DEL./2017 SHRI MAHENDER KUMAR, PANIPAT, HARYANA. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE ON RECORD, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 24 TH JANUARY, 2020 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR, ITAT, DELHI BENCHES, DELHI.