M/s. Enjoy Chemistry With Yash, Surat V. The ACIT.,Cent.Circle-3, Surat

ITA 2346/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0508 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDAR
• Keywords: Retraction
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCO UNTANT MEMBER M/S ENJOY CHEMISTRY WITH YASH, 2/5175, FARAM MOHALLO, RUSTAMPURA, SURAT (APPELLANT) PAN NO. AABFE4112A VS. ACIT, CENTRAL CIRCLE 3, SURAT (RESPONDENT) REVENUE BY : SRI PRADIP KR. MAJUMDAR, SR. D.R. ASSESSEE BY : SRI MEHUL SHAH, A.R. DATE OF HEARING : 14-02-2013 DATE OF PRONOUNCEMENT : 22-02-2013 / ORDER PER : D.K TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL ARISING OUT FROM THE ORDER OF LD. CIT(A)- II, AHMEDABAD DATED 24/05/2010. 2. THE ASSESSEE HAS TAKEN FOLLOWING TWO EFFECTIVE G ROUNDS OF APPEAL:- ITA NO. 2346/AHD/2010 A.Y.:-2007-08 ITA NO. 2346/AHD/2010 A.Y. 2007-08 PAGE NO M/S ENJOY CHEMISTRY WITH YASH VS. ACIT 2 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER O F ADDITION OF RS. 9,27,900/- ON ACCOUNT OF ALLEGED UNACCOUNTED AMOUNT APPEARING ON A SMALL CHIT. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN GIVING CONSEQUENTIAL DIRECTION INSTEAD OF GIVING SPECIFIC DIRECTION AND THEREBY ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN CHARGING INTEREST U/S 234B AND 234C ON A MOUNT OF RS. 24,00,000/- TILL THE DATE OF ASSESSMENT WHICH WAS A DJUSTED BY ASSESSING OFFICER OUT OF CASH SEIZED IN COURSE OF S EARCH ACTION ON 07.11.2006 FOR WHICH ASSESSEE REQUESTED FOR ADJUSTM ENT OF CASH SEIZED AGAINST TAX LIABILITY VIDE LETTER DATED 24.02.2007 FILED ON 27.02.2007. 3. GROUND NO. 1 RELATES TO ADDITION OF RS. 9,27,900 /- ON ACCOUNT OF AMOUNT APPEARING ON A SMALL CHIT. THE ASSESSING OF FICER HAS MADE ADDITION ON THE GROUND THAT THE ASSESSEE HAS MADE A DISCLOSU RE OF RS. 9,27,900/- ON THE BASIS OF ASSETS IN THE STATEMENT RECORDED U/S 1 32(4) OF THE ACT AND LATER ON RETRACTED WITHOUT ANY EVIDENCE AND EXPLANATION. BEFORE LD. CIT(A) THE ASSESSEES SUBMISSION WAS THAT NOTING OF CASH RECE IPT ON THE SMALL CHIT WAS COVERED BY CASH FOUND AND DECLARED IN THE RETURN OF INCOME. THE ASSESSEE HAS ALREADY OFFERED CASH FOUND DURING THE SEARCH IN HIS RETURN OF INCOME AS ADDITIONAL INCOME. CHIT FOUND DURING THE SEARCH GI VES ONLY BREAK-UP OF PART OF THE CASH FOUND. THUS, ASSESSEE HAS NOT OFFERED AMOUNT MENTIONED ON CHIT FOR TAXATION AS IT IS ALREADY TAXED IN THE HANDS OF THE ASSESSEE. THEREFORE, IT WAS ARGUED THAT ADDITION OF RS. 9,27,900/- MADE BY ASSESSING OFFICER BE DELETED. LD. CIT(A) HOWEVER CONFIRMED THE ACTION O F THE A.O. BY OBSERVING AS UNDER:- ITA NO. 2346/AHD/2010 A.Y. 2007-08 PAGE NO M/S ENJOY CHEMISTRY WITH YASH VS. ACIT 3 I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I DO NOT AGREE WITH THE APPELLANTS VIEW. THE CHIT FOUND SHOWED THAT T HE AMOUNT OF RS. 9,27,900/- WAS RECEIVED ON 31.05.2006. THE APPELLA NT HAS NOT PROVED THAT THE AMOUNT RECEIVED ON 31.05.2006 WAS LYING WI TH HIM IN CASH FROM 31.05.2006 TILL THE DATE OF SEARCH ON 07.11.20 06 WITHOUT DEPOSITING IT IN ANY BANK ACCOUNT OR WHETHER THE SA ME WAS NOT SPENT FOR ANY OTHER PURPOSE OR INVESTMENT. WHEN THE APPE LLANT DISCLOSED THIS AMOUNT WRITTEN IN THE CHITS AS HIS INCOME AT T HE TIME OF SEARCH IN ADDITION TO INCOME DISCLOSED FOR CASH FOUND, IT WAS IMPLIED THAT THESE ARE SEPARATE ITEMS OF DISCLOSURE. WHEN THE APPELLA NT RETRACTS AND SUBMITS THAT CASH FOUND IS COVERED WITH THE INCOME WRITTEN IN THE CHITS, THE ONUS IS ON THE APPELLANT TO PROVE THE NE XUS WITH THE EVIDENCE. IN THE ABSENCE OF ANY NEXUS PROVED, THE CLAIM IS NOT ACCEPTED. HENCE, THE ACTION OF THE A.O. IS JUSTIFI ED AND THE ADDITION IS CONFIRMED. 4. BEFORE US, THE ASSESSEE REITERATED THE SAME SUBM ISSION AS MADE BEFORE CIT(A) WHILE LD. D.R. RELIED ON THE ORDER OF THE LO WER AUTHORITIES. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, W E FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSEE HAS DISCLOSED A SUM OF RS. 9,27,900/- ON THE BASIS OF A SMALL CHIT FOUND AT THE TIME OF SEAR CH IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. LATER ON ASSESSEE RETRACTED FROM THIS DISCLOSURE AND FOR THIS RETRACTION NO COGENT EVIDENCE OR EXPLANATI ON WAS OFFERED BY HIM. THEREFORE, THIS ADDITION WAS MADE BY THE A.O. WHICH HAS BEEN SUSTAINED BY LD. CIT(A). BEFORE US ALSO, NO SUCH EVIDENCE OR E XPLANATION HAS BEEN GIVEN TO DEVIATE US FROM THE ABOVE FINDING OF THE LD. CIT (A), THEREFORE, ORDER PASSED BY HIM IS HEREBY UPHELD. THIS GROUND OF THE ASSESSEE IS DISMISSED. 5. SECOND GROUND RELATES TO CHARGING OF INTEREST U/ S 234B AND 234C OF THE ACT. IN RESPECT OF THIS GROUND, LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT AT THE TIME OF SEARCH ON 07.11.2006, AN AMOUNT OF RS. 24,00,000/- WAS SEIZED IN CASH BY THE REVENUE AUTHORITIES AND THE S AME WAS ADJUSTED BY THE ITA NO. 2346/AHD/2010 A.Y. 2007-08 PAGE NO M/S ENJOY CHEMISTRY WITH YASH VS. ACIT 4 A.O. AGAINST THE TAX LIABILITY BUT NO CREDIT WAS GI VEN BY HIM FOR THIS ADJUSTMENT WHILE CHARGING INTEREST U/S 234B AND 234 C AS HE HAS CHARGED INTEREST UNDER THESE SECTIONS UP TO DATE OF ASSESSM ENT WHILE IT SHOULD HAVE BEEN RESTRICTED TO THE DATE OF SEIZURE OF CASH I.E. ON 07.11.2006. FOR MAKING THIS SUBMISSION RELIANCE WAS PLACED BY THE ASSESSEE ON THE FOLLOWING CASE LAWS:- (I). CGT V.R. DAMODARAN- 247 ITR 698 (MAD) (II). GTO V. VINODKUMAR HISSARIA-79 TTJ 580 (JD) (III). KAMAL KISHORE CANDAK V. ITO-103TTJ 843(JD) 6. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE CASH OF RS. 24,00,000/- WAS SEIZED BY THE DEPARTMENT AT THE TIME OF SEARCH ON 07.11.20 06 AND THE SAME WAS ADJUSTED AGAINST THE TAX LIABILITY OF THE ASSESSEE. HOWEVER, WHILE CHARGING INTEREST U/S 234B AND 234C, ASSESSING OFFICER HAS C HARGED INTEREST UP TO THE DATE OF ASSESSMENT. LD. CIT(A) HAS ALSO SUMMARILY REJECTED THE APPEAL FILED BY THE ASSESSEE, BEFORE HIM ON THE GROUND OF CHARGI NG OF INTEREST U/S 234B AND 234C. THIS ACTION OF LOWER AUTHORITIES IS NOT JUSTIFIED AS THE CASH OF RS. 24,00,000/- FOUND AT THE TIME OF SEARCH HAD BEEN AD JUSTED AGAINST THE TAX LIABILITY OF THE ASSESSEE. THE INTEREST U/S 234B A ND 234C SHOULD HAVE BEEN CHARGED ONLY UP TO THE DATE OF SEIZURE OF CASH I.E. UP TO 07.11.2006 AND NOT TILL THE DATE OF FINALIZATION OF ASSESSMENT. THE A SSESSING OFFICER IS, THEREFORE, DIRECTED TO CHARGE INTEREST U/S 234B AND 234C ON TH E AMOUNT OF RS. 24,00,000/- TILL THE DATE OF SEIZURE OF CASH ON 07. 11.2006. THE ASSESSING ITA NO. 2346/AHD/2010 A.Y. 2007-08 PAGE NO M/S ENJOY CHEMISTRY WITH YASH VS. ACIT 5 OFFICER IS ACCORDINGLY DIRECTED TO RE-CALCULATE THE INTEREST PAYABLE BY ASSESSEE U/S 234B AND 234C. THIS GROUND IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/ (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22 /02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#