Dr. Narendra Singh, Lucknow V. Income Tax Officer-4(2), Lucknow

ITA 249/LKW/2014

• Counselvise Citation: 24923714 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: O N PATHAK
• Keywords: Principle of natural justice
• Section: 145

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.249/LKW/2014 ASSESSMENT YEAR 2009-10 INCOME TAX OFFICER, 4(2) LUCKNOW. VS DR. NARENDRA SINGH, C-114, RAJAJIPURAM LUCKNOW. PAN AFSPS 0828 K (RESPONDENT) (APPELLANT) SHRI P.K. KARIWALA, CA APPELLANT BY SHRI O.N. PATHAK, DR RESPONDENT BY 28/07/2015 DATE OF HEARING 28./08/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II, LUCKNOW DATED 26/11/2013 FOR THE ASSESSMENT YEAR 20 09-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DISMISSING THE GROUND NOS. 1 AND 3 IN THE APPEAL FILED BEFORE CIT(A) BY HOLDING THAT, IT IS GENERAL IN NATURE WITHOUT GOING INTO THE MERITS OF IT AND CONTENTION RAISED BY THE ASSESSEE. 2. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON F ACTS IN NOT APPRECIATING THAT BOOKS CANNOT BE REJECTED ONLY ON THE BASIS OF STATEMENT GIVEN AT THE TIME OF SURVEY U/S 133A(3)(III)OF THE ACT. 3. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE CONTENTION OF THE ASSESSEE THAT NO ADDITION CAN MADE ON THE FOUNDATION OF STATEMENT RECORDED AT THE TIME OF SURVEY, WHICH IS CONTRARY TO THE INSTRUCTION OF THE BOARD. 2 4. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE CONTENTION OF THE ASSESSEE THAT SOLE BASIS FOR REJECTING THE BOOKS OF ACCOUNT WAS SURRENDER MADE BY THE ASSESSEE DURING T HE COURSE OF SURVEY AND NO DEFECTS WERE POINTED OUT BY THE A.O. IN RESPECT OF ITS COMPLETENESS OR CORRECTNESS IN THE BOOKS OF ACCOUNT . 5. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ENHANCING THE INCOME OF THE ASSESSEE BY RS. 20,00,000/- AS UNDISCLOSED INCOME OVER AND ABOVE THE ADDITION OF RS. 50,00,000/- MADE BY ASSESSING OFFICER. 6. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT ID. A.O. HAS ADDED RS. 50,00,000/- AS RECEIPTS OF THE APPELLANT ON ESTIMATE BASIS AND APPLIED NET PROFIT RATE THEREOF, AFTER REJECTING BOOKS OF ACCOUNT U/S 145 OF THE ACT, WHICH DO NOT INCLUDE THE AMOUNT SURRENDERED DURING THE COURSE OF SURVEY. 7. BECAUSE THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT ID. A.O. HAS NOT INCLUDED THE SUM OF RS. 20,00,000/- WHICH WAS SURRE NDER AT THE TIME OF SURVEY IN THE TOTAL INCOME OF THE AS SESSEE, WHILE COMPLETING THE ASSESSMENT. 8. BECAUSE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE CRITICAL CONDITION OF THE ASSESSEE, WHO IS PARALYZED AND BED RIDDEN. 9. BECAUSE THE ID. CIT(A) ORDER IS CONTRARY TO THE LAW, FACTS AND PRINCIPLES OF NATURAL JUSTICE, THEREFORE, IT DESERV ES TO BE SET ASIDE, AND/OR MODIFIED TO GRANT RELIEF TO THE APPELLANT AN D THE APPEAL SHOULD BE ALLOWED. 3. IT WAS WERE SUBMITTED BY THE LD. AR OF THE ASSE SSEE THAT ON PAGES 18 TO 25 OF THE PAPER BOOK IS THE SURRENDER STATEME NT OF THE ASSESSEE AND THE RELEVANT PAGES ARE PAGES 23 TO 24 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT IT WAS STATED BY THE ASSESSEE IN SUR RENDER STATEMENT THAT HE SURRENDERS RECEIPT OF RS.20.00 LAKHS IN ORDER TO BU Y MENTAL PEACE AND TO AVOID ANY LITIGATION. HE FURTHER SUBMITTED THAT THE AO HAS INCLUDED THIS SURRENDER AMOUNT OF RECEIPT AND THEREAFTER, THE AO ESTIMATED THE RECEIPTS OF THE ASSESSEE AT RS.50.00 LAKHS AND AFTER APPLYIN G THE PROFIT RATE OF THE DISCLOSED INCOME OF THE ASSESSEE, THE AO COMPUTED T HE INCOME OF THE ASSESSEE AND THEREFORE, FURTHER ADDITION OF RS.20.0 0 LAKHS AS PER THE ORDER 3 OF THE CIT(A) IS NOT JUSTIFIED. LD. DR OF THE REVEN UE SUPPORTED THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IN THE SURRENDER STATEMENT, THE ASSESSEE HAS SURRENDERED A DDITIONAL RECEIPTS OF RS.20.00 LAKHS AND IN THE ASSESSMENT ORDER, THE AO HAS ESTIMATED THE GROSS RECEIPT OF THE ASSESSEE AT RS.50.00 LAKHS AS AGAINST RECEIPTS SHOWN BY THE ASSESSEE AT RS.30.12 LAKH AND BY APPLYING NE T PROFIT RATE OF 30%, THE AO WORKED OUT THE INCOME OF THE ASSESSEE AT RS. 15.00 LAKHS. IN THIS MANNER, THE AO MADE AN ADDITION OF RS.5,43,417/-. T HIS ADDITION MADE BY THE AO HAS BEEN UPHELD BY THE LD. CIT(A) AND IN ADD ITION TO THAT, HE ALSO ENHANCED INCOME OF THE ASSESSEE BY THE SAID AMOUNT OF RS.20.00 LAKHS WAS SURRENDERED BY THE ASSESSEE BY OBSERVING THAT T HE ASSESSEE HAS NEVER STATED IN HIS SURRENDER STATEMENT THAT HE HAS INCUR RED ANY EXPENSES AGAINST THE UNRECORDED PROFESSIONAL RECEIPT. IN OUR CONSIDERED OPINION, THIS OBSERVATION OF THE LD. CIT(A) IS MEANINGLESS BECAUS E EVEN IF IT IS NOT SO SPECIFICALLY STATED BY THE ASSESSEE IN THE SURRENDE R STATEMENT THAT ANY EXPENSES WAS INCURRED IN RESPECT OF UNACCOUNTED REC EIPT, GROSS RECEIPT CANNOT BE TAXED AND INCOME OUT OF UNACCOUNTED RECEI PT ONLY CAN BE BROUGHT TO TAX. THIS HAS BEEN DONE BY THE AO AND TH IS ACTION OF THE AO HAS BEEN UPHELD BY THE LD. CIT(A). UNDER THESE FACTS, A NY FURTHER ADDITION ON THE BASIS OF SAME SURRENDERED UNACCOUNTED RECEIPT A MOUNTS TO DOUBLE ADDITION AND WE HOLD THAT THE ORDER OF THE LD. CIT( A) ON THIS ASPECT I.E. ENHANCEMENT OF INCOME BY RS.20.00 LAKHS IS NOT PROP ER AND NOT SUSTAINABLE. THIS ENHANCEMENT OF INCOME BY LD. CIT( A) IS HEREBY DELETED. AS A CONSEQUENCE, THE INCOME OF THE ASSESSEE SHOULD BE ACCEPTED AT RS.14.02 LAKHS AS HAS BEEN ASSESSED BY THE AO IN TH E ASSESSMENT ORDER BECAUSE WE DO NOT FIND ANY MERIT IN THE VARIOUS ARG UMENTS OF THE LEARNED AR OF THE ASSESSEE IN RESPECT OF THE ADDITION MADE BY THE A.O. BECAUSE THE 4 ADDITION MADE BY THE A.O. IS ON THE BASIS OF ENHANC EMENT IN RECEIPTS AS PER SURRENDER STATEMENT AND PROFIT RATE ADOPTED BY THE A.O. IS SAME AS DECLARED BY THE ASSESSEE IN RESPECT OF ACCOUNTED RE CEIPTS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A.K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28/08/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. RE GISTRAR