Appeal Details
Counselvise Citation
263120514 RSA 2009
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-10-2011
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
C
Next Hearing Date
13-10-2011
Assessment Year
2005-2006
Appeal Filed On
23-09-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. L. GEHL OT, AM) ITA NO.2631/AHD/2009 A. Y.: 2005-06 NARSINGBHAI CHUNILAL PATEL, 19,SARVODAY NAGAR SOCIETY, BHUYANGDEV, AHMEDABAD VS THE D. C. I. T. (OSD),CIRCLE-9, AHMEDABAD PA NO. AAMPP 6740 L (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVETIA, AR RESPONDENT BY SHRI S. K. MEENA, SR. DR DATE OF HEARING: 13-10-2011 DATE OF PRONOUNCEMENT: 20-10-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV , AHMEDABAD DATED 28-07-2009, FOR ASSESSMENT YEAR 2005-06, ON T HE FOLLOWING GROUNDS: 1.1 THE ORDER PASSED U/S. 250 ON 28.7.2009 FOR A. Y. 2005-06 BY CIT(A)-XV, AHMEDABAD PARTLY CONFIRMING THE ADDIT IONS AGGREGATING TO RS.1,06,92,477 MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL JUSTICE. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE FOLLOWING ADDITIONS MADE BY AO. ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 2 (A) LOOSE PAPER PAGE 1 OF ANN-A: RS.42,97,627 (B)LOOSE PAPER PAGE 7 & 10 OF ANN-A RS.22,06,000 (C) LOOSE PAPER NO.14 OF ANN-A RS.22,40,000 (D) LOOSE PAPER NO.14(BACK SIDE) RS.17,46,000 (E) CASH FOUND DURING SURVEY RS. 2,02,850 2.2 THAT IN FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ABOVE SAID ADDITIONS. 2.3 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G THE IMPUGNED ADDITIONS WITHOUT CONSIDERING THE SUBMISSI ONS MADE FROM TIME TO TIME AND MATERIAL PRODUCED BEFORE HER. THE LD. CIT(A) HAS NOT DEALT WITH FULLY AND PROPERL Y THE CONTENTIONS RAISED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITIONS. 2.3 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN HOLDING THAT THE APPELLANT HAD FAILED TO GIVE AN DOCUMENTARY EVIDENC E WITH REGARD TO THE EXPENSES AND THEREFORE THE NOTINGS RECORDED ON THE LOOSE PAPERS ITSELF WERE LIABLE TO BE TAXED AND NOT THE INCOME THEREIN. 3.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G MULTIPLE ADDITIONS WITHOUT ALLOWING THE BENEFIT OF TELESCOPI NG. 2. THE FACTS OF THE CASE AS NOTED IN THE IMPUGNED O RDER ARE THAT THE ASSESSEE IS ENGAGED IN CONSTRUCTION ACTIVITIES IN HIS INDIVI DUAL CAPACITY AS WELL AS HIS PARTNERSHIP FIRMS NAMED (I) PARTH BUILD ERS (II) PARTH ASSOCIATES (III) PARTH DEVELOPERS AND (IV) PO OJA ASSOCIATES. RETURN OF INCOME WAS FILED ON 31-10-2005 DECLARING TOTAL INCOME RS.13,39,318/- WHICH WAS ASSESSED U/S !43(3) OF THE IT ACT AT RS.1,26,03,995/- IN WHICH ADDITION OF RS.1,12,64,67 7/- WAS MADE ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 3 WHICH WAS CHALLENGED BEFORE THE LEARNED CIT(A). ON PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT FOLLOWING ADDITIONS HAVE BEEN MADE ON THE BASIS OF PAPERS IMPOUNDED DURING SURVEY CONDUCT ED AT THE PREMISES OF THE APPELLANT U/S 133 A ON 18-3-2005. D URING SURVEY CASH OF RS.2,02,850/- WAS FOUND AT THE PREMISES OF THE ASSESSEE ALONG WITH DOCUMENTS IN THE FORM OF LOOSE PAPERS, C HITS WHICH WERE FOUND, INVENTORIZED AS ANNEXURE-A CONTAINING 20 PAG ES AND IMPOUNDED. THE STATEMENT OF THE ASSESSEE WAS ALSO R ECORDED DURING SURVEY ON 18-3-2005 IN WHICH THE ASSESSEE DECLARED RS.1 CRORE AS HIS UNACCOUNTED INCOME FOR FINANCIAL YEAR 2004-05 R ECEIVED AS ON- MONEY RECEIPTS FROM CONSTRUCTION OF VARIOUS RESIDEN TIAL SCHEMES AND PROJECTS, RS.75 LACS AS ON-MONEY FROM AHMEDABAD SCH EME AND RS.25 LACS AS ON-MONEY FROM MEHSANA SCHEMES. THE D OCUMENTS ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE BY THE AO AND WHICH ARE DISCUSSED BY THE AO ARE SUMMARIZED BELOW IN A T ABULAR FORM. SR. NO. DESCRIPTION OF IMPOUNDED PAPER AMOUNT PERTAINING TO THE PROJECT REASONS GIVEN IN THE ASSESSMENT ORDER I. ANNEXURE A PAGE 1 42,97,627 PRASTHAN SCHEME THIS PAGE IS DATED 28.2.05 AND ON THE LEFT HAND SIDE CASH RECEIVED FROM VARIOUS PERSONS TOTALING TO RS.42,97,627 IS NOTED. AGAINST SOME PERSONS NAMES, FLAT NUMBERS ALLOTTED HAVE BEEN MENTIONED. ON THE RIGHT HAND SIDE OF THE CHIT CASH TAKEN TO PETTY CASH AMOUNT, ADVANCE MADE IN CASH TO CERTAIN PERSONS, WHOSE INITIALS ARE GIVEN AND BALANCE CASH IN HAND ARE MENTIONED. THIS PAGE IS ENCLOSED AS ANNEXURE-1 OF THIS ORDER. ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 4 THE AO HAS STATED T4HAT THE ASSESSEE HAS NOT GIVEN ANY SATISFACTORY EXPLANATION AND HAD ADDED BACK ON THE BASIS OF SURRENDER OF INCOME IN WHICH ON MONEY PF RS.75 LACS FROM VARIOUS SCHEMES AT AHMEDABAD HAS BEEN SURRENDERED. THE RELEVANT PAGE OF THE STATEMENT OF THE APPELLANT DATED 18.3.2005 IN GUJARATI IS ENCLOSED AS ANNEXURE-2 OF THIS ORDER. II. ANNEXURE A PAGE 5 61,700 PAYMENTS AT SITE OFFICE THE ASSESSEE EXPLAINED THAT THIS PAGE (ENCLOSED AS ANNEXURE-3 OF THIS ORDER) CONTAINS NARRATIONS OF PAYMENTS MADE TO LABOUR AND SITE OFFICE WHICH WAS NOT FOUND TENABLE BY THE AO AND WAS ADDED BACK. IV ANNEXURE A PAGE 7 & 10 22,06,000 THIS PERTAINS TO PROFIT DISTRIBUTIOIN OF LAND AT MEHSANA NAMED NAVRANG LAND BETWEEN THE ASSESSEE AND HIS PARTNER AS HAS MENTIONED WHEN ASKED TO EXPLAIN THIS PAPER (ENCLOSED AS ANNEXURE -4 OF THIS ORDER), THE ASSESSEE HAS REPLIED THAT HE HAD PURCHASED THE SAID NAVRANG LAND FOR RS.22,06,000 IN CASH AND RECEIVED RS.25,40,000 IN CASH FROM THE MEMBERS ON SALE OF THE SAID LAND AND THE DIFFERENCE OF RS.3,34,000 HAD BEEN SHOWN AS HIS INCOME IN THE RETURN OF INCOME OF AY 2006-07. THE AO ASKED THE ASSESSEE TO PRODUCE DOCUMENTARY EVIDENCE OF PURCHASE OF LAND, SOURCE OF PAYMENT MADE FOR PURCHASE AND DATE- WISE DETAILS WITH EVIDENCE WITH REGARD TO RECEIPTS FROM MEMBERS OF RS.25,40,000 IN CASH AND ALSO REQUIRED THE ASSESSEE TO INFORM WHETHER THESE TRANSACTIONS WERE RECORDED IN HIS BOOKS. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION FOR THE QUERIES RAISED AND THE AO ADDED BACK RS.22,06,000 THAT IS (RS.25,40,000 (MONEY RECEIVED ON SALE OF LAND) RS.3,34,000 (INCOME DISCLOSED IN RETURN) ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 5 V ANNEXURE A PAGE 14 PRASTHAN PROJECT I THIS PAGE IS ENCLOSED AS ANNEXURE -5 OF THIS ORDER WHICH WAS CLAIMED TO BE ADHOC ACCOUNT RECORDS OF PRASTHAN PROJECT-I. IT WAS STATED TO THE AO THAT IT WAS TOTAL CASH RECEIVED FROM SALE OF TWELVE BUNGLOWS WERE RS.25,62,200 OUT OF WHICH EXPENDITURE INCURRED FOR PAYMENT TO LANDLORD BY CASH OF RS.22,40,000. NET PROFIT RECEIVED RS.3,22,000 THAT IS RS.25,62,200 MINUS RS.22,40,200 WAS DISCLOSED AS UNDISCLOSED INCOME IN THE RETURN OF INCOME FOR AY 2005-06. THE AO ASKED THE ASSESSEE TO FURNISH DATE-WISE DOCUMENTARY EVIDENCE OF RS.22,40,000, ALONGWITH LAND PURCHASE DOCUMENTS, ALSO DATE-WISE DOCUMENTARY EVIDENCE FOR SALE OF 12 BUNGALOWS FOR RS.25,62,000 ALONG WITH COMPLETE NAMES AND ADDRESSES OF PERSONS TO WHOM THE BUNGALOWS WERE SOLD. THE ASSESSEE DID NOT FURNISH THE REQUISITE DETAILS AND THE AO RELYING ON THE DISCLOSURE STATEMENT MADE DURING THE SURVEYWHERE THE ASSESSEE HAS DISCLOSED ON MONEY RECEIPT AMOUNTING TO RS.75 LACS FROM HIS VARIOUS PROJECTS AS THE BASIS FOR MAKING THIS ADDITION THAT IS RS.25,62,000 RS.3,22,000 = RS.22,40,000. VI ANNEXURE A PAGE 14 (BACK SIDE) PRASTHAN PROJECT THIS PAGE IS ENCLOSED AS ANNEXURE -6 OF THIS ORDER WHICH IS ADHOC ACCOUNT RECORD OF PRASTHAN PROJECT. TOTAL CASH RECEIVED FROM SALE OF TEN BUNGALOWS WAS RS.20,07,650 OUT OF WHICH EXPENDITURE INCURRED FOR PAYMENT TO LANDLORD BY CASH RS.17,46,000. NET PROFIT RECEIVED OF RS.2,61,650 (I.E. RS.20,07,650 RS.17,46,000) WAS DISCLOSED AS UNDISCLOSED INCOME IN THE RETURN OF INCOME FOR AY 2005-06. ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 6 THE AO ASKED THE ASSESSEE TO PRODUCE DOCUMENTARY EVIDENCE FOR CASH RECEIVED AS WELL AS FOR PAYMENTS, CASH PAID ALONGWITH DOCUMENTS OF LAND PURCHASED, NONE OF WHICH WAS FURNISHED TO THE AO. THE AO RELYING ON THE DISCLOSURE STATEMENT MADE DURING THE SURVEY ADDED BACK THIS AMOUNT THAT IS RS.17,46,000 (RS.20,07,650 RS.2,61,650). VII ANNEXURE A PAGE 17 4,43,500 PAYMENTS THIS PAGE IS ENCLOSED AS ANNEXURE 7 OF THIS ORDER. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THIS PAGE WAS FORGOTTEN AT THE SITE OFFICE AND HE HAD NOTHING TO DO WITH IT. THIS PAGE REFLECTS THE PAYMENTS AGGREGATING TO RS.4,43,500 OUT OF UNACCOUNTED CASH MADE TO JAY CORPORATION, RAJANIBHAI P. PATEL AND CHIMANLAL P. PATEL. VIII ANNEXURE A PAGE 20 67,000 SALE OF SHOP AT NAVRANG FLAT. IN THE IMPOUNDED PAGE (ENCLOSED AS ANNEXURE-8 ) OF THIS ORDER) CASH RECEIPT OF RS.67,000 HAS NOT BEEN EXPLAINED, THEREFORE, THE AO ADDED BACK THIS AMOUNT AS UNDISCLOSED INCOME FOR AY 2005-06. IX CASH IMPOUNDED 2,02,850 CASH AT BUSINESS PREMISES NO SATISFACTORY EXPLANATION WAS GIVEN DURING THE SURVEY AND NEITHER LATER AND THEREFORE IT WAS ADDED BACK BY THE AO AS UNDISCLOSED INCOME. ON THE WRITTEN SUBMISSIONS OF THE ASSESSEE, REMAND REPORT OF THE AO WAS CALLED FOR WHICH WAS RECEIVED VIDE HIS LETTER D ATED 20-10-08 WHICH WAS ALSO MADE AVAILABLE TO THE ASSESSEE AND W AS RECEIVED BY THE ASSESSEE ON 5-11-2008. COUNTER COMMENTS ON THE SAME WERE RECEIVED VIDE LETTER DATED 14-112008 OF THE ASSESSE E. THE FIRST ARGUMENT GIVEN IN THE WRITTEN SUBMISSION WAS THAT T HE IMPOUNDED ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 7 PAPERS DO NOT BEAR THE SIGNATURES OF THE ASSESSEE A ND IT CANNOT BE PRESUMED THAT NOTINGS RECORDED THEREIN PERTAINED TO HIM. THE MAIN THRUST OF THE ARGUMENT WAS THAT THE NOTINGS RECORDE D ON THE PAGES ARE RECEIPTS AND NOT INCOME OF THE ASSESSEE. FOR TH IS DECISION OF ITAT AHMEDABAD BENCH IN THE CASE OF M/S. SHALIN BUI LDERS IN IT (SS) A NO.99/AHD/1998 DATED 12-5-2003 WAS CITED WHEREIN 8% OF THE GROSS RECEIPTS WERE TREATED AS NET PROFIT AND AS UN DISCLOSED INCOME. IT WAS ALSO STATED THAT THE AO SHOULD HAVE NOT ADOP TED PICK AND CHOOSE POLICY AND THAT THE BENEFIT OF TELESCOPING S HOULD HAVE BEEN ALLOWED TO THE ASSESSEE, ESPECIALLY WHEN THE ASSESS EE HAD DISCLOSED INCOME AGGREGATING TO RS.4,95,650/- IN HIS RETURN. 3. THE LEARNED CIT(A) CONSIDERING THE FINDINGS OF T HE AO IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE AND MATERI AL ON RECORD PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 8 TO PARA 12 IN THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: 8. AFTER GOING THROUGH RIVAL SUBMISSIONS I AM OF THE VIEW THAT THE AO HAS ANALYZED EACH AND EVERY IMPOUNDED PAPER AND AFTER VERIFICATION AND GIVING DUE OPPORTUNITIES TO THE APPELLANT TO PRODUCE DOCUMENTARY EVIDENCE IN RESPECT OF THE LAND PURCHASED AND DATE-WISE EVIDENCE OF RECEIPTS RECEIVED ON SALE OF FLAT / BUNGALOW WITH THEIR NAMES AND ADDRESSES PROCEEDED WITH THE ADDITIONS. THE ASSESSE E FAILED TO GIVE ANY DOCUMENTARY EVIDENCE IN RESPECT OF THE EXPENDITURE RECORDED IN LACS IN THE IMPOUNDED PAPERS AND NEITHER ANY DOCUMENTARY EVIDENCE IN RESPECT OF THE SALE RECEIPTS MENTIONED IN THESE IMPOUNDED PAGES. THE ADDITION MADE WITH RESPECT TO RS.42,97,627 RECO RDED IN ANNEXURE -A - PAGE 1(ANNEXURE -1 OF THIS ORDER) AS ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 8 CASH RECEIVED FROM VARIOUS PERSONS IS WELL REASONED , AND IS UPHELD. ADDITION MADE OF RS.22,06,000 ON THE BASIS OF IMPOUNDED PAGE ANNEXURE-A - PAGE ~ AND 10 (ANNEXURE- 4 OF THIS ORDER) AS CASH USED FOR PURCHASE OF NAVRA NG LAND AT MEHSANA AND CASH RECEIVED ON ITS SALE IS AL SO WELL REASONED AND IS UPHELD BECAUSE DATE-WISE DETAILS WITH EVIDENCE WITH REGARD TO RECEIPTS FROM MEMBERS OF RS.25,40,000 WERE NOT FURNISHED NEITHER PURCHASE DOCUMENTS FOR PURCHASE OF LAND. THE AO GAVE SET OFF OF RS.3,34,000 OF THE UNDISCLOSED INCOME DECLARED IN T HE RETURN BY THE ASSESSEE AND MADE ADDITION OF RS.22,06,000 (RS.25,40,000 - RS.3,34,000) SIMILARLY ADDITION MADE OF RS.22,40,000 ON THE BASI S OF IMPOUNDED PAPER ANNEXURE - A-PAGE 14 (ANNEXURE-5 OF THIS ORDER) WHICH RECORDED UNACCOUNTED EXPENDITURE INCURRED IN CASH AND UNACCOUNTED SALE OF 12 BUNGALO WS OF RS.25,62,200 OF PRASTHA PROJECT-I IS WELL REASON ED AND AFTER GIVING DUE OPPORTUNITIES TO THE ASSESSEE TO PRODUCE DOCUMENTS OF PURCHASE OF LAND AND DATE-WISE RECEIPT S OF MEMBERS. THE AO GAVE SET OFF OF RS.3,22,200 OF THE UNDISCLOSED INCOME DECLARED IN THE RETURN BY THE ASSESSEE AND MADE ADDITION OF RS.22,40,000 (RS.25,62,200 - RS.3,22,200). SIMILARLY THE ADDITION OF RS.17,46,000 MADE ON THE BASIS OF IMPOUNDED PAPER ANNEXURE-A-PAGE 14 (BACK SIDE) W ITH RESPECT TO PRASTHAN PROJECT IS WELL REASONED BECAUS E DESPITE OPPORTUNITIES GIVEN THE APPELLANT WAS NOT A BLE TO GIVE DOCUMENTARY EVIDENCE OF LAND PURCHASE NEITHER OF CASH RECEIVED OF RS.20,07,650. THE AO GAVE SET OFF OF RS.2,61,650 OF THE UNDISCLOSED INCOME DECLARED IN T HE RETURN BY THE ASSESSEE AND MADE ADDITION OF RS.17,46,000 (RS.20,07,650 - RS.2,61,650). 9. THE APPELLANT DECLARED RS.1 CRORE AS HIS UNDISCL OSED INCOME AND AGREED TO PAY TAXES ON THE SAME, BUT IN THE RETURN FILED ON 31.10.2005 SUBSEQUENT TO THE SURVEY ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 9 CONDUCTED ON 18.3.2005, THE APPELLANT DECLARED UNACCOUNTED INCOME U/S.133A OF RS.L3,83,650 ONLY. T HIS FACT ALSO CANNOT BE OVER-LOOKED THAT DURING SURVEY ON 18.3.2005 THE APPELLANT IN FULL CONSCIOUSNESS DISCL OSED INCOME OF RS.1 CRORE FOR FY 2004-05 AND STATED THAT HE WAS READY TO PAY TAX ON THE SAID INCOME, WHICH HE DEFINED AS RS.75 LACS RECEIVED ON ACCOUNT OF ON MON EY OUT OF PRASTHAN PROJECT SCHEME AT AHMEDABAD AND RS.25 LACS RECEIVED ON ACCOUNT OF ON MONEY FROM NAVRANG BUNGALOWS SCHEME HI MEHSANA. RELEVANT PAGE OF STATEMENT IN GUJARATI IS ENCLOSED AS ANNEXURE-2 OF THIS ORDER. 10. WITH RESPECT TO OTHER ADDITIONS OF RS.61,700 ON ACCOUNT OF PAYMENTS MADE TO LABOUR CONTRACTORS AS P ER ANNEXURE-A - PAGE-5 (ANNEXURE-3 OF THIS ORDER), ADD ITION OF RS.4,43,500 AS PAYMENTS MADE TO JAY CORPORATION, RAJANIBHAI P. PATEL AND CHIMANLAL P. PATEL (AS PER ANNEXURE-A-PAGE-17 OF THE IMPOUNDED PAGES) AND ADDITION OF RS.67,000 AS CASH RECEIPT NOT OFFERED F OR TAX AS PER ANNEXURE-A-PAGE 20, 1 AM INCLINED TO ALLOW T HE BENEFIT OF TELESCOPING IN THE ADDITIONS CONFIRMED A BOVE. 11. HOWEVER, WITH RESPECT TO THE ADDITION MADE IN RESPECT OF CASH FOUND DURING THE SURVEY OF RS.2,02, 850 DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS EXPLAINED THAT CASH BALANCE AS ON 31.3.2005 WAS RS. 13,93,82, THAT THE APPELLANT HAD ALREADY DISCL OSED HUGE AMOUNT OF RS.4,95,650 AS HIS INCOME, THAT HE SHOULD BE ALLOWED BENEFIT OF TELESCOPING FOR THIS, IS NOT CONVINCING BECAUSE ON THE DATE OF SURVEY THAT IS 18.3.2005 THE APPELLANT WAS NOT ABLE TO EXPLAIN THE CASH FOUND OF RS.2,02,850. WHAT STOOD RECORDED IN THE BO OKS OF ACCOUNTS AS ON 31.3.2005 OR 18.3.2005 IS NOT MAT ERIAL AT THIS STAGE WHEN ON THE SPOT DURING THE SURVEY TH E APPELLANT COULD NOT EXPLAIN THIS CASH. THE ADDITION OF RS.2,02,850 AS UNEXPLAINED CASH FOU ND DURING SURVEY IS CONFIRMED. ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 10 THE ADDITION IS THEREFORE CONFIRMED OF RS.1,06,92,4 77 ( RS.42,97,627 + RS.22,06,000 + RS.22,40,000 + RS.17,46,000 + RS.2,02,850). THE APPELLANT GETS RELIEF OF RS. 5,72,200 (RS.L,12, 64,677 - RS.1,06,92,477 ) 12. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO TRANSLATED COPIES OF THE SEIZED DOCUMENTS (ANNEXURE ) REFERRED TO ABOVE AND ALSO REFERRED TO THE STATEMENT OF THE ASS ESSEE RECORDED DURING THE COURSE OF SURVEY ON 18-03-2005 (PB-69) I N WHICH THE ASSESSEE HAS GIVEN HISTORY OF HIS BUSINESS AND THE ASSETS HELD BY HIM AND THE SURRENDER MADE BY THE ASSESSEE OF RS.1 CRORES IN THE FINANCIAL YEAR UNDER CONSIDERATION. HE HAS SUBMITTE D THAT THE ASSESSEE EXPLAINED IN HIS STATEMENT AT THAT TIME TH AT COPIES OF THE DEVELOPMENT AGREEMENTS ETC. WERE NOT AVAILABLE. HE WOULD SUPPLY THE SAME LATER ON. HE HAS REFERRED TO ANOTHER STATE MENT OF THE ASSESSEE (PB-65) DATED 06-06-2005 IN WHICH THE ASSE SSEE EXPLAINED THE SEIZED PAPERS AND IT WAS EXPLAINED THAT PROFIT EARNED ON VARIOUS PROJECTS WERE DISTRIBUTED, THEREFORE SHARE OF THE A SSESSEE COULD ONLY BE ASSESSED TO TAX WHICH THE ASSESSEE HAS ALREADY D ISCLOSED IN THE RETURN OF INCOME. HE HAS THEREFORE, SUBMITTED THAT THE ADDITIONS ARE CLEARLY UNJUSTIFIED. HE HAS REFERRED TO PB-62 (SEIZ ED DOCUMENTS) WITH REGARD TO ADDITION OF RS.42,97,627/- AND SUBMITTED THAT THE SAME DID NOT BELONG TO THE ASSESSEE. HE HAS SUBMITTED THAT T HE SEIZED DOCUMENTS ARE DUMB DOCUMENTS AND THE AO HAS TAKEN T HE TOTAL ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 11 RECEIPTS AS INCOME OF THE ASSESSEE AS PER STATEMENT RECORDED DURING THE COURSE OF SURVEY. HE HAS HOWEVER, ADMITTED THAT THE ASSESSEE HAS NOT RETRACTED FROM HIS STATEMENT RECORDED DURIN G THE COURSE OF SURVEY WHEREBY RS.1 CRORES WAS SURRENDERED FOR THE PURPOSE OF TAXATION. HE HAS REFERRED TO THE TRANSLATED COPIES OF THE SEIZED PAPERS (PB- 58, PB-59, PB-60 AND PB-62). HE HAS FUR THER SUBMITTED THAT INCOME AND EXPENSES SHOULD BE CONSIDERED TOGET HER AND WITH REGARD TO CASH FOUND DURING THE COURSE OF SURVEY HE HAS EXPLAINED THAT THE ASSESSEE HAS ALREADY DISCLOSED THE INCOME AGGREGATING TO RS.4,95,650/- IN THE RETURN OF INCOME. THEREFORE, T ELESCOPING BENEFIT SHOULD BE GIVEN TO THE ASSESSEE. HE HAS FURTHER SUB MITTED THAT THE SEIZED DOCUMENTS DID NOT BEAR SIGNATURE OF THE ASSE SSEE AND THE SAME ARE ALSO NOT IN THE HAND-WRITING OF THE ASSESS EE. NO INCOME IS EARNED BY THE ASSESSEE OUT OF THE SEIZED PAPERS. TH E ASSESSEE HAS ALREADY DISCLOSED THE AMOUNT OF RS.13,39,318/- IN T HE RETURN OF INCOME. THEREFORE, NO FURTHER ADDITION IS CALLED FO R IN THE MATTER. HE HAS SUBMITTED THAT ALL THE SEIZED PAPERS WERE PROPE RLY EXPLAINED BEFORE THE AO IN THE WRITTEN SUBMISSION; THEREFORE, THE ADDITIONS SHOULD NOT HAVE BEEN MADE AGAINST THE ASSESSEE. HE HAS FURTHER SUBMITTED THAT AT THE MOST INCOME MAY BE ASSESSED A S AGAINST THE TOTAL RECEIPT WHICH IS ALREADY OFFERED IN THE RETUR N OF INCOME AND THAT ENTIRE STATEMENT SHOULD BE CONSIDERED. HE HAS SUBMI TTED THAT SINCE THE ASSESSEE EXPLAINED ALL THE SEIZED PAPERS, THERE FORE, ONUS UPON THE ASSESSEE AS PER SECTION 292 C OF THE IT ACT HAS BEEN DISCHARGED. ON THE OTHER HAND, THE LEARNED DR RELIE D UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SEIZED PAPERS WERE FOUND FROM THE POSSESSION OF THE ASSESSEE AND THE ASSESSE E VOLUNTARILY ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 12 DISCLOSED THE UNDISCLOSED INCOME OF RS.1 CRORES IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY WHICH WAS BASE D ON THE SEIZED DOCUMENTS. THEREFORE, ADDITION MADE BY THE AO AND C ONFIRMED BY THE LEARNED CIT(A) IS JUSTIFIED. HE HAS SUBMITTED T HAT THE ASSESSEE HAS NOT RETRACTED FROM HIS STATEMENT AND NO EVIDENC ES HAVE BEEN FILED TO EXPLAIN THE SUBMISSIONS MADE BY THE ASSESS EE. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LEAR NED CIT(A). HE HAS SUBMITTED THAT SINCE THE ASSESSEE HAS NOT EXPLAINED THE SEIZED PAPERS, THEREFORE, ONUS UPON THE ASSESSEE IS NOT DI SCHARGED. THE LEARNED DR SUBMITTED THAT ADDITIONS MAY BE CONFIRME D AND THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE SEIZED DOCUME NTS REFERRED TO IN THE ORDERS OF THE AUTHORITIES BELOW WERE IMPOUNDED DURI NG THE COURSE OF SURVEY FROM THE POSSESSION AND PREMISES OF THE ASSE SSEE. THEREFORE, THE RECOVERY OF THE SEIZED DOCUMENTS FRO M THE ASSESSEES POSSESSION AND CONTROL HAS NOT BEEN DISPUTED. SECTI ON 292 C OF THE IT ACT IS MADE APPLICABLE TO THE SURVEY U/S 133A OF THE IT ACT WITH EFFECT FROM 01-06-2002. THE SAME READS AS UNDER: 292C. [(1)] WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 [OR SURVEY UNDER SECTION 133A ], IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRESUMED ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 13 (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SU CH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR W HICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, O R TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSONS HANDWRITING, AND IN THE CASE OF A DOC UMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STA MPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED.] [(2) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN DELIVERED TO THE REQUISITIONING OF FICER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 132A , THEN, THE PROVISIONS OF SUB-SECTION (1) SHALL APPLY AS IF SUC H BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS WHICH HAD BEE N TAKEN INTO CUSTODY FROM THE PERSON REFERRED TO IN C LAUSE (A) OR CLAUSE (B) OR CLAUSE (C), AS THE CASE MAY BE , OF SUB- SECTION (1) OF SECTION 132A , HAD BEEN FOUND IN THE POSSESSION OR CONTROL OF THAT PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 .] ACCORDING TO THE ABOVE PROVISIONS, WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLES OR THINGS ARE FOUND IN THE POSSESSION OR CONTROL OF AN Y PERSON IN THE COURSE OF A SEARCH OR SURVEY UNDER THE IT ACT, IT M AY BE PRESUMED THAT SUCH DOCUMENTS ARE BELONGING TO SUCH PERSON AN D THE CONTENTS OF SUCH BOOKS OF THE SAME ARE TRUE. THEREFORE, BURD EN IS UPON THE ASSESSEE TO EXPLAIN THE SEIZED PAPERS. IN CASE, THE ASSESSEE ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 14 DISPUTES CORRECTNESS OF THE SEIZED DOCUMENTS FOUND DURING THE COURSE OF SURVEY BURDEN WOULD BE UPON THE ASSESSEE TO EXPLAIN THE SAME THROUGH EVIDENCES OR MATERIALS TO THE SATISFAC TION OF THE REVENUE AUTHORITIES. THE ASSESSEE IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY ON FINDING THE SEIZED DOCUMENT S FROM HIS POSSESSION VOLUNTARILY MADE THE STATEMENT ON 18-03- 2005 AND SURRENDERED RS.1 CRORES AS UNACCOUNTED INCOME FOR T HE ASSESSMENT YEAR UNDER APPEAL AND AGREED TO PAY THE TAXES. THE ASSESSEE THEREAFTER DID NOT RETRACT FROM HIS STATEMENT RECOR DED DURING THE COURSE OF SURVEY. THUS, THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY FROM THE POSSESSION OF THE ASSESSEE REMAINED UNEXPLAINED. THE HONBLE CHHATISGARH HIGH COURT IN THE CASE OF A CIT VS HUKUM CHAND JAIN, 337 ITR 238 HELD AS UNDER: AN ADMISSION IS AN IMPORTANT PIECE OF EVIDENCE BUT IT IS NOT CONCLUSIVE. IT IS REBUTTABLE. IT IS OPEN TO THE ASSESSEE WHO MADE THE ADMISSION TO ESTABLISH THAT T HE CONFESSION WAS INVOLUNTARY AND THE STATEMENT WAS EXTRACTED UNDER DURESS AND COERCION. THE BURDEN OF PROVING THAT THE STATEMENT WAS OBTAINED BY COERCION OR INTIMIDATION LIES UPON THE ASSESSEE. WHERE THE ASSE SSEE CLAIMS THAT HE MADE STATEMENT UNDER A MISTAKEN BELI EF OF FACT OR LAW, HE SHOULD HAVE APPLIED FOR RECTIFICATI ON TO THE AUTHORITY WHO PASSED THE ORDER BASED UPON HIS STATE MENT. THE RETRACTION SHOULD BE MADE AT THE EARLIER OPPORT UNITY AND IT SHOULD BE ESTABLISHED BY PRODUCING CONTEMPORANEOUS RECORD OR EVIDENCE, ORAL OR DOCUMENTARY, TO SUBSTANTIATE THE ALLEGATION THAT HE WAS FORCED TO MAKE THE STATEMENT INVOLUNTARILY. A SEARCH WAS CONDUCTED IN THE PRESENCE OF THE ASSESSEE AND HIS THREE SONS. THE ASSESSEE WAS CONFRONTED WITH THE DOCUMENTS SEIZED DURING THE SEA RCH ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 15 PROCEEDINGS, BUT HE COULD NOT EXPLAIN THE SOURCE OF INCOME. APART FROM DOCUMENTS AND LOOSE PAPERS, CASH AND GOLD ORNAMENTS WERE ALSO SEIZED. THE ASSESSEE COULD NOT EXPLAIN THE CASH AND JEWELLERY AND SURRENDERED UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND EXPRESS ED HIS WILLINGNESS TO PAY THE TAX ON THE SURRENDERED UNDIS CLOSED INCOME. THE ASSESSEE SIGNED THE STATEMENT AFTER REG ARDING AND UNDERSTANDING THE STATEMENT WITHOUT ANY COERCIO N AND THE STATEMENT WAS COUNTER-SIGNED BY HIS THREE SONS. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AND ASSESSED THE UNDISCLOSED INCOME RATEABLY ALLOCATING RS.7,50,000 AS UNDISCLOSED INCOME OF EACH ASSESSEE AT THE REQUEST OF THE ASSESSEE. THE ASSESSING OFFICER INCL UDED THE AMOUNT OF UNDISCLOSED INCOME OFFERED BY THE ASS ESSEE BESIDES SPECIFIC ADDITIONS BASED ON MATERIAL, WHICH THEY COULD NOT EXPLAIN. THE COMMISSIONER (APPEALS) HELD THAT THE AMOUNT OF UNDISCLOSED INCOME OFFERED IN THE BLO CK RETURN WAS MORE THAN THE SPECIFIC ADDITIONS MADE IN THE CASE OF THE ASSESSEE AND HIS SONS. THE TRIBUNAL HEL D THAT THE ADMISSION THOUGH AN EXTREMELY IMPORTANT PIECE O F EVIDENCE WAS NOT CONCLUSIVE AND IT WAS OPEN TO THE ASSESSEE TO SHOW THAT IT WAS INCORRECT. SINCE THE S TATEMENT UNDER SECTION 132(4) OF THE INCOME-TAX ACT, 1961, W AS REBUTTABLE AND IT WAS EXPLAINED BY THE ASSESSEE AT A LATER STAGE THERE WAS NO INFIRMITY IN THE ORDERS OF THE COMMISSIONER (APPEALS). THE TRIBUNAL DELETED THE ADDITION. ON APPEAL: HELD, ALLOWING THE APPEAL, THAT THE ASSESSING OFFIC ER HAD ASSIGNED COGENT REASONS FOR NOT ACCEPTING THE RETRACTION OF THE STATEMENT UNDER SECTION 132(4) BY THE ASSESSEE. WITHOUT MEETING THE REASONING OF THE ASSE SSING OFFICER FOR NOT ACCEPTING THE EXPLANATION OF THE AS SESSEE THE ORDER WAS REVERSED AND THE EXPLANATION WAS ACCE PTED ON A GROUND WHICH WAS NEVER AGITATED BY THE ASSESSE E BEFORE ANY OF THE FORUMS. THUS, THE ASSESSEE HAD FA ILED TO DISCHARGE THE ONUS OF PROVING THAT THE CONFESSION M ADE BY HIM UNDER SECTION 132(4) WAS AS A RESULT OF INTIMID ATION, ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 16 DURESS AND COERCION OR THAT IT WAS MADE AS A RESULT OF MISTAKE BELIEF OF LAW OR FACTS. 5.1 THE ASSESSEE INSTEAD OF EXPLAINING THE SEIZED P APERS MADE OUT A CASE THAT ONLY INCOME MAY BE COMPUTED AGAINST THE RECEIPTS BUT THE ASSESSEE FAILED TO EXPLAIN THE STATEMENT MADE D URING THE COURSE OF SURVEY IN WHICH THE ASSESSEE EXPLAINED RECEIPT O F UNACCOUNTED INCOME ON ACCOUNT OF ON MONEY FROM CONSTRUCTION OF VARIOUS RESIDENTIAL SCHEMES AND PROJECTS. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCES OF EXPENSES PAID WHICH WERE RECORDED IN THE SEIZED PAPERS. THOUGH THE ASSESSEE CLAIMED IN SUBSEQUENT S TATEMENT ABOUT EARNING OF THE PROFIT BUT NO EVIDENCES HAVE BEEN FI LED TO EXPLAIN INCURRING OF THE EXPENSES. NO CLAIM OF PROFIT WAS M ADE IN THE INITIAL STATEMENT RECORDED DURING THE COURSE OF SURVEY AND THE ASSESSEE NEVER DISPUTED VOLUNTARY STATEMENT MADE DURING THE COURSE OF SURVEY. THE ASSESSEE NEVER RETRACTED FROM THE STATE MENT MADE DURING THE COURSE OF SURVEY AND HAS NEVER MADE ALLE GATION AGAINST THE REVENUE DEPARTMENT FOR DURESS OR COERCION WHILE MAKING THE STATEMENT DURING THE COURSE OF SURVEY. THE ASSESSEE NEVER ALLEGED ANY MISTAKE OF FACT OR LAW WHILE MAKING SURRENDER O F RS.1 CRORES ON ACCOUNT OF UNACCOUNTED INCOME. ADDITIONS ARE BASED ON THE SEIZED PAPERS WHICH HAVE NOT BEEN EXPLAINED BY THE ASSESSE E. THE ASSESSEE ADMITTED ALL UNDISCLOSED INCOME IN HIS STA TEMENT RECORDED DURING THE COURSE OF SURVEY WHICH PERTAINED TO THE PROJECTS OF THE ASSESSEE. SINCE, THE DETAILS OF EXPENSES HAVE NOT B EEN EXPLAINED AND NO CORROBORATIVE EVIDENCES IN SUPPORT OF THE EX PLANATION HAVE BEEN FILED, THEREFORE, THE AUTHORITIES BELOW WERE J USTIFIED IN TAKING ADVERSE VIEW AGAINST THE ASSESSEE. SINCE, NO DOCUME NTARY ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 17 EVIDENCES HAVE BEEN FILED TO EXPLAIN THE ADDITIONS, THEREFORE, REASONING OF THE AO IN MAKING THE ADDITIONS HAVE NO T BEEN REBUTTED THROUGH ANY EVIDENCES. THUS, ONUS UPON THE ASSESSEE TO EXPLAIN THE SEIZED PAPERS HAS NOT BEEN DISCHARGED. NO TELESCOPI NG BENEFIT CAN BE GIVEN TO THE ASSESSEE OF THE OTHER ADDITIONS BEC AUSE THE ADDITIONS ARE BASED ON THE SEIZED PAPERS WHICH ARE SUPPORTED BY VOLUNTARY STATEMENT OF THE ASSESSEE SURRENDERING RS.1 CRORES DURING THE COURSE OF SURVEY. CONSIDERING THE ABOVE DISCUSSIONS AND THE FACT THAT EVEN DURING THE COURSE OF ARGUMENTS BEFORE US NO DO CUMENTARY EVIDENCES HAVE BEEN FILED TO EXPLAIN THE ABOVE ADDI TIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITIONS OF RS.42,97,627/-, RS.22,0 6,000/-,RS.22,40,000/- AND RS.17,46,000/-. THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT ARE CONFIRMED AND THESE GROUNDS OF THE APPEAL OF THE AS SESSEE ARE DISMISSED. 6. HOWEVER, AS REGARDS THE CASH FOUND DURING THE CO URSE OF SURVEY OF RS.2,02,850/-, THE ASSESSEE HAD ALREADY D ISCLOSED THE AMOUNT OF RS.4,95,650/- AS HIS INCOME. THEREFORE, S UCH BENEFIT SHALL HAVE TO BE GIVEN TO THE ASSESSEE; OTHERWISE, IT WOU LD AMOUNT TO DOUBLE TAXATION. THE ORDERS OF THE AUTHORITIES BELO W TO THAT EXTENT ARE SET ASIDE AND ADDITION OF RS.2,02,850/- IS DELETED. PART OF THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7. NO OTHER POINT IS ARGUED OR PRESSED. ITA NO.2631/AHD/2009 NARSINGBHAI CHUNILAL PATEL VS DCIT (OSD), CIR-9, AH MEDABAD 18 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 20/10/2011 SD/- SD/- (A. L. GEHLOT) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD
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