SHRI TIKAM DAS JIVNANI, BILASPUR(CG) V. ACIT- 1(1), BILASPUR(CG)

ITA 28/BIL/2014

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3783 (ITAT-RAIPUR)
• Duration Of Justice: 7 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 16-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Unexplained investment
• Section: 133A

Judgement Text

ACIT - 1(1), BILASPUR. (RESPONDENT) ASSESSEE BY : DEPARTMENT BY : DATE OF HEARING : DATE OF PRONOUNCEMENT : SHRI SUNIL KR. AGRAWAL, CA. SHRI SANJAY KUMAR, DR 02/08/2021. 11 / 1 0 /2021. IN THE INCOME TAX APPELLATE TRIBUNAL RAIPURBENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, HON'BLE ACCOUNTANT MEMBER & SHRI N.K. CHOUDHRY, HON'BLE JUDICIAL MEMBER I. T.A. NO. 28/RPR/2014 (ASST. YEAR : 2007 - 08) TIKAM DAS JIVNANI, VS. PROP. M/S. MAH ADEO DALL MILL, BANDHWAPARA, BILASPUR (CG) PAN NO. AATPJ 0079 M (APPELLANT) O R D E R PER N.K. CHOUDHRY, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 18/11/2010 IMPUGNED HEREIN PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) [FOR SHORT, 'LD. COMMISSIONER], BILASPUR U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') FOR THE A.Y. 2007 - 08. ITA NO. 28/RPR/2014 (TIKAM DAS JIVNANI) 2 2. THE ASSESSEE HAS PREFERRED THE REVISED GROUNDS OF APPEAL WHICH ARE STATED AS UNDER: - 1. THAT THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.2,01,350/ - ON THE COUNT OF EXCESS STOCK FOUND ON SURVEY U/S 133A (I.E. ON 21 - 9 - 06) WHICH WAS ONLY ON THE BASIS OF STATEMENT RECORDED ON OATH, WHEN THE ASSESSEE HAS DULY EXPLAINED THE ALLEGED DIF FERENCE AND THUS, THE ACTION OF THE LD.CIT(A) IS NOT SUSTAINABLE AS PER LAW, AS HELD BY THE JURISDICTIONAL HC OF CHHATTISGARH IN VIJAY KUMAR KESAR (2010) AND IN P.BALASUBRAMANIAN (2013) (MAD HC). 2. THAT THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.1,80,000 ON THE COUNT OF EXCESS CASH FOUND ON SURVEY U/S 133A WHICH WAS ONLY ON THE BASIS OF STATEMENT RECORDED ON OATH, WHEN THE ASSESSEE HAS DULY EXPLAINED THE ALLEGED DIFFERENCE AND THUS, THE ACTION OF THE LD. CIT(A) IS NOT SUSTAINABLE AS PER LAW, AS HELD BY THE JURISDICTIONAL HC OF CHHATTISGARH IN VIJAY KUMAR KESAR (2010) AND IN P.BALASUBRARNANIAN (2013) (MAD HC). 3. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.50,000 ON THE COUNT OF LOW GP, BY COMPARING THE POST - SURVEY MILLING EXPENS ES TO PRE - SURVEY 'MILLING EXPENSES, WHEN THE BOOKS OF ACCOUNT HAS NOT BEEN REJECTED, T HE ACTION OF THE L D CIT(A)IS NOT SUSTAINABLE AS PER LAW, AS HELD BY THE JURISDICTIONAL RAIPUR TRIBUNAL IN ATUL ENTERPRISES ITA NO.2/BLPR/2012 DT.19 - 2 - 16.' 3. HAVING HEARD ON THE GROUNDS RAISED BY THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE GROUND NO.1 AND 2 RELATES TO THE ADDITIONS OF RS.2,01,350/ - ON ACCOUNT OF EXCESS STOCK AND RS.1,80,000 ON THE ACCOUNT OF EXCESS CASH FOUND DURING THE COUR SE OF SURVEY AT THE BUSINESS PREMISES OF THE ASSESSEE, MADE BY THE AO AND SUSTAINED BY THE LD. COMMISSIONER, ON THE BASIS OF STATEMENT OF THE ASSESSEE. ITA NO. 28/RPR/2014 (TIKAM DAS JIVNANI) 3 3.1 IN THIS CASE, SURVEY WAS CONDUCTED IN THE ASSESSMENT YEAR UNDER CONSIDERATION ON DATED 21/09/2006 U/SEC. 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE DURING WHICH EXCESS STOCK OF RS. 3,96,980/ - AND EXCESS CASH OF RS. 2,06,310/ - WAS FOUND. THE ASSESSEE SURRENDERED RS.4.00 LAKHS AS UNEXPLAINED INVESTMENT IN CONSTRUCTION OF THE HOUSE. HENCE, TOTAL A MOUNT OF RS.10,03,290/ - WAS SURRENDERED BY THE ASSESSEE DURING THE COURSE OF SURVEY AS PER THE STATEMENT RECORDED ON OATH. THEREAFTER, BOOKS OF ACCOUNT HAVE BEEN RECONCILED AND ADDITIONAL INCOME OF RS.2,21,940/ - WHICH INCLUDES RS. 1,95,630/ - ON ACCOUNT OF EXCESS STOCK AND RS. 26,310/ - ON ACCOUNT OF EXCESS CASH WAS OFFERED BY THE ASSESSEE FOR TAXATION IN ITS RETURN OF INCOME FILED ON DATED 31/10/2007, BUT THE AO MADE THE ADDITION OF RS.2,01,350/ - ON ACCOUNT OF EXCESS STOCK FOUND AND RS. 1,80,000/ - ON ACCOUNT OF EXCESS CASH FOUND. 3.2 IT IS THE CLAIM OF THE ASSESSEE THAT THE ASSESSEES BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED BY THE AO, HOWEVER, MADE THE AFORESAID ADDITIONS ONLY ON THE BASIS OF STATEMENT RECORDED ON OATH WITHOUT ANY CORROBORATION. THE ASSESSEE FURTHER CLAIMED THAT THOUGH THE ASSESSEE HAD RECONCILED ITS STATEMENT AND MADE THE PART OF THE BOOKS OF ACCOUNT AND OFFERED THE EXPLANATIONS AS WELL, HOWEVER, NEITHER THE RECONCILED STATEMENT NOR THE EXPLANATION WAS ACCEPTED BY THE AUTHORITIES BELOW, WHEREAS IN THE SIMILAR CIRCUM STANCES, THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SATYANARAYAN AGRAWAL [(2009) 319 ITR 396 (CG HC)] ACCEPTED THE SAME EXPLANATION AS VALID EXPLANATION. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHINGRA METAL WORDS [(2010) 328 ITR 384 (DEL. HC)] HAS HELD THAT THE MATERIAL COLLECTED ITA NO. 28/RPR/2014 (TIKAM DAS JIVNANI) 4 AND THE STATEMENT RECORDED DURING THE SURVEY IS NOT A CONCLUSIVE PIECE OF EVIDENCE BY ITSELF. FURTHER, THOUGH AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EV IDENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO HAS MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE CONTENTION OF THE ASSESSEE AND PECULIAR FACTS TO THE EFFECT THAT THE AUTHORITIES BELOW HAVE NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT AND ACCEPTED THE SAME AS CORRECT AND PASSED ITS DECISIONS ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE SURVEY U/SEC. 133A OF THE ACT, WHEREAS IT IS A FACT THAT THE ASSESSEE HAS RETRACTED HIS STATEMENT BY RECONCILING THE BOOKS OF ACCOUNT AND OFFERED THE CORRECT AMOUNT FOR TAXATION IN ITS RETURN OF INCOME. EVEN OTHERWISE, IN THE CASE OF CIT VS. S. KHADER KHAN SON [(2012) 352 ITR 480 (SC)], THE HON'BLE SUPREME COURT HAS HELD THA T AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THAT THE ASSESSEE SHOULD BE GIVEN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS OF ACCOUNT DO NOT CORRECTLY DISCLOSE THE CORRECT STATE OF AFFAIRS . ON THE AFORESAID ANALYZATIONS, WE DEEM IT APPROPRIATE TO DELETE THE ADDITIONS UNDER CONSIDERATION IN GROUND NOS. 1 & 2. CONSEQUENTLY, GROUNDS NOS.1 & 2 ARE ALLOWED. 4. BY WAY OF GROUND NO.3, THE ASSESSEE HAS CHALLENGED THE SUSTAINING THE ADDITION OF RS. 50,000/ - ON ACCOUNT OF LOW GROSS PROFIT BY COMPARING THE 'POST - SURVEY' MILLING EXPENSES TO PRE - SURVEY ITA NO. 28/RPR/2014 (TIKAM DAS JIVNANI) 5 (N.K. CHOUDHRY) JUDICIAL MEMBER MILLING EXPENSES. THE CONTENTION OF THE ASSESSEE IS BASED UPON THE FACT THA T THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN REJECTED AND EVEN OTHERWISE AS PER THE ORDER OF THE CO - ORDINATE BENCH AT RAIPUR IN THE CASE OF ACIT VS. ATUL ENTERPRISES (ITA NO.22/BLPR/2012, DATED 19/02/2016) WHEREIN IT WAS HELD THAT THE AO IS SUPPOS ED TO EXAMINE THE PROFIT OF THE ENTIRE FINANCIAL YEAR, BUT NOT THE TRADING RESULT OF PRE - SURVEY AND POST - SURVEY PERIOD, THE TRIBUNAL HELD THAT THERE SHOULD BE SOME DEFECTS TO BE POINTED OUT BY THE REVENUE DEPARTMENT SO AS TO DISTURB THE PERCENTAGE OF PROFI T DISCLOSED AND THEREFORE IN THE ABSENCE OF SUCH DISCREPANCY, THE ACTION OF THE AO REMAINED UN - SUBSTANTIATED. THE FACTS OF THE INSTANT ISSUE ARE IDENTICAL TO THE FACTS AND ISSUE DECIDED BY THE BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ATUL EN TERPRISES (SUPRA), THEREFORE RESPECTFULLY FOLLOWING THE CONCLUSION DRAWN BY THE CO - ORDINATE BENCH, WE DEEM IT APPROPRIATE TO DELETE THE ADDITION OF RS.50,000/ - MADE BY THE AO AND SUSTAINED BY THE LD. COMMISSIONER. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED ON DATED 11 - 1 0 - 2021 AS PER RULE 34(4) OF IT (APPELLATE TRIBUNAL) RULES. S D/ - SD/ - (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER V R / - ITA NO. 28/RPR/2014 (TIKAM DAS JIVNANI) 6 COPY TO: 1. THE ASSESSEE - TIKAM DAS JIVNANI, PROP. M/S. MAHADEO DALL MILL, BANDHWAPARA, BILASPUR (CG) 2. THE REVENUE - ACIT - 1(1), BILASPUR. 3. LD. CIT(A), BILASPUR (CG). 4. CIT, BILASPUR (CG) 5. THE D.R., RAIPUR. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, RAIPUR (ON TOUR).