Shri Keyur Arvindbhai Patel-HUF, Ahmedabad V. The Income tax Officer,Ward-7(3), Ahmedabad

ITA 2919/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80357 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 02-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Business income; Retraction
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 2919 / AHD/ 20 1 0 (A SSESSMENT YEAR: 2006 - 07) KEYUR ARVINDBHAI PATEL - HUF 403, SURAGI CARE NR. SARDAR PATEL COLONY, NARANPURA, AHMEDABAD V/S THE ITO, WARD - 7(3), AHMEDABAD ( APPELLANT) (RESPONDENT) PAN: AAHHP 6256J APPELLANT BY : SHRI TUSHAR HEMANI, A.R. RESPONDENT BY : SHRI ROOP CHAND, SR, D.R. ( )/ ORDER DATE OF HEARING : 02 - 09 - 2014 DATE OF PRONOUNCEME NT : 12 - 09 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSE E AGAINST THE ORDE ROF CIT(A) - XVI, AHMEDABAD DATED 16.8.2010 FOR A.Y. 2006 - 07. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A N HUF AND IS ALSO PRO PRIETOR OF PRASANG MULTI SERVIC ES PROVIDER WHICH IS ENGAGED IN THE BUSINESS OF EVENT MANAGEMENT SERVICES. A SURVEY OPERATION U/S. 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS ITA NO 2919/AHD/2010 . A.Y. 2006 - 07 2 PREMISES OF THE ASSESSEE ON 23.12.2005 AND CERTAIN DOCUM ENTS WERE IMPOUNDED. STATE MENT OF SHRI KEYUR ARVINDBHAI PATEL , KARTA OF HUF WAS ALSO RECORDED ON OATH DURING THE COURSE OF SURVEY WHEREIN HE OFFERED AN AMOUNT OF RS. 10 LAC S. ASSESSEE THEREAFTER FILED THE RETURN OF INCOME ON 29.12.2006 DECLARING TO T AL INCO ME AT RS. 2,40,634/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) VIDE OR DER DATED 31.12.2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 11,51,760. AGGRIEVED BY THE ORDER A.O, CIT(A) VIDE ORDER DATED 16.08.2010 GRA NTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, YOUR APPELLANT MOST RESPECTFULLY SUBMITS THAT THE I D. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS BY MAKING ADDITION ON ACCOUNT OF SO CALLED UNDISCLOSED COMMISSION INCOME OF RS. 5,55,354/ - WITHOUT HAVING ANY BASE AND PURELY ON NOTIONAL BASIS AND HON. CIT(A) HAS FURTHER ERRED IN NOT APPRECIATING THE FUL L FACTS OF THE CASE IN PROPER PERSPECTIVE AND FURTHER ERRED IN CONFIRMING SUCH ADDITION BY NOT ACEPTING THE FULL EXPLANATION OFFERED BY THE APPELLANT IN THE MATTER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT THOUGH THE ASSESSEE DURIN G THE COURSE OF SURVEY HAD OFFERED RS. 10 LAC AND HAD AGREED TO PAY THE TAX BUT IN THE RETURN OF INCOME ASSESSEE HAD DISCLOSED COMMISSION INCOME AT RS. 4,44,646/ - ALONG WITH OTHER BUSINESS RECEIPT. THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE BETWEEN T HE AMOUNT OF RS 10 LACS OFFERE D AT THE TIME OF SURVEY AND THE AMOUNT OF RS. 4,44,646/ - OFFERED IN ;THE RETURN OF INCOME. ASSESSEE INTERALIA SUBMITTED THAT HIS COMMISSION INCOME REDUCED BY APPROXIMATELY RS. 5.7 LACS DUE TO REDUCTION IN SALES THROUGH HIM. T HE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O IN VIEW OF THE FACT THAT IN EARLIER YEARS ALSO ASSESSEE HAD SHOWN COMMISSION INCOME OF RS. 10 LACS PER YEAR AND THE PARTIES FROM WHIC H ASSESSEE HAD EARNED IN THE CU RRENT YEAR AND EARLIER YEA RS WERE ALSO THE SAME. ITA NO 2919/AHD/2010 . A.Y. 2006 - 07 3 A.O ALSO NOTED THAT NO DETAILS OR BOOKS OF ACCOUNT OF COMMISSION INCOME HAS BEE N MAINTAINED BY THE ASSESSEE. HE ALSO NOTED THAT T HE INCOME OF RS. 4,44,646/ - WAS SHOWN ONLY IN RESPECT OF COMMISION ON WHICH THE TDS WAS DEDUCTED. HE ACC ORDINGLY CONSIDERED THE DIFFERENCE AMOUNTING TO RS. 5,55,354/ - (BEING THE DIFFERENCE BETWEEN THE AMOUNT DISCLOSED AT THE TIME OF SURVEY OF RS. 10 LACS AND THE AMOUNT OF RS. 4,44,646/ - SHOWN IN THE RETURN OF INCOME) AS UNDISCLOSED COMMISSION FOR THE YEAR. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) UPHELD THE ORDER OF A.O AND CONFIRMED THE ADDITION BY HOLDIN G AS UNDER: - 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND OBSERVATION OF THE A.O. IT IS SEEN FRO M THE RECOR D S HAT FOR THE FINANCIAL YEAR 2003 - 04, THE ASSESSEE HAD EARNED COMMISSION INCOME OF RS. 10,36,600/ - , AND FOR THE FINANCIAL YEAR 2004 - 05, THE ASSESSEE HAD EARNED COMMISSION INCOME OF RS. 10,15, OOO/ - . THIS SHOWN THAT FOR THE LAST TWO ASSESSMENT Y EARS ALSO, THE ASSESSEE HAD EARNED COMMISSION INCOME OF MORE T HAN RS. 10 LAKHS. THE SUR V EY HAS BEEN CONDUCTED DURING THE MONTH OF DECEMBER AND THEREFORE, THE APPELLANT WOULD HAVE FAIRLY GOOD KNOWLEDGE AS T O WHAT IS ITS TOTAL COMMISSION INCOME ALREADY EARNE D AND WHAT IS LIKELY TO BE EARNED IN THE NEXT THREE MONTHS. THE APPELLANT IS IN THE BUSINESS OF EVENT MANAGEMENT, AND IN SUCH CASES, NORMALLY THE BOOKINGS ARE DONE AT/EAST THREE TO FOUR MONTHS IN ADVANCE. THEREFORE, SHOWING LESS THAN EVEN RS. FIVE LACS AGA INST THE DECLARATION OF RS. 10 LAKHS CLEARLY SHOWS THAT THE APPELLANT HAS SUPPRESSED THE RECEIPTS. IT IS FURTHER SEEN THAT AFTER THE SURVEY, THE APPELLANT HAS NOT WITHDRAWN THE DECLARATION. THE SURVEY WAS CARRIED OUT IN THE MONTH OF DECEMBER AND FOR THE NE XT 8 TO 9 MONTHS, THE DECLARATION WAS NOT RETRACTED. EVEN WHEN THE FINANCIAL YEAR ENDED IN THE MARCH 2006 STILL, THE APPELLANT DID NOT CON SIDE R ED IT NECESSARY TO RETRACT THE STATEMENT GIVEN DURING THE CAUSE OF SURVEY PROCEEDINGS. IT IS FURTHER IMPORTANT TO NOTE THAT THE APPELLANT HAS NOT MAINTAINED ANY REGULAR COURSE OF BOOKS OF ACCOUNT HAS DECLARED THE COMMISSION INCOME ONLY WIH RESPECT TO THE CERTIFICATES FOR TAX DEDUCTION AT SOURCE. IN VIEW OF THIS REASON I AGREE WITH THE A.O THAT THE APPELLANT HAS GIVEN NO BASIS FOR RETRACTING THE STATEMENT AFTER ALMOST 8 - 9 MONTHS AT THE TIME OF FILING OF INCOME TAX RETURN. IT IS SETTLED LAW THAT IF THE DECLARATION IS COERSIVE OR WRONG, THEN THE APPELLANT SHOULD HAVE WITHDRAWN THE STATEMENT WELL WITHIN T IME AND NOT AFTER SEVERAL MONTHS AS AN QFTERTHOU GH T . THE CASE LAWS RELIED UPON BY THE APPELLANT ARE THEREFORE NOT RELEVANT IN VIEW OF THE FACT THAT THE APPEL LANT HAS WITHDRAWN THE STATE MEN T , MUCH LATER, AFTER A LAPSE OF ALMOST 8 TO 9 MONTHS. IN VIEW OF THIS REASON, THE ADD ITION MADE BY THE A. O IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 5. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US THE LD A.R. SUBMITTED THAT SHRI KEYUR P ATEL THE KARTA OF HUF IN HIS STATEMENT RECORDED ON 24.01 .2006 HAD SUBMITTED THAT HIS GROSS INCOME FOR THE YEAR WOU LD BE APPROXIMATELY RS. 10 LACS. HE FURTHER SUBMITTED THAT THE AMOUNT OF COMMISSION RECEIPT SHOWN BY THE ASSESSEE IN THE RETURN OF ITA NO 2919/AHD/2010 . A.Y. 2006 - 07 4 INCOME WAS CORRECTLY SHOWN AFTER CONSIDERING THE EXPENSES INCURRED TO EARN SUCH COMMISSION. HE FURTHER SUBMITTED THAT THE STATEMENT RECORDED U/S 133A OF THE ACT HAS NO EVIDENTIARY VAL UE AND ANY ADMISSION MADE IN SUCH STATEMENT CANNOT BE MADE BASIS OF ADDITION FOR WHICH HE PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. S. KHADER KHAN S ONS 300 ITR 157 (MADRAS) WHICH HAS BEEN AFFIRMED BY HO N BLE SUPREME COURT IN THE DECISION REPORTED IN 254 CTR 228. HE FURTHER SUBMITTED THAT APART FROM THE STATEMENT , NO OTHER EVIDENCE HAS BEEN FOUND TO SUPPORT THE ADDITION. HE TH EREFORE SUBMITTED THAT THE ADDITION MADE BY THE A.O AND CONFIRMED BY CIT(A) BE DELETED. ON THE REASON FOR NON RETRACTION OF STATEMENT, A.R. SUBMITTED THAT SINCE THE STATEMENT MADE U/S 133A DID NOT HAVE ANY EVIDENTIARY VALUE THEREFORE NO RETRACTION WAS MADE BY ASSESSEE. THE LD D.R ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THA T DURING THE COURSE OF SURVEY THE KARTA OF ASSESSEE HUF ADMITTED TO HA VE EARNED COMMISSION INCOME OF RS. 10 LACS BUT IN THE RETURN OF INCOME ASSESSEE HAD DISCLOSED COMMISSION RECEIPT OF RS. 4,44,646/. CIT(A) WHILE CONFIRMING THE ADDITION HAS NOTED THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS WITH RESPECT TO THE COM MISSION INCOME AND THE ASSESSEE HAD DECLARED COMMISSION INCOME ONLY WITH RESPECT TO THE CERTIFICATE FOR WHICH TDS WAS DEDUCTED. BEFORE US, LD A.R. HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CIT(A ). BEFORE US, THE ASSESSEE HAS ALSO NOT PLACED ON RECORD THE DETAILS OF EXPENSES WHICH IT HAD INCURRED FOR EARNING THE COMMISSION INCOME. IT IS ALSO A FACT THAT THE STATEMENT MADE AT THE TIME OF SURVEY WAS NOT RETRACTED BY THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS AND MORE SO IN VIEW OF THE FACT THAT THE ITA NO 2919/AHD/2010 . A.Y. 2006 - 07 5 ADDITION MADE BY REVENUE IS BASED ON THE STATEMENT RECORDED AT THE TIME OF SURVEY AND BUT THE SAME TIME IN THE ABSENCE OF DETAILS OF EXPENDITURE INCURRED BY THE ASSESSEE TO EARN THE COMMISSION INCOME, WE ARE OF THE VIEW THAT ENDS OF JUSTICE SHALL BE MET IF THE ADDITION IS ESTIMATED . WE THUS RESTRICT THE ADDITION TO RS. 3 LACS INSTEAD OF 5,55,354/ - MADE BY THE A.O. WE DIRECT ACCORDINGLY. IN THE RESULT, THIS GROUND OF ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 09 - 201 4 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGIS TRAR ITAT,AHMEDABAD