Shri Vijay Kumar Sood, Shimla V. DCIT, Chandigarh

ITA 307/CHANDI/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8208 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Business expenditure; Search and seizure; Document seized; Assessment record; Documents seized; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 69C; 11; 15; 271(1)(b); 139; 92; 153A; 22

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 307 TO 312/CHD/2014 ASSESSMENT YEARS : 2006-07 TO 2011-12 SH. VIJAY KUMAR SOOD VS. THE DCIT, CENTRAL CIRCLE- II SHIMLA CHANDIGARH PAN NO. ADNPS8077K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 14.03.2017 DATE OF PRONOUNCEMENT : 22.03.2017 ORDER PER BHAVNESH SAINI, JM ALL THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE DIFFERENT ORDERS OF LD. CIT(A) (CENTRAL), GURGAON DATED 7.2.2 014 FOR ASSESSMENT YEARS 2006-07 TO 2011-12 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL ON RECORD. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT ISSUE IS SAME IN ALL THE APPEALS. BO TH PARTIES HAVE MAINLY ARGUED IN ITA NO. 307/CHD/2014, THEREFORE, FOR THE PURPOSE OF DISPOSAL OF ALL THE APPEALS, THE APPEAL IN ITA NO. 307/CHD/2014 IS DECIDED AS UNDER:- 2 ITA NO. 307/CHD/2014 (ASSESSMENT YEAR 2006-07) 3. IN THIS APPEAL THE ASSESSEE CHALLENGED THE ADDI TION OF RS. 25,72,821/- AS UNEXPLAINED EXPENDITURE. 4. IN THIS CASE SEARCH AND SEIZURE OPERATION WAS CO NDUCTED ON 8.10.2010 AT THE RESIDENTIAL AND BUSINESS PREMISES OF M/S SOO D GROUP OF CASES. THE ASSESSEE WAS ALSO COVERED. THE ASSESSING OFFICER M ADE ABOVE ADDITION IN ASSESSMENT ORDERS U/S 153A READ WITH SECTION 143(3 OF THE INCOME-TAX ACT, 1961. 5. BRIEFLY, THE FACTS OF THE CASE ARE THAT DURING T HE COURSE OF SEARCH AT THE RESIDENCE OF THE ASSESSEE, BOOKS OF ACCOUNT MAR KED AS ANNEXURE A-1 TO A-21 WERE FOUND AND SEIZED. THE DOCUMENTS WERE CONF RONTED TO THE ASSESSEE U/S 132(4) OF THE ACT AND HIS STATEMENT WA S RECORDED WHICH IS PART OF THE ASSESSMENT ORDER. THE ASSESSEE OWNED UP THE ENTRIES RECORDED IN THESE DOCUMENTS AND ADMITTED THAT THEY PERTAIN TO H IS BUSINESS EXPENDITURE. AT THE TIME OF ASSESSMENT THESE DOCUMENTS WERE AGAI N CONFRONTED TO THE ASSESSEE, HE WAS ASKED THE EXPLAIN THE ENTRIES RECO RDED ON THESE DOCUMENTS AND RECONCILE THEM WITH THE BOOKS OF ACCOUNT. THE A SSESSEE EXPLAINED THAT THESE ARE COPIES EXTRACTED FROM THE ASSESSEES DIAR Y WHICH HE NORMALLY CARRIES ALONGWITH HIM DURING HIS TRAVELLING. THE CO NTRACT SITES ARE SPREAD ALL ACROSS THE STATE AND THE ASSESSEE NORMALLY JOTS DOWN VARIOUS ISSUES, BASE CHEQUES ISSUED, CLIENT ENQUIRIES, ESTIMATES OR DERS, BANKERS QUERIES AND VARIOUS OTHER MATTERS IN THE SAME. THE ACTUAL E NTRIES ARE MADE IN THE BOOKS OF ACCOUNT AND DIARY IS USED ONLY TO REMEMBER AND REFRESH THE 3 MEMORY. AT PRESENT THE ASSESSEE IS IN NO POSITION TO FIGURE OUT WHAT WAS ENTERED THEREIN ON THOSE DATES SINCE THE DIARY IS M AINTAINED FOR ONLY SHORT TERM MEMORY AND NOT AS A RECORD. THE ASSESSING OFF ICER NOTED THAT THE ASSESSEE ADMITTED THAT ENTRIES RECORDED IN THE DIAR IES PERTAIN TO HIS BUSINESS ACTIVITY, THEREFORE, ONUS U/S 292 C OF THE ACT IS ON THE ASSESSEE TO EXPLAIN THOSE ENTRIES. SINCE ASSESSEE FAILED TO EXP LAIN ENTRIES AND FAILED TO RECONCILE THE EXPENSES WITH REGULAR BOOKS OF ACCOUN T, THEREFORE, ASSESSING OFFICER MADE ADDITION OF RS. 25,72,821/- U/S 69C O F THE ACT. 6. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT T HESE ENTRIES ARE REFLECTED IN THE BOOKS OF ACCOUNT, THEREFORE, ADDIT ION IS UNJUSTIFIED. THE LD. CIT(A) REMANDED THE MATTER TO THE ASSESSING OFF ICER FOR FILING THE REMAND REPORT. THE ASSESSING OFFICER REFUTED THE AS SESSEES CONTENTION THAT THESE BUSINESS EXPENSES ARE DULY REFLECTED IN THE B OOKS OF ACCOUNT. THE ASSESSEE, HOWEVER, EXPLAINED THAT ASSESSING OFFICER HAS IN FACT ADMITTED TO THESE EXPENSES AS RELATED TO BUSINESS AND SUBSTANTI ATED THOUGH NOT CLEARLY, THEREFORE, ADDITION SHOULD BE DELETED. 7. LD. CIT(A), HOWEVER, REJECTED THE CONTENTION AND DISMISSED THE APPEAL OF THE ASSESSEE. 8. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ENTRIE S CONTAINED IN THE SEIZED PAPERS ARE DULY REFLECTED IN THE REGULAR BOOKS OF A CCOUNT. THE DETAILS OF THE SAME ARE HIGHLIGHTED IN SEPARATE SHEETS. COPY OF TH E DAY BOOK, JOURNAL VOUCHERS AND LAND ACCOUNT HAVE BEEN FILED IN SUPPOR T OF THE SAME. HE HAS 4 SUBMITTED THAT LD. CIT(A) CALLED FOR THE REMAND REP ORT FROM THE ASSESSING OFFICER IN WHICH ASSESSING OFFICER DID NOT DISPUTE THE CLAIM OF THE ASSESSEE. THE ASSESSING OFFICER MERELY CONTENDED THAT COPY OF THE ACCOUNT SUBMITTED BY THE ASSESSEE DO NOT CLEARLY SUBSTANTIATE HIS CLA IM. LD. COUNSEL FOR THE ASSESSEE PREPARED A CHART ON THE BASIS OF SEIZED PA PERS WHICH IS SUPPORTED BY DAY BOOK, JOURNAL VOUCHERS AND LAND ACCOUNT TO S HOW THAT THE ENTRIES CONTAINED IN THE SEIZED PAPERS ARE DULY REFLECTED I N THE REGULAR BOOKS OF ACCOUNT. HE HAS, THEREFORE, SUBMITTED THAT THERE IS NO UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE. HE HAS ALSO F ILED COPY OF THE ORDER SHEET OF THE ASSESSING OFFICER TO SHOW THAT ASSESSI NG OFFICER TOOK UP THE MATTER FOR ASSESSMENT ONLY ON 13.3.2013 AND HEARING WAS ADJOURNED TO 15.3.2013. THE ASSESSMENT ORDER IS PASSED ON 22.3 .2013. THE ASSESSING OFFICER DID NOT PROVIDE ANY SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE ISSUE. WHEN THE ISSUE WAS EXPLAINED BEFORE THE LD. CIT(A), THE ASSESSING OFFICER DID NOT DENY THE EXPLANATION OF T HE ASSESSEE. THE DETAILS FURNISHED BY THE ASSESSEE WERE PROVIDED TO THE LD. DR WHO SOUGHT TIME TO VERIFY WHETHER ALL THE DOCUMENTS FILED IN THE PAPER BOOK BY THE ASSESSEE ARE PART OF THE RECORD OF THE ASSESSING OFFICER / CIT(A). THERE IS NO REBUTTAL TO THE ARGUMENTS OF THE LD. COUNSEL FOR TH E ASSESSEE. 9. THE LD. DR, HOWEVER, RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT SINCE ASSESSEE ADMITTED THE CONT ENTS OF THE SEIZED DOCUMENTS, WHICH HAVE NOT BEEN EXPLAINED, THEREFORE , ADDITION WAS CORRECTLY MADE. LD. DR SUBMITTED THAT ASSESSEE DID NOT COOPERATE WITH THE ASSESSING OFFICER. EVEN BEFORE THE LD. CIT(A), THE ASSESSEE ADMITTED THAT HE IS NOT IN A POSITION TO EXPLAIN THE CONTENTS OF THE SEIZED DOCUMENTS. 5 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE O RDER SHEET OF THE ASSESSMENT RECORD CLEARLY REVEALED THAT ASSESSING O FFICER TOOK ASSESSMENT ONLY ON 13.3.2013 AND FINALLY CONCLUDED THE ASSESSM ENT PROCEEDINGS ON 15.3.2013 AND THEREAFTER PASSED THE ASSESSMENT ORDE R ON 22.3.2013. THEREFORE, NO SUFFICIENT TIME IS GIVEN TO THE ASSES SEE TO EXPLAIN THE CONTENTS OF THE SEIZED PAPERS. THE ASSESSEE FILED D ETAILED REPLY BEFORE THE LD. CIT(A), COPY OF WHICH IS FILED IN THE PAPER BOO K IN WHICH ASSESSEE SPECIFICALLY CLAIMED THAT THESE EXPENSES RELATE TO THE BUSINESS ARE DULY RECONCILED WITH THE REGULAR BOOKS OF ACCOUNT AND DE TAILS OF THE SAME WERE HIGHLIGHTED AND ATTACHED. THE ASSESSING OFFICER IN THE REMAND REPORT BEFORE LD. CIT(A) DID NOT DISPUTE THE CLAIM OF THE ASSESSEE. THE ASSESSING OFFICER MERELY CONTENDED IN THE REMAND REPORT THAT COPIES OF THE ACOCUNT SUBMITTED BY THE ASSESSEE DO NOT CLEARLY SUBSTANTIA TE HIS CLAIM. LD. COUNSEL FOR THE ASSESSEE PREPARED A CHART AS PER TH E CONTENTS OF THE SEIZED DOCUMENTS AND EACH ENTRY IS EXPLAINED THROUGH ENTRI ES IN THE DAY BOOK JOURNAL VOUCHER AND LEDGER ACCOUNT OF ADVANCES (LAN D). IT THEREFORE, SUPPORTS THE EXPLANATION OF THE ASSESSEE THAT ALL T HE EXPENDITURE MENTIONED IN THE SEIZED PAPERS ARE DULY REFLECTED IN THE REGU LAR BOOKS OF ACCOUNT OF THE ASSESSEE. LD. DR DID NOT FILE ANY OBJECTION T O THE DOCUMENTS FILED IN THE PAPER BOOK WERE PART OF THE RECORD OF THE LD. C IT(A). THEREFORE, THE EXPLANATION OF THE ASSESSEE THAT ALL THE EXPENDITUR E MENTIONED IN THE SEIZED PAPERS ARE RECONCILED THROUGH REGULAR BOOKS OF ACCO UNT STANDS ESTABLISHED AND PROVED. THEREFORE, THERE IS NO JUSTIFICATION TO MAKE OR SUSTAIN THE ADDITION AGAINST THE ASSESSEE. WE, THEREFORE, SET A SIDE THE ORDERS OF THE 6 AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 25 ,72,821/-. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA NOS. 308 TO 312/CHD/2014 (FOR AY'S 2007-08 TO 2 011-12): 11. IN ASSESSMENT YEAR 2007-08, THE ASSESSEE DID NO T PRESS GROUND NO.2, THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. O N GROUND NO.3, THE ASSESSEE CHALLENGED THE ADDITION OF RS. 6,71,683/- AS UNEXPLAINED EXPENDITURE. 12. IN REMAINING ASSESSMENT YEARS, THE ASSESSEE CHA LLENGED THE ADDITIONS OF RS. 15,89,500/-, RS. 11,61,450/- RS. 1,43,53,963 - AND RS. 2,79,000/- AS UNEXPLAINED EXPENDITURE. LD. REPRESENTATIVES OF B OTH THE PARTIES SUBMITTED THAT ISSUE IS SAME IN REMAINING APPEALS A S HAS BEEN ARGUED IN ASSESSMENT YEAR 2006-07 IN ITA NO. 307/CHD/2014 IN WHICH WE HAVE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELE TED IDENTICAL ADDITION ON ACCOUNT OF UNEXPLAINED EXPENSES. FOLLOWING THE ORDE R FOR ASSESSMENT YEAR 2006-07, WE SET ASIDE ORDERS OF AUTHORITIES BELOW A ND DELETE ALL THESE ADDITIONS. THESE GROUNDS OF THE APPEALS OF THE ASSE SSEE ARE ACCORDINGLY ALLOWED. 13. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE EXCEPT IN ASSESSMENT YEAR 2007-08, ARE ALLOWED, WHEREAS IN ASSESSMENT YEAR 20 07-08, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND MARCH, 2017 RKK 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR