ACIT, Bhubaneswar V. Subash Chandra Nayak, Bhubaneswar

ITA 312/CTK/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65115 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 07-08-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2012
• Court: TRIBUNAL
• Department Lawyers: G NAIK S K SARANGI ARS
• Assessee Lawyers: S RIMATI PARAMITA TRIPATHY
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Wrong claim; Assessment record

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 312/CTK/2012 / ASSESSMENT YEAR 2004 - 05 ACIT, CIRCLE 1(2), BHUBANESWAR. - - - VERSUS - SRI SUBASH CHANDRA NAYAK, A/16, ASHOK NAGAR, BHUBANESWAR PAN: AAHPN 9344 D ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI G.NAIK/ S.K.SARANGI, ARS / FOR THE RESPONDENT: / S RIMATI PARAMITA TRIPATHY, CIT - DR. / DATE OF HEARING: 07.08.2012 / DATE OF PRONOUNCEMENT: 14.09.2012 / ORDER . . . , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THIS APPEAL IS FILED BY THE DEPARTMENT HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) D T.24.2.2011 FOR THE ASSESSMENT YEAR 2004 - 05 IN THE CASE OF THE ASSESSEE. 2. THE DEPARTMENT HAS PLEADED THE FOLLOWING TWO ISSUES IN THE GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN HOLDING THA T THE ADDITION OF RS.22.O0 TAKHS IS DULY ACCOUNTED FOR BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT, WHEN THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE SAME WITH EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. C1T(A) IS NOT JUSTIFIED TO RESTRICT THE ADDITION TO 50% OF 2,46,000 , WHEN THE ASSESSEE FAILED TO SUBSTANTIATE THE SOURCES OF THE IMPUGNED BANK DEPOSITS. 3. BOTH PARTIES WERE HEARD REGARDING THE ISSUES AND THEIR LEGAL IMPLICATIONS. I.T.A.NO. 312/CTK/2012 2 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HE FILED THE RETURN FOR THE PERIOD UNDER CONSIDERATION DECLARING I NCOME OF 1,55,010 ON 16.3.2005. WHILE SO, ON 15.11.2007 SEARCH AND SEIZURE PROCEEDINGS U/S.132 WAS CONDUCTED BY THE DEPARTMENT IN THE OFFICE PREMISES AND RESIDENTIAL PREMISES OF THE ASSESSEE. THE ASSESSEE IS THE MANAGING DIRECTOR OF M/S.SRUSTI ESTATES PVT . LTD., M/S.SAMBIT RESORTS PVT. LTD., AND ALSO MANAGING TRUSTEE OF M/S.NEMT (NILACHAL EDUCATIN & MANAGEMENT TRUST).DURING THE COURSE OF SEARCH OPERATION INCRIMINATING BOOKS OF ACCOUNT AND DOCUMENTS WERE FOUND AND SEIZED THEREFORE NOTICE U/S.153A(A) WAS IS SUED ON 29.8.2008 AN D SERVED ON THE ASSESSEE 4.9.2008 . IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED RETURN U/S.153A ON 29.9.2008 SHOWING A TOTAL INCOME OF 1,46,600. THEREAFTER ASSESSMENT PROCEEDINGS WERE STARTED BY ISSUING NOTICES U/S.143(2) AND U/S.142(1) . THE LEARNED ASSESSING OFFICER AFTER HEARING THE ASSESSEE AND PERUSING THE DOCUMENTS PRODUCED BEFORE HIM ALONG WITH SRI S.K.SARANGI, FCA,A/R AND AFTER HEARING THEM THE ASSESSMENT ORDER WAS PASSED BY ADDING 30,000 ON ACCOUNT OF BOGUS CLAIM OF STANDARD DEDUCTION, 22,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT, 3,46,000 ON ACCOUNT OF UN EXPLAINED INVESTMENT AND 20,000 ON ACCOUNT OF UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES. 5. HAVING BEEN AGGRIEVED BY THIS ORDER OF ASSESSMENT, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE LEARNED CIT(A) AFTE R HEARING THE ASSESSEE AND CONSIDERING THE MATERIAL MADE AVAILABLE IN THE ASSESSMENT RECORDS AND CONSIDERING THE DECISIONS OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF PROMAIN LTD. V. DCIT (2005) 95 LTD 489 (DEL.)(SB) , M. B. LAL V. CIT (2005) 279 I TR 298 (DEL.) AND ACIT V. CHILKA VYANKATESH SIDRAM (2010) 122 LTD I.T.A.NO. 312/CTK/2012 3 293 (PUNE) , HAS COME TO THE CONCLUSION THAT THE SEARCH CONDUCTED U/S.132 OF THE I.T.ACT,1961 IS VALID. 5.1. THERE AFTERWARDS THE LEARNED CIT(A) EXAMINED THE ISSUE OF DISALLOWANCE OF STANDARD DEDUCTION OF 30,000 AND UPHELD THE SAME. THERE AFTERWARDS, THE LEARNED CIT(A) HAS CONSIDERED THE ISSUE OF ADDITION OF 22 LAKHS UNDER THE HEAD UNEXPLAINED INVESTMENT U/S.69 AND CAME TO THE CONCLUSION THAT THERE IS NO AMBIGUITY THAT THE AMOUNTS HAVE COM E FROM KILT RELATING TO PURCHASE OF LAND FROM/THROUGH THE APPELLANT. THE APPELLANT IS THE GENERAL POWER OF ATTORNEY HOLDER OF SMT. SUKANTI CHAMPATI, THE LAND OWNER. THE APPELLANT WAS TO SELL THE LAND TO KILT IN RESPECT OF LAND HELD BY SMT. SUKANTI CHAMPATI . M/S. KILT HAS NO DEALING S WITH SMT. SUKANTI CHAMPATI DIRECTLY. THE AGREEMENT FOR SALE OF LAND HAS BEEN ENTERED BETWEEN KILT AND THE APPELLANT AS A POWER OF ATTORNEY HOLDER. THE AMOUNT RECEIVED FROM KILT HAS GONE INTO THE BOOKS OF ACCOUNTS OF THE APPELLAN T. HOWEVER, THE QUESTION OF TREATMENT OF INCOME IN THE HANDS OF THE APPELLANT HAS NOT BECOME RELEVANT SINCE THE LAND HAS NOT BEEN SOLD/REGISTERED TO KIIT. EVEN IF THE ASSESSEE HAS ALREADY INVESTED IN THE LAND AFTER MAKING FULL PAYMENT TO SMT.SUKANTI CHAMPA TI, THE LAND OWNER, THE QUESTION OF ASSESSMENT OF INCOME WOULD ARISE ONLY AFTER THE LAND IS SOLD. THE AMOUNT RECEIVED FROM KILT IS BEING SHOWN IN THE BOOKS OF ACCOUNT AS ADVANCES RECEIPT. IN THE AFFIDAVIT DT.13.2.2012 FILED BY THE ASSESSEE, WHEREIN IT IS S TATED THAT DUE TO DEFECTIVE TITLE, SALE DEED HAS NOT BEEN EXECUTED BY HIM IN FAVOUR OF KILT. IN THAT VIEW OF THE MATTER, THE LEARNED CIT(A) CAME TO THE CONCLUSION THAT SOURCE OF RECEIPT OF 22 LAKH S IS NOT AT ALL TO BE DOUBTED. IN THAT VIEW OF THE MATTER, HE DELETED THE ADDITION OF 22 LAKHS. 5.2. THERE AFTERWARDS THE LEARNED CIT(A) HAS CONSIDERED THE ISSUE OF ADDITION OF 3,46,000 AND AFT3R CONSIDERING THE RELEVANT MATERIAL AVAILABLE I.T.A.NO. 312/CTK/2012 4 IN THE ASSESSMENT RECORD IN CONJECTURES OF THE FINDING OF THE ASSESSI NG OFFICER, HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS RELATING TO 1 LAKH DEPOSITED BY CASH IN THE BANK ACCOUNT. HE FURTHER OBSERVED THAT THE AMOUNT OF 2,46,000 WAS RECEIVED BY CHEQUES . HE FOUND THAT THESE ARE THE RECEIPTS FROM LAND DEALINGS AND IN CASE OF LAND DEALINGS THE EXPENDITURE WILL BE ATLEAST 50% OF THE GROSS RECEIPTS AND HENCE, HE CAME TO THE CONCLUSION THAT 1,23,000 OUT OF 2,46,000 IS ONLY TO BE INCLUDED AS INCOME OF THE ASSESSEE IN PLACE OF 3,46,000 ADDED BY THE ASSESSING OFFICER. 5.3. THUS OBSERVING THE LEARNED CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THIS ORDER OF THE CIT(A),THE DEPARTMENT HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL . 7. DURING THE COURSE OF HEARING, THE LEARNED DR HAS VEHEMENTLY ARGUED SUPPORTING THE ORDER PASSED BY THE ASSESSING OFFICER AND ASSAILING THE FINDINGS OF THE LEARNED CIT(A) CONTENDING INTER ALIA THAT THE FINDINGS OF THE LEARNED CIT(A) ARE NOT REASONED ONE AND ALSO NOT SUPPORTED BY ANY MATERIAL EVIDENCE PRODUCED BY THE ASSESSEE. THEREFORE, HE SOUGHT FOR SETTING ASIDE THE ORDER PASSED BY THE CIT(A) BY SUBSTITUTING THE ORDER OF THE ASSESSING OFFICER BY ALLOWING THE DEPARTMENTAL APPEAL. 8. CONTRARY TO THIS, TH E LEARNED AR HAS SUPPORTED THE ORDER PASSED BY THE LEARNED CIT(A) AND SOUGHT FOR DISMISSAL OF THE APPEAL FILED BY THE DEPARTMENT. 9. ON CAREFUL ANALYSIS OF THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IT IS FOUND THAT THE LEARNED CIT(A) HAS THREAD BARE CONSIDERED THE ISSUES RAISED BY THE DEPARTMENT BEFORE THE TRIBUNAL AND HE HAS GIVEN A REASONED ORDER ON THE TWO ISSUES RAISED BY THE DEPARTMENT BEFORE THE TRIBUNAL. ON CAREFUL CONSIDERATION OF THE FINDINGS OF THE LEARNED CIT(A), WE I.T.A.NO. 312/CTK/2012 5 ARE OF THE CONSIDERED VI EW THAT THE LEARNED CIT(A)S DECISION ON THESE TWO ISSUES IS WELL REASONED ONE AND IT IS BASED ON MATERIAL PRODUCED BY THE ASSESSEE BEFORE THE DEPARTMENTAL AUTHORITIES. HENCE, WE FIND THAT THE IMPUGNED ORDER OF THE LEARNED CIT(A) IS NOT INFIRM IN ANY WAY R EQUIRING INTERFERENCE. HENCE, THE SAME IS UPHELD BY FINDING THE ISSUES RAISED BY THE DEPARTMENT AS DEVOID OF MERIT. 10. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. SD/ - SD/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT ME MBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( ) DATE: 14.09.2012 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : ACIT, CIRCLE 1(2), BHUBANESWAR. 2 / THE RESPONDENT: SRI SUBASH CHANDRA NAYAK, A/16, ASHOK NAGAR, BHUBANESWAR 3. / THE CIT, 4. ( ) / THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY TH E SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 03.09 .2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 4.09 .2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 14.09.2012 . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER .. ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY.