The ACIT, Ujjain V. Shri Ghewarchand Jain, Dewas

ITA 326/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47840 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESH
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.326/IND/2010 A.Y. 2006-07 ACIT-1(1), UJJAIN APPELLANT VS GHEVAR CHAND JAIN, KHATEGAON, DEWAS PAN ABGPJ 6081 C RESPONDENT AND, ITA NO.354/IND/2010 A.Y. 2006-07 ACIT-1(1), UJJAIN APPELLANT VS RAMESH CHANDRA JAIN, 51, MAHAVEER MARG, KHATEGAON, DEWAS PAN AEGPJ 6088 M RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI S.S. DESHPANDE, CA O R D E R 2 PER JOGINDER SINGH, JUDICIAL MEMBER BOTH THESE APPEALS ARE BY THE REVENUE AGAINST THE D IFFERENT ORDERS OF THE LEARNED CIT(A)-UJJAIN, DATED 10.3.201 0. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD S MT. APARNA KARAN, LEARNED SENIOR DEPARTMENTAL REPRESENT ATIVE AND SHRI S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE. THE C RUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE FACTS AND THE ISSUES ARE IDENTICAL IN BOTH THE APPEALS. IT WAS CONTENDED THAT THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS.11,90,089/- (EACH) MADE BY THE A SSESSING OFFICER ON THE PREMISE THAT THE AMOUNTS APPEARING IN THE RETUR NS ARE FACTUALLY INCORRECT. IT WAS FURTHER SUBMITTED THAT THE DETAIL S OF THE BUSINESS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. A PL EA WAS ALSO RAISED THAT THE AMOUNT OF RS.23,80,178/- (RS.37,70,344 R S.13,90,166) REMAINED TO BE TAXED, THEREFORE, THE 50% OF THIS AM OUNT I.E. RS.11,90,089/- (EACH) WAS RIGHTLY ADDED IN THE HAND S OF THE RESPECTIVE ASSESSEE. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE STR ONGLY DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT FOR ASSESSMEN T YEAR 2005-06, NECESSARY DIRECTIONS HAVE ALREADY BEEN ISSUED TO TH E ASSESSING OFFICER AND THE IMPUGNED ADDITION FOR ASSESSMENT YEAR 2006- 07 WAS RIGHTLY DELETED. 3 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGE D IN THE BUSINESS OF KIRANA AND MONEY LENDING. THE ASSESSEE DECLARED INC OME OF RS.7,88,250/- IN ITS RETURN AGAINST WHICH THE ASSES SMENT WAS COMPLETED AT RS.19,78,340/-. A SURVEY U/S 133A WAS CARRIED OU T AT THE BUSINESS PREMISES OF THE ASSESSEE ON 9.1.2006. DURING SURVEY OPERATION, THE ASSESSEE SURRENDERED RS.12,67,500/- (EACH), BEING 5 0% OF RS.25,35,000/-, COMPUTED AFTER GIVING A BENEFIT OF CLOSING CAPITAL OF RS.12,34,953/-. THESE ASSETS WERE IN THE NAMES OF S HRI GHEVAR CHAND JAIN AND SHRI RAMESH CHANDRA JAIN AND THEIR WIVES. AS PER THE REVENUE, THE BALANCE AMOUNT OF RS.23,80,178/- REMAI NED UNEXPLAINED. THE CONCLUSION DRAWN BY THE LD. CIT(A) AS CONTAINED IN PARA 5.2 (PAGE 4) IS REPRODUCED HEREUNDER: 5.2 ON EXAMINATION OF THE FACT OF THE CASE AS WELL AS CONSIDERING THE RIVAL SUBMISSIONS ON THE ISSUE, IT IS OBSERVED THAT THE APPELLANT AND HIS FA MILY MEMBERS QUIETLY FURNISHED THEIR RETURNS FOR ASSESSMENT YEAR 05-06. IN THEIR RETURNS, THERE IS N O MENTION OF ANY DISCLOSURE OF UNEXPLAINED ASSETS FOUND AT THE TIME OF SURVEY OPERATION. THE RETURNS ARE APPEARING AS IF THE REGULAR INCOME HAS BEEN SHOWN I N THEM. EVEN AT THE TIME OF ASSESSMENT PROCEEDINGS, NO ATTEMPT WAS MADE BY THE APPELLANT TO CORRELATE THE ASSETS FOUND AT THE TIME OF SURVEY OPERATION WI TH THE RETURNS FILED BY HIM AND OTHER FAMILY MEMBERS F OR ASSESSMENT YEAR 05-06. ON THE OTHER HAND, THE ASSESSING OFFICER WITHOUT GOING INTO THE DETAILS OF ASSETS FOUND AT THE TIME OF SURVEY OPERATION JUST 4 RELIED UPON THE STATEMENT OF APPELLANT RECORDED AT THE TIME OF SURVEY PROCEEDINGS. IN THE APPELLATE PROCEEDINGS, A CHART HAS BEEN PREPARED BY THE APPELLANT GIVING THE DETAILS OF ALL THE ASSETS FOUN D IN THE NAME OF FOUR PERSONS WHICH HAS BEEN VERIFIED BY THE ASSESSING OFFICER ALSO. HOWEVER, IT HAS NOT BEE N ASCERTAINED WHETHER THE ASSET SHOWN IN THE ASSESSMENT YEAR 05-06 IN THE NAMES OF FOUR MEMBERS OF THE FAMILY ARE FULLY EXPLAINED OR THE INVESTMENT ON THESE ASSETS ACTUALLY PERTAINED TO ASSESSMENT YEAR 05-06. ON THE FACE OF IT, SINCE THE TOTAL ASSETS FOUND AT THE TIME OF SURVEY AND AS DISCLOSED BY THE APPELLANT AND HIS FAMILY MEMBERS I N TWO ASSESSMENT YEARS (05-06 & 06-07) TALLY, PRIMA- FACIE THE BENEFIT OF ASSETS SHOWN BY THE APPELLANT IN ASSESSMENT YEAR 05-06 SHOULD BE GIVEN. HOWEVER, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE INVESTMENT IN EACH AND EVERY ASSETS SHOWN IN ASSESSMENT YEAR 05-06 IN THE NAME OF FAMILY MEMBERS AND IN CASE THE INVESTMENTS PERTAINS TO ASSESSMENT YEAR 05-06 ONLY IN THEIR RESPECTIVE NAMES, NO FURTHER ACTION IS REQUIRED TO BE TAKEN. HOWEVER, IN CASE OF ANY DISCREPANCY, SUITABLE ACTIO N MAY BE TAKEN FOR ASSESSMENT YEAR 05-06 AND IF INITI AL INVESTMENT IN THE ASSETS BELONGED TO EARLIER YEARS, SUITABLE ACTION IN THAT PARTICULAR YEAR IN WHICH TH E INVESTMENT WAS MADE IN THE ASSETS MAY BE TAKEN. 4. IT IS CLEAR FROM THE ORDERS OF THE LOWER AUTHORITI ES THAT DURING THE COURSE OF SURVEY, THE TOTAL ASSETS OWNED BY THE ASSESSEE WERE WORKED OUT AND AFTER GIVING DUE CREDI T FOR CLOSING CAPITAL, THE ASSESSEE HIMSELF HAS COME-FORW ARD AND SURRENDERED RS. 12,67,500/- IN RESPECT OF EACH OF THEIR SHARES IN THE ASSETS SO OWNED. HOWEVER, IN THE RETURN OF INCOME THE ASSESSEE HAS ONLY DECLARED INCOME OF RS.7,88,250/- AND DID 5 NOT INCORPORATE THE AMOUNT SURRENDERED DURING THE C OURSE OF SURVEY. THE ASSESSING OFFICER ALSO OBSERVED THAT EV EN THE RETURNS FILED BY FAMILY MEMBERS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 NOWHERE CONTAIN THE FIGURE OF SURRENDERED INCOME. THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) HAS OBSERVED THAT WHATEVER DISCLOSURE HAS BEEN MADE BY THE ASSESSEE IN THE RETURN OF INCOME OF EAR LIER YEAR I.E. ASSESSMENT YEAR 2005-06 IS REQUIRED TO BE VERI FIED AND DIRECTED THE ASSESSING OFFICER TO VERIFY THE INVEST MENT IN THE ASSETS SHOWN IN THE ASSESSMENT YEAR 2005-06 IN THE NAMES OF FAMILY MEMBERS AND IN CASE THE INVESTMENT PERTAINS TO THE ASSESSMENT YEAR 2005-06 ONLY, NO FURTHER ACTION IS REQUIRED TO BE TAKEN. IT IS PERTINENT TO MENTION HERE THAT THE VALUE OF TOTAL ASSETS OWNED BY THE ASSESSEE WAS ARRIVED AT ON THE DATE OF SURVEY WHICH IS MUCH AFTER 31 ST MARCH, 2005 FOR WHICH THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GI VEN DIRECTION TO VERIFY THE ASSETS OF BOTH THE ASSESSEE S. HOWEVER, THE ASSESSING OFFICER HAS WORKED OUT THE TOTAL ASSE TS AT THE TIME OF SURVEY FOR WHICH THE RELEVANT ASSESSMENT YE AR IS 2006- 6 07. THEREFORE, WE MODIFY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO VERIFY THE ASSETS DISCLOSED DU RING THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2 006-07 AND ALSO TO GIVE CREDIT FOR THE ASSETS ALREADY SHOWN IN THE ASSESSMENT YEAR 2005-06 IF THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF SUCH INVESTMENT. NO CREDIT OF DISCLOSURE MADE BY THE ASSESSEE CAN BE GIVEN IN THE HANDS OF OTHER FAMILY MEMBERS UNLESS THEY ARE ABLE TO EXPLAIN THEIR RESPECTIVE SO URCE. AFTER VERIFYING THE TOTALITY OF FACTS WITH REFERENCE TO T HE RETURNS FILED FOR BOTH THE YEARS, THE ASSESSING OFFICER IS DIRECT ED TO RE-WORK OUT THE UNDISCLOSED INVESTMENT OF THE ASSESSEES (BO TH THE BROTHERS) AND TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WITH THESE DIRECT IONS, THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFICER. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7 ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 31 ST MAY, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.5.2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE !VYAS!