DR. SANDEEP INDRAKUMAR DANKHADE, AMRAVATI V. ASST. COMMISIONER OF INCOME TAX , AMRAVATI

ITA 328/NAG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7489 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Retraction
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 328 /NAG. / 2017 ( ASSESSMENT YEAR : 2010 - 11 ) DR. SANDEEP INDRAKUMAR DANKHADE MATRUKRIPA CHILD CLINIC AND PATHOLOGY LAB, SHRI KRUSHNA PETH, AMRAVATI PAN AFBPD 7513 F APPELLANT V/S ASST. CIT, AAYAKAR BHAVAN ABAPETH, AMRAVATI, MAHARASHTRA PIN: 444 601 .... RESPONDENT A S SESSEE BY : SHRI K. P. DEWANI REVENUE BY : SHRI GITESH KUMAR DATE OF HEARING 07.05.2018 DATE OF ORDER 14.06 .2018 O R D E R PER SHAMIM YAHYA , A .M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1, NAGPUR D ATED 27.06.2017 AND PERTAINS TO ASSESSMENT YEAR 2010 - 11. 2. T HE GROUNDS OF APPEAL READ AS UNDER : 1. THE LEARNED CIT(A) ERRED IN UPHOLDING ADDITION OF RS. 10,03, 100 / - OUT OF TOTAL ADDITION MADE BY A.O. 2. THE LEARNED CIT (A) ERRED IN UPHOLDING ADDITION OF RS. 10,03,100/ - ON ACCOUNT OF 'INCOME DECLARED IN SURVEY PROCEEDINGS INSPITE OF THERE BEING NO EVIDENCE ON RECORD FOR THE SAME . 3. T HE ADDITION SUSTAINED AT RS. 10,03,100 / - IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 4. THE HON'BLE CIT(A) AND A.O. OUGHT TO HAVE ACCEPTED THE INCOME AS DECLARED IN RETURN OF INCOME. 3. B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A MEDICAL PRACTITIONER. A SURVEY U/S 133A OF THE ACT HAS BEEN CONDUCTED ON 17/08/2009 BY THE ADIT(LNV.), AKOLA AT THE 2 ITA NO. 328/NAG./2017 BUSINESS PRE MISES OF THE ASSESSEE AND HIS SISTER DR. SMT. SARIKA RITESH CHOUDHARY. DURING THE SURVEY OPERATIONS, THE ASSESSEE AN D DR. (SMT.) SARIKA RITESH CHOUDHARY HAVE DECLARED RS.35,00,000/ - AND RS. 5,00,000/ - RESPECTIVELY AS THEIR ADDITIONAL INCOME F OR THE YEAR UN DER CONSIDERATION . DR. SARIKA R. CHOUDHARY IS FOUND TO HAVE PAID THE ENTIRE AMOUNT OF ADVANCE TAX PAYABLE BY HER AS PER DECLARATION OF ADDITIONAL INCOME OF RS.5,00,000/ - ADMITTED DURING THESE SURVEY OPERATIONS. IN CASE OF THE ASSESSEE , RETURN HAS BEEN FILE D ON 01 . 10 . 2010 DECLARING INCOME OF RS.17,83,840/ - WHICH INCLUDES RS.15,00,000/ - UNDER THE HEAD INCOME FROM OTHER SOURCES ON ACCOUNT OF DECLARATION MADE IN SURVEY BUT RETRACTED LATER ON VIDE LETTER DT. 10/11/2009 INFORMING THE ASSESSING OFFICER THAT AFTER CONSULTATION WITH HIS LEGAL ADVISOR, HE HAS ESTIMATED TO DISCLOSE RS,15,00, 000 / - IN PLACE OF RS.35,00,000/ - FOR THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED THAT HIS EARLIER ESTIMATION OF RS.35,00, 000 / - HAS BEEN FOUND TO BE NOT ONLY EXORBITANT BUT HAS BEEN MADE OUT OF UNWARRANTED FEAR AND HONEST PROBABILITY OF ANY OMISSION AND COMMISSION. THE ASSESSING OFFICER HAS NOT ACCEPTED THE ASSESSEE 'S SUBMISSIONS ON THE GROUND THAT ASSESSEE 'S RETRACTION IS NOTHI NG BUT AN AFTERTHOUGHT. BY PLACING RELIANCE ON DECISION S IN CASES OF V. KUNHAMBU & SONS VS CIT (1996) 219 ITR 235/ 86 TAXMAN 477 (KER.), THE ASSESSING OFFICER HAS ASSESSED ASSESSEES BUSINESS INCOME AT RS.38,92,421/ - IN PLACE OF DECLARED AT RS.3,92,421/ - B Y MAKING ADDITION OF RS.35,00,000/ - THEREIN. INCOME FROM OTHER SOURCES HAS, ACCORDINGLY, BEEN TAKEN AT RS.14,031/ - IN PLACE OF RS.15,14,031/ - SHOWN BY THE ASSESSEE . 4. UP ON THE ASSESSEE'S APPEAL , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) G RANTED PART RELIEF TO THE ASSESSEE BUT HE SUSTAINED AROUND RS.10 LACS BY HOLDING AS UNDER: 3 ITA NO. 328/NAG./2017 4.0 APPELLANT'S SUBMISSIONS ALONG WITH ASSESSMENT ORDER AND RECORDS HAVE BEEN CONSIDERED CAREFULLY. STATEMENT OF THE APPELLANT RECORDED DURING THE COURSE OF SURVEY ALONG WITH RECORDS HAVE ALSO BEEN PERUSED. AMOUNT OF RS.14,69,970 / - HAS BEEN WORKED OUT, ADMITTED AND VOLUNTARILY OFFERED FOR TAXATION BY THE APPELLANT HIMSELF AS HIS ADDITIONAL BUSINESS/ PROFESSIONAL INCOME. THE SAME HAS BEEN COMPUTED ON THE BASIS OF OPD REGISTER AND RECEIPTS/ INDOOR SHEETS FOR FIRST FOUR MONTHS OF THE YEAR UNDER CONSIDERATION. THE APPELLANT IS FOUND TO HAVE SHOWN LESS RECEIPTS IN HIS BOOKS OF ACCOUNTS, THOUGH FOUND INCOMPLETE DURING SURVEY, EVEN FOR THESE FOUR MONTHS PERIOD. ACCEPTANCE OF UNDISCLOSED PROFESSIONAL RECEIPTS HAS AGAIN BEEN REITERATED BY THE APPELLANT VIDE LETTERS DATED 1970872009 AND 1070972009. IN FACT, THE APPELLANT HAS ALSO PAID ADVANCE TAX OF RS.6,50,000 / - AND HAS AGREED TO MAKE THE PAYMENTS OF REMAINING INSTALMENTS OF AD VANCE TAX BEFORE 31712/2009 IN HIS LETTER DT. 10709/2009. HOWEVER, AFTER A LAPSE OF ABOUT THREE MONTHS, THE APPELLANT HAS SUBMITTED IN HIS LETTER DATED 10/11/2009 STATING THAT THE EARLIER SUBMISSION OF HIS ESTIMATED INCOME OF RS.35,00,000/ - BE TREATED AS W ITHDRAWN AS HE HAS ESTIMATED HIS UNDISCLOSED INCOME AT RS.15,00,000/ - . HOWEVER, NO JUSTIFICATION OR EXPLANATION HAS BEEN GIVEN FOR THIS PARTIAL RETRACTION AND THE BASIS FOR ARRIVING AT UNDISCLOSED INCOME OF RS.15,00,000/ - . THE APPELLANT HAS ALSO FAILED TO BRING ON RECORD ANY EVIDENCE WHATSOEVER TO PROVE THE ALLEGATION OF DURESS, COERCION, INTIMIDATION AS ALLEGED AND SUBMITTED SUBSEQUENTLY. IT IS TO BE NOTED THAT APPELLANT'S SISTER NAMELY DR. SARIKA R. CHOUDHARY HAS MADE NO SUCH ALLEGATION AND HAS, IN FACT, HONOURED HER COMMITMENT OF PAYMENT OF DUE TAXES ON ADDITIONAL INCOME DECLARED AT RS.5 LACS DURING THESE SURVEY OPERATIONS. THE APPELLANT HAS ALSO FAILED TO PROVE THAT THE EARLIER OFFER OF DISCLOSURE HAS BEEN MADE AS A RESULT OF ANY MISTAKEN BELIEF O F LAW OR FACTS WHICH HAVE COME TO HIS NOTICE LATER ON JUSTIFYING THIS PARTIAL RETRACTION. AS PER APPELLANT'S OWN ADMISSION AND DECLARATION OF RS.15,00,000/ - AS UNDISCLOSED INCOME, ALBEIT UNDER THE HEAD INCOME FROM OTHER SOURCES, EARNING OF UNDECLARED BU SINESS/ PROFESSIONAL RECEIPTS CANNOT CERTAINLY BE RULED OUT AND AS FOUND DURING THE COURSE OF SURVEY OPERATIONS. FURTHER THE APPELLANT HAS ALSO NOT BEEN ABLE TO GIVE ANY SATISFACTORY EXPLANATION REGARDING UNACCOUNTED CASH OF RS,9,96,900/ - FOUND AT HIS BUS INESS PREMISES. HOWEVER, APPELLANT'S CONTENTION REGARDING DOUBLE TAXATION OF THIS AMOUNT ARE FOUND ACCEPTABLE IN THAT AMOUNT OF RS.35,00,000/ - CONSISTS OF UNDISCLOSED PROFESSIONAL RECEIPTS (RS.14,69,970/ - ), CASH (RS.9,96,900/ - ) AND DISCLOSURE ' FOR COMMISSION AND OMISSION IN BOOKS OF ACCOUNTS (RS.10,00,000/ - ). ADDITION OF THIS AMOUNT HAS RESULTED INTO DOUBLE TAXATION AS BOTH INCOME AND ITS APPLICATION IN FORM OF CASH/ INVESTMENTS HAS BEEN SUBJECTED TO TAX SEPARATELY. 4.1 AFTER PERUSAL OF ENTI RE MATERIAL ON RECORDS, ADDITION OF RS,25,03,100/ - (RS.35,00,000/ - ( - ) 996900/ - ) OUT OF RS.35,00,000/ - MADE BY THE AO IN APPELLANT'S BUSINESS INCOME IS FOUND SUSTAINABLE AND, HEREBY, CONFIRMED. 5. A GAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE L EARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITION IN THIS CASE HAS SOLELY BEEN MADE ON ACCOUNT OF A 4 ITA NO. 328/NAG./2017 STATEMENT OBTAINED ON SURVEY. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THIS STATEMENT HAS BEEN DULY RETRACTED BY THE ASSESSEE. HE STATED THAT THE ADDITION WAS MADE ON THE BASIS OF INCOMPLETE BOOKS AND DEHORSE ANY COGENT MATERIAL FOUND O R REFERRED BY THE REVENUE IN THIS CASE. THE LD. COUNSEL OF THE ASSESSEE FOR THE SUBMITTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GRANTED PART RELIEF BUT HE HAS SUSTAINED AN ADDITION OF RS.10,03,100/ - . 7 . FURTHER, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE R EVENUE HAS NOT FOUND ANY DEFECT IN TH E BOOKS OF ACCOUNTS SUBMITTED. THE SAME HAVE BEEN DULY ACCEPTED BY THE R EVENUE. HENCE , THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT D EHORS E ANY COGENT EVIDENCE , ADDITION ON ACCOUNT OF UNDISCLOSED INCOME CANNOT BE MADE SIMPLY ON THE BASIS OF A STATEMENT O BTAINED UNDER SURVEY. IN THIS REGARD , THE LEARNED COUNSEL OF THE ASSESSEE REFERRED TO A C ATENA DECISIONS AS UNDER , INCLUDING THAT FROM THE HONBLE APEX COURT IN THE CASE OF CIT VS. S. KHADER KHAN SO N [2013] 352 ITR 480 (SC) : 1. M/S. BANSAL CREDITS LTD. (IN ITA NO. 3918/DEL/2013 VIDE ORDER DATED 19.09.2016); 2. CIT VS. S. KHADER KHAN SON [2008] 300 ITR 157 (MAD.); 3. CIT VS. NARESH KUMAR AGARWAL [2014] 369 ITR 171 (AP); AND 4. AVISHKAR INFRASTRUCTURE PVT. LTD. VS. DCIT [2015] 44 CCH 217 (MUM)(TRIB) 8 . PER CONTRA , THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER'S OF AUTHORITIES BELOW. 9 . UPON CAREFUL CONSIDERATION WE NOTE THAT THE ADDITION IN THIS CASE HAS BEEN SOLELY BASED UPON ADMISSION OBTAINED AT THE TIME OF SURVEY. THE SUBMISSION HAS BEEN DULY RETRACTED BY THE ASSESSEE. THE REVENUE HAS NOT FOUND ANY DEFECT IN THE BOOKS OF ACCOUNTS SUB MITTED. NO COGENT MATERIAL HAS BEEN REFERRED FOR THE DISCREPANCY OR INCRIMINATING MATERIAL FOUND RELATING TO THE ADDITION. IN THE SE CIRCUMSTANCES , IN OUR CONSIDERED OPINION , 5 ITA NO. 328/NAG./2017 THAT RATIO FROM THE HONBLE APEX COURT DECISION IN THE CASE OF S. KHADER KHAN SO N (SUPRA) IS APPLICABLE ON ALL FOURS . IN THE ABOVE SAID CASE , THE HONBLE APEX COURT HAS EXPOUNDED THAT DEHORS E CORROBORATIVE MATERIAL THE ADDITION CANNOT BE MADE FOR UNDISCLOSED INCOME SIMPLY BECAUSE OF A STATEMENT OBTAINED UNDER SURVEY. FURTHERMORE , THE OT HER CASE LAWS ON THE S AME ISSUE ARE GERMANE AND SUPPORT THE CASE OF THE ASSESSEE. THE CBDT CIRCULAR REFERRED BY THE LD. COUNSEL OF THE ASSESSEE ALSO SUPPORT THE CASE. IT HAS BEEN MENTIONED IN THE CIRCULAR THAT REVENUE OFFICER S HOULD OBTAINED COGENT MATERIALS INSTEAD OF ONLY OBTAINING ADMISSION, WHICH IS EXACTLY THE CASE HERE. 10 . HENCE IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT , WE S ET ASIDE THE ORDER'S OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN F AVOUR OF THE ASSESSEE. 1 1 . I N THE RESULT , THIS APPEAL BY THE ASSESSEE STANDS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 14.06.2018 . SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR , DATED : 14.06.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR ; (6) GUARD FILE . TRUE COPY BY ORDER ROSHANI , SR. PS ( SR. P.S. / P.S. ) ITAT, NAGPUR