The DCIT, Central Circle-2(2), Ahmedabad V. Shri Pradeep Mansingh Mandora, Ahmedabad

ITA 3285/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6561 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWA LA
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Unexplained investment

Judgement Text

ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH,AHM EDABAD. (BEFORE SHRI BHAVNESH SAINI & SHRI D.C. AGRAWAL) I.T .A. NO. 3285/AHD/2009 (ASSESSMENT YEAR 2007-08) DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD. (APPELLANT) VS. SHRI PRADEEP MANSINGH MANDORA, SUGANFLATS, VASNA, AHMEDABAD. (RESPONDENT) C .O. NO. 12/AHD/2010 (ARISING OUT OF ITA NO.3285/AHD/2009) (ASSESSMENT YEAR 2007-08) SHRI PRADEEP MANSINGH MANDORA, SUGANFLATS, VASNA, AHMEDABAD. (APPELLANT) VS. DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD. (RESPONDENT) PAN: AEHPM 9640 P APPELLANT BY : SHRI SAMIR TEKRIWALA,. SR.D.R . RESPONDENT BY : SHRI VIJAY RANJAN. ( (( ( )/ )/)/ )/ ORDER PER: SHRI BHAVNESH SAINI, J.M. THE DEPARTMENTAL APPEAL AS WELL CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT (A)-III, AHMEDABA D DATED 10-9-2009 FOR ASSESSMENT YEAR 2007-08. ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 2 2. THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RE TURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 153C/153A ON 17-12-2008 DECLARING TOTAL INCOME OF RS. 8,96,750/-. THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE BELONG TO THE SIS GROUP, ENGAGED IN ASSEMBLING/TRADING OF COM PUTERS AND PERIPHERALS, WHICH WAS SUBJECTED TO SEARCH U/S. 132/SURVEY ON 14 -12-2007 FROM THE RECORDS SEIZED AT THE OFFICE OF SAI COMP SERVE, SHY AMA CROSS ROAD, AHMEDABAD, PARTICULARLY PAGES 120 TO 140 OF ANNEXUR E A/2 OF THE RELATED PANCHNAMA. THESE PAGES WERE IN RESPECT OF 3 SHOPS L OCATED AT ISCON PLAZA AND REVEALED THAT THE ASSESSEE HAD PAID RS. 15 LAKH S IN CASH TO THE SELLER M/S. DESIGN SHOP. THE SEIZED DOCUMENT PAGE 138 WAS A R ECEIPT AFFIXED WITH REVENUE STAMP WHICH WAS SIGNED BY SHRI RAJESH JAYAN TILAL SHAH, PARTNER OF DESIGN SHOP. IN RESPONSE TO THE QUERY OF THE A.O., ASSESSEE CONTENDED THAT THERE WAS ONLY A PROPOSAL TO PAY THIS AMOUNT IN CAS H TO THE PARTY AND SO PROFORMA CONFIRMATION WAS OBTAINED. THE A.O. HOWEV ER, POINTED OUT THAT THE SELLER I.E. DESIGN SHOP HAD ISSUED A RECEIPT AN D IN FACT HAVE SHOWN THIS AMOUNT IN ITS CASH BOOK WHICH PROVED THAT PAYMENT W AS MADE. THE A.O. ALSO DID NOT ACCEPT THE ALTERNATE PLEA OF THE ASSES SEE THAT THE ADDITIONAL INCOME OFFERED BY HIM OF RS.9 LAKHS SHOULD BE ADJUS TED/SET OFF ON THE GROUND THAT THIS ADDITIONAL INCOME OFFERED WAS ONLY TO BUY PEACE AND WAS NOT CO-RELATED TO ANY ASSET. THE A. O. ACCORDINGLY MADE ADDITION OF RS. 15 LAKHS OF UNACCOUNTED INVESTMENT. IT WAS SUBMITTED B EFORE THE LD. CIT (A) THAT THE ASSESSEE HAD OFFERED A SUM OF RS. 9 LAKHS ON ACCOUNT OF HIS INABILITY TO EXPLAIN THE ENTRIES IN CERTAIN DOCUMENTS WHICH W ERE OTHERWISE ROUGH IN NATURE OR IRRELEVANT. THUS THE ADDITIONAL INCOME HAS BEEN OFFERED TO BUY PEACE WITH THE UNDERSTANDING THAT IF THAT BE CONSID ERED IN CONJUNCTION WITH THE ROUGH NOTINGS AND JOTTINGS AND TELESCOPING OF T HE SAME TO VARIOUS ASSETS. ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 3 THESE FACTS WERE EXPLAINED IN THE NOTES ATTACHED TO THE RETURN OF INCOME AND WAS PART OF THE RECORD. IT WAS EXPLAINED THAT RETUR N HAS BEEN FILED ON THE BASIS OF THE RECORD AVAILABLE. A COPY OF COMPUTATIO N OF INCOME FILED WITH THE RETURN AND OF THE ATTACHED NOTES AS ALSO THE ACKNOW LEDGEMENT OF FILING THE RETURN WAS SUBMITTED BEFORE THE LD. CIT (A). IT WAS ALTERNATIVELY PLEADED THAT AMOUNT OF RS.9 LAKHS ADDITIONALLY OFFERED WAS APPLIED TOWARDS THIS PAYMENT AND TO THAT EXTENT TELESCOPING BENEFIT SHOU LD BE GIVEN TO THE ASSESSEE. IT WAS FURTHER ARGUED THAT THE ADDITIONAL INCOME OFFERED HAD NOT BEEN UTILIZED/ APPLIED TOWARDS ANY OTHER ASSET/EXPE NDITURE IN THE OTHER ASSESSMENT YEARS. IT WAS THEREFORE, SUBMITTED THAT AT THE BEST ADDITIONS SHOULD HAVE BEEN RESTRICTED TO RS.6 LAKHS AND NOT R S.15 LAKHS, OTHERWISE IT WOULD AMOUNT TO DOUBLE TAXATION. 3. THE LD. CIT (A) CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE ACCEPTED THE ALTERNATE PLEA OF THE ASSESSEE AND RESTRICTED T HE ADDITION TO RS.6 LAKHS AS AGAINST RS.15 LAKHS ADDITION MADE BY THE A.O. HIS FINDINGS IN PARAGRAPH 5 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER:- 5. THE CONTENTIONS WERE CAREFULLY CONSIDERED. IT I S SEEN THAT THE SEIZED DOCUMENT PAGE 138 OF ANNEXURE A/2 CLEARLY ES TABLISHES THAT A SUM OF RS.15 LAKHS WAS PAID TO M/S. DESIGN SHOP, IN CASH, AS ADVANCE FOR PURCHASE OF SHOPS NO.F-101/F-102/F-103 AT ISCON PARK. THE RECEIPT OF RS.15 LAKHS IN CASH HAS ALSO BEEN ACCOUN TED BY THE RECIPIENT AND DISCLOSED ACCORDINGLY. THEREFORE, THE PLEA THAT THIS AMOUNT/ DOCUMENT REPRESENTED PROFORMA CONFIRMATION, IS NOT VALID. HOWEVER, IT IS SEEN THAT THE ADDITIONAL INCOME OF RS. 9 LAKH S HAD BEEN OFFERED IN THE RETURN FILED ON 17-10-2008 FOR A.Y. 2007-08, WI TH THE EXPLANATION THAT THIS INCOME OFFERED, NEEDS TO BE CONSIDERED FO R TELESCOPING TO VARIOUS ASSETS OF THE ASSESSEE/ GROUP MEMBERS. THE ADDITIONAL INCOME HAS NOT BEEN SET OFF AGAINST OTHER ASSETS IN OTHER ASSESSMENT YEARS. ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 4 THEREFORE, THE CONTENTION THAT THIS ENTIRE ADDITION AL INCOME WAS APPLIED TOWARDS ACQUISITION OF THESE 3 SHOPS, IS AC CEPTED IN THE FACTS EXPLAINED. AS SUCH, THE ALTERNATE PLEA THAT THE ADD ITION SHOULD HAVE BEEN RESTRICTED TO RS.6 LAKHS ONLY, IS ALLOWED. THE ADDITION OF RS.15 LAKHS IS THEREFORE RESTRICTED TO RS.6 LAKHS. 4. THE LD. D.R. RELIED UPON THE ORDER OF THE ASSESS ING OFFICER AND SUBMITTED THAT ASSESSEE FAILED TO CO-RELATE THE DIS CLOSURE OF RS.9 LAKHS TOWARDS ASSET THEREFORE, THE LD. CIT (A) SHOULD NOT HAVE DELETED THE ADDITION OF RS.9 LAKHS. 5. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO PAPER BOOK PAGE-1 WHICH IS ORIGINAL RETURN OF INCOME FILED AT RS.75,543/- AND ALSO REFERRED TO THE RETURN OF INCOME DATED 17-12-2008 F ILED IN RESPONSE TO NOTICE U/S.153C OF THE ACT AND COMPUTATION OF INCOME IN WH ICH ASSESSEE OFFERED ADDITIONAL INCOME OF RS.9 LAKHS AND A NOTE IS ALSO ATTACHED TO THE RETURN OF INCOME TO SHOW THAT RS.,9 LAKHS IS OFFERED AS ADDIT IONAL INCOME ON ACCOUNT OF THE DOCUMENT FOUND DURING THE COURSE OF SEARCH. HE HAS SUBMITTED THAT ASSESSEE FILED CROSS OBJECTION CHALLENGING THE ASSE SSMENT U/S. 153C OF THE ACT. HE HAS HOWEVER FAIRLY SUBMITTED THAT THIS ISS UE WAS NEITHER RAISED BEFORE THE A.O. AS WELL AS BEFORE THE CIT (A). HE H AS THEREFORE, SEEK PERMISSION TO WITHDRAW THE CROSS OBJECTION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. AS REGARDS THE DEPARTMENTAL APPEAL, THE REV ENUE CHALLENGED THE DELETION OF ADDITION OF RS.9 LAKHS OUT OF ADDITION OF RS.15 LAKHS MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF T HREE SHOPS. IT IS ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 5 SPECIFICALLY NOTED THAT DURING THE SEARCH/SURVEY SE IZED DOCUMENTS WERE RECOVERED TO SHOW THAT ASSESSEE HAS PAID RS.15 LAKH S IN CASH TO THE SELLERS FOR PURCHASE OF THE SHOPS TO M/S. DESIGN SHOP. LD.C OUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO POINT OUT THAT ASSESSEE OFFERED AD DITIONAL INCOME OF RS.9 LAKHS IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE ISSUED U/S. 153C OF THE ACT. MOREOVER THIS FACT IS NOT DISPUTED BY T HE A.O. ALSO. THE ASSESSEE IN THE NOTE FILED WITH THE RETURN OF INCOME SPECIFI CALLY STATED THAT ASSESSEE TIME AND AGAIN REQUESTED THE DEPARTMENT TO PROVIDE COPIES OF ALL THE SEIZED RECORDS INCLUDING THE BOOKS OF ACCOUNTS IN ORDER TO ENABLE THEM TO FILE INCOME TAX RETURN. THE ASSESSEE HOWEVER, ON THE BAS IS OF RECORD AVAILABLE PREPARED THE RETURN WITH THE UNDERSTANDING THAT ONC E THE ASSESSEE WILL BE PROVIDED WITH COMPLETE RECORDS, THE ASSESSEE WILL R EVISED ITS RETURN OF INCOME TO INCORPORATE INCOME IF ANY WHICH MIGHT HAV E BEEN REMAINED TO BE CONSIDERED ON THE BASIS OF THE SEIZED RECORD. THU S, THE ASSESSEE OFFERED TO TAX RS.9 LAKHS ON THE BASIS OF TELESCOPING TO THE V ARIOUS ASSETS ETC. THE NOTE ATTACHED WITH THE RETURN OF INCOME FILED IN RESPONS E TO NOTICE U/S. 153C CLEARLY SUPPORT THE FINDINGS OF THE LD. CIT (A) THA T ASSESSEE SURRENDERED ADDITIONAL INCOME OF RS. 9 LAKHS ONLY ON THE BASIS OF THE RECORDS SEIZED DURING THE COURSE OF SEARCH/SURVEY. SINCE THE COMPL ETE RECORD WAS NOT MADE AVAILABLE TO THE ASSESSEE THEREFORE RS. 9 LAKHS WAS SURRENDERED BY THE ASSESSEE. OTHERWISE THERE WAS NO MATERIAL AVAILABLE WITH THE A.O. WHICH COULD HAVE PROMPTED THE ASSESSEE TO OFFER ADDITIONA L INCOME OF RS. 9 LAKHS. THUS, THE SURRENDER OF ADDITIONAL INCOME HAVE CLEAR LY CO-RELATION WITH THE SEIZED DOCUMENT. THE A.O. IN THE ASSESSMENT ORDER T AKEN THE TOTAL INCOME AS PER THE RETURN AT RS. 8,96,750/- AND MADE FURTHER A DDITION OF RS. 15 LAKHS AND COMPUTED THE TOTAL INCOME OF RS. 23,96,750/-.THE RE TURNED INCOME OF RS. ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 6 8,96,750/- HAVE THE FIGURE OF RS.9 LAKHS WHICH WAS OFFERED FOR TAXATION ON THE BASIS OF THE RECORD AVAILABLE WITH THE ASSESSEE WAS UNDISCLOSED INCOME. THEREFORE, IF THE RETURNED INCOME IS ADDED TO THE UNDISCLOSED INVESTMENT, CERTAINLY IT WOULD AMOUNT TO DOUBLE TAX ATION. THE LD. CIT (A) ON PROPER APPRECIATION OF FACTS AND MATERIAL ON REC ORD RIGHTLY CONSIDERED THE CONTENTION OF THE ASSESSEE IN DELETING THE ADDITION OF RS.9 LAKHS. W E THEREFORE, DO NOT FIND AND INFIRMITY IN THE ORDER OF THE LD. CIT(A) I N RESTRICTING THE ADDITION TORS.6 LAKHS. THERE IS NO MERIT IN THE DEPARTMENTA L APPEAL. THE SAME IS ACCORDINGLY DISMISSED. LD. COUNSEL FOR THE ASSESSEE WITHDREW THE CROSS OBJECTION. THE SAME IS DISMISSED AS WITHDRAWN. 7. IN THE RESULT DEPARTMENTAL APPEAL IS DISMISSED A ND THE CROSS OBJECTION IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN OPEN COURT ON 7-06- 2011. SD/- SD/- (D. C. AGRAWAL) (BHAVNESH SAINI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD. DATED: 7-06- 2011. S.A.PATKI. ITA NO.3285/AHD /2009 & CO NO.12/AHD/2010 . ASSESSMENT YEAR 2007-08. 7 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-III AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 3 - 6 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 3 / 6 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..