Mr. Hemant Badrinarayan Laddha, Nashik V. ACIT, Cent. Cir.-1, Nashik

ITA 33/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4309 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Unexplained investment; Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JM AND SHRI G.S. PANNU, AM I.T.A. NO. 33/PN/2011: BLOCK PERIOD: 1997-98 TO 2003-04 HEMANT BADRINARAYAN LADDHA 6/7 FALCON PLAZA, NEAR SARDA CIRCLE, NASIK PAN AACPL 8984 E APPELLANT VS. ASSTT. CIT CENT. CIR. 1 NASIK RESPONDENT APPELLANT BY : SHRI PARAG RATHI RESPONDENT BY: SHRI S.K. SINGH DATE OF HEARING: 13-6-2013 DATE OF PRONOUNCEMENT: ___-6-2013 ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-I NASIK DATED 26-10-2010 FOR BL OCK PERIOD FROM 1997-98 TO 2003-04 ON THE FOLLOWING GROUNDS: 1. UNDER THE FACTS, CIRCUMSTANCES AND THE PROVISIO NS OF LAW, THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL OF THE APPELLANT. THEREFORE, IT IS PRAYED TO ALLOW THE APPEAL OF THE APPELLANT. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, PROVISIONS OF LAW AND THE CASE LAW CITED, THE LEARN ED CIT(A) ERRED IN HOLDING THAT THE ESTIMATED COST OF TEA-POY AND THE CASH PAYMENT OF RS. 89,784/- FOR THE PURCHA SE OF SPARE PARTS FROM D.C. BHANDARI FORMED PART OF UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. THEREFORE, IT IS PRAYED TO HOLD THAT THE SAME DID N OT FORM, PART OF THE UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 33/PN/2011 HEMANT LADDA BLOCK PERIOD 1997-98 TO 2003-04 2 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF STONE CRUSHER UNDER THE NAME OF M/S PERFECT METAL I NDUSTRIES AT VILHOLI, DIST. NASIK. THE ASSESSEE IS ALSO LOOK ING AFTER THE AFFAIRS OF PERFECT AGGREGATES PVT. LTD. AS MANAGING DIRECTOR THEREOF AND B.R. LADDHA (HUF) AS KARTA THEREOF. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED ON 9-10-2002 IN LADDHA GROUP OF CASES OF NASIK WHEREIN RESIDENTI AL AND BUSINESS PREMISES OF THE ASSESSEE WERE ALSO COVERED BEING ONE OF THE CONNECTED CASES. A RETURN FOR THE BLOCK PERI OD WAS FILED DECLARING UNDISCLOSED INCOME OF RS 3,15,000/- ON 28 -4-2003. THE ASSESSING OFFICER EXAMINED THE SEIZED DOCUMENT S AND THE RETURN. ACCORDINGLY, ASSESSMENT U/S 158BC R.W.S. 14 3(3) OF THE ACT WAS COMPLETED ON 29-102004 ASSESSING THE TO TAL INCOME AT RS. 4,16,784/- FOR THE BLOCK PERIOD. IN THE IMPUGNED ASSESSMENT ORDER, THE ASSESSING OFFICER M ADE AN ADDITION OF RS. 12,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN A SOFA AND TEA-POY AND RS. 89,784/- O N ACCOUNT OF UNEXPLAINED CASH PAYMENT FOR PURCHASE. 3. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY WHEREIN THE SAME WAS CONFIRMED. 4. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THERE WAS SUFFICIENT CASH BALANCE WI TH HIM OUT OF RENTAL INCOME FROM HUF ETC. THEREFORE, THE IMPUG NED CASH PAYMENT WAS MADE OUT OF THAT. THE A.O RECORDED A F INDING OF 33/PN/2011 HEMANT LADDA BLOCK PERIOD 1997-98 TO 2003-04 3 FACT IN THE IMPUGNED ASSESSMENT AND THAT AFTER SETT ING OF THE NEGATIVE CASH BALANCE OF RS. 2,79,35/- AND THE UNDI SCLOSED INVESTMENT OF RS. 28,000/- WHICH INCLUDED IN THE UN DISCLOSED INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF IN COME, OBSERVED THAT NO FURTHER CASH WAS AVAILABLE TO THE ASSESSEE FOR MAKING THE IMPUGNED PAYMENT TO THE SAID PARTY. IN A PPEAL, THE CIT(A) HAVING GONE THROUGH THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE OBSERVED THAT THE ASSESSEE H AS MADE CASH PAYMENT OF RS. 89,784/- TO SHRI D.C. BHANDARI FOR WHICH THERE WAS NO CORRESPONDING ENTRY IN HIS REGULAR BOO KS OF ACCOUNT. SO, THE CIT(A) WAS JUSTIFIED IN NEGATING THE ARGUMENTS OF THE ASSESSEE THAT THE IMPUGNED CASH PA YMENT WAS NOT RELATABLE TO MATERIAL FOUND DURING THE COUR SE OF SEARCH SO HE CONFIRMED THE DEDUCTION. BEFORE US, TH E LEARNED AUTHORISED REPRESENTATIVE TOOK US THROUGH VARIOUS D ETAILS CLAIMED TO BE FILED BEFORE THE AUTHORITIES BELOW, T O ESTABLISH THAT HE WAS HAVING SUFFICIENT CASH AVAILABLE WITH HIM TO MAKE THE SAID PAYMENT. HE DREW OUR ATTENTION TO THE SUB MISSIONS MADE BEFORE THE CIT(A) IN THIS REGARD AND TRIED TO ESTABLISH THAT HE WAS HAVING SUFFICIENT CASH BALANCE AT THE R ELEVANT POINT OF TIME WHICH HAS NOT BEEN LOOKED INTO BY THE CIT(A). IN THIS SITUATION, WE ARE OF THE VIEW THAT THE ASSESSE E SHOULD HAVE BEEN GIVEN THE BENEFIT OF CASH IF HE IS ABLE T O ESTABLISH WITH DOCUMENTARY EVIDENCE FOR ABOVE INVESTMENTS. SO IN THE INTEREST OF JUSTICE, WE RESTORE BOTH THE ISSUES TO THE FILE OF THE 33/PN/2011 HEMANT LADDA BLOCK PERIOD 1997-98 TO 2003-04 4 ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SA ME AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEA RING TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE 2013. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 20 TH JUNE 2013 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT(A) I NASIK (4) CIT- I NASIK (5) THE D.R. PUNE BENCH PUNE TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE