Dinesh Chandra Omer, Fatehpur V. ACIT, Allahabad

ITA 350/ALLD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7884 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 29-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJKUMAR LACHHIRAMANKA
• Keywords: Unexplained investment; Search and seizure; Loose papers; Tax effect
• Section: 142(1)

Judgement Text

1 ITA NOS. 348 & 350/ALLD/2013 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH ALLAHABAD BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND MS.SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.348/ALLD/2013 ASSESSMENT YEAR: B.P 1/4/1995 TO 20.3.2002 ASSTT. COMMISSIONER OF INCOME-TAX [CENTRAL CIRCLE], ALLAHABAD VS. SHRI DINESH CHANDRA OMAR, PROP. M/S JAWAHAR LAL DINESH CHANDRA MISHRA, AMAULI, FATEHPUR (APPELLANT) (RESPONDENT) ITA NO.350/ALLD/2013 ASSESSMENT YEAR: B.P 1996-97 TO 2002-03 SHRI DINESH CHANDRA OMAR, PROP. M/S JAWAHAR LAL DINESH CHANDRA MISHRA, AMAULI, FATEHPUR VS. ASSTT. COMMISSIONER OF INCOME-TAX [CENTRAL CIRCLE], ALLAHABAD (APPELLANT) (RESPONDENT) REVENUE BY SHRI RAJKUMAR LACHHIRAMANKA, CIT DR ASSESSEE(S) BY : SHRI PRAVEEN GODBOLE / DATE OF HEARING : 28/06/2017 /DATE OF PRONOUNCEMENT: 29/08/2017 ORDER PER BENCH: BOTH THE APPEALS ARE FILED AGAINST THE ORDER DATE 30/8/2013 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) ALLAHABAD BY T HE REVENUE AS WELL AS THE ASSESSEE. 2. ITA NO. 348/ALLD/2013 WHICH IS FILED BY THE REVE NUE IS COMING UNDER THE TAX EFFECT AS THE ISSUE CHALLENGED BY THE REVEN UE IS RELATED TO THE DELETION 2 ITA NOS. 348 & 350/ALLD/2013 OF RS.11,95,726/- MADE ON ACCOUNT OF UNEXPLAINED IN VESTMENT IN PAWNING AND MONEY LENDING BUSINESS. THEREFORE, AS PER THE CBDT CIRCULAR NO. 21/15 DATED 10 TH DECEMBER, 2015 READ WITH SECTION 268A OF THE INCOM E TAX ACT, 1961, THE REVENUES APPEAL DESERVES TO BE DISMISSED BEING LOW TAX EFFECT. ACCORDINGLY ITA NO. 348/ALLD/2013 FILED BY THE REVENUE IS DISMI SSED BEING LOW TAX EFFECT. 3. THE ASSESSEES APPEALS IS FILED BY RAISING TWO I SSUES RELATING TO SPECULATION BUSINESS AND ENHANCEMENT BY CIT (A). T HE REST OF THE GROUNDS WAS STATED TO BE NOT PRESSED BY THE ASSESSEE. THER EFORE, GROUND NO.1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 14, 15, AND 16 ARE DISMISSED AS THE SAME ARE NOT PRESSED. GROUND NO. 11, 12 & 13 ARE AS FOLLOWS:- 11. THAT IN ANY VIEW OF THE MATTER THE INCOME FROM SPECULATION BUSINESS AS DETERMINED BY THE ASSESSING OFFICER AT RS. 7,19,487 .00 WAS WITHOUT ANY BASIS AND EVEN NO WORKING WAS PROVIDED TO THE ASSESSEE BU T THE LEARNED COMMISSIONER OF INCOME TAX FURTHER ENHANCED THE AMO UNT TO RS. 17,15,039.00 ON THE BASIS OF WORKING PROVIDED BY THE ASSESSEE IN AN ARBITRARY MANNER AND WITHOUT PROVIDING OPPORTUNITY HENCE ENTIRE ACTION O F LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS INCORRECT . 12. THAT IN ANY VIEW OF THE MATTER ADDITION OF RS.3 ,00,000.00 MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2000-01 AND CO NFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS)IS HIGHLY UNJUS TIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. THAT IN ANY VIEW OF THE MATTER ADDITION OF RS.3 ,00,000.00 BY SAYING ALLEGED UNEXPLAINED INVESTMENT IN SARRAFA BUSINESS AS CONFIRMED BY BOTH THE TWO LOWER AUTHORITY ARE HIGHLY UNJUSTIFIED. 4. DINESH CHANDRA OMER (ASSESSEE) DERIVES SHARE INC OME FROM M/S ANIL BRICK FIELD, INCOME FROM AGRICULTURE, INCOME FROM C LOTH, SARRAFA AND FROM PAWNING BUSINESS AND FOR DOING SUCH BUSINESS NO REG ULAR BOOKS OF ACCOUNT HAVE BEEN MAINTAINED. THE ASSESSEE HAD BUSINESS PRE MISES AT AMAULI, 3 ITA NOS. 348 & 350/ALLD/2013 DISTRICT-FATEHPUR, WHICH IS A VILLAGE HAVING POPULA TION OF NOT MORE THAN 10,000 PEOPLE AND IS RESIDING IN AN ANCESTRAL PROPERTY. IN THIS CASE A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 20.03.2002 IN PU RSUANCE OF WARRANT OF AUTHORIZATION ISSUED BY THE DIRECTOR OF INCOME- TAX , INVESTIGATION CIRCLE, KANPUR, A NOTICE UNDER SECTION 158-BC OF THE ACT WA S ISSUED ON 25.07.2003 SERVED ON THE ASSESSEE ON 28.07.2003. ON RECEIPT OF THE NOTICE THE ASSESSEE REQUESTED THE CONCERNED ASSESSING OFFICER TO PROVID E PHOTO COPIES OF SEIZED MATERIAL AND AFTER GREAT PURSUANCE THE PHOTO COPIES OF SEIZED MATERIAL WERE DELIVERED AND ONLY AFTER COMPILATION WORK RETURN WA S FILED ON PRESCRIBED FORM NO. 2B ON 21.01.2004 DISCLOSING THEREIN UNDISCLOSED INCOME AT RS. 6,02,000.00. THEREAFTER FROM TIME TO TIME NOTICES W ERE ISSUED UNDER SECTION 143(2) AND 142(1) OF THE ACT AND VARIOUS QUERIES WE RE PUT TO THE ASSESSEE AND IN COMPLIANCE TO THOSE QUERIES AND NOTICES VARIOUS EXPLANATIONS/DETAILS WERE FILED AND THERE AFTER THE ASSESSMENT WAS MADE BY OR DER DATED 29.03.2004 AND BY THIS ORDER UNDISCLOSED INCOME WAS DETERMINED AT RS. 22,28,861.00 AS AGAINST THE UNDISCLOSED INCOME ACCORDING TO THE ASS ESSEE WHICH WAS RS. 6,02,000.00. 5. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WHO VIDE ORDER DATED 30.08.2013 ALLOWED THE APPEAL IN PART BUT REGARDING INCOME FROM SPECULATION BUSINESS THE ENHANCEMENT WAS MADE TO THE EXTENT OF RS. 17,15,039.00 WITHOUT CONSIDERING THE FACTS PROPERLY, WITHOUT ASC ERTAINING THE CORRECT FACTS IN FIGURES AND WITHOUT PROVIDING REASONABLE OPPORTU NITY TO THE ASSESSEE. THE ENTIRE WORKING AND CALCULATION DONE AT PAGE 47 TO 5 2 OF THE ORDER NEEDS PROPER ADJUDICATION AS THE FIGURES WERE NOT CORRECTLY TAKE N BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE WORKING A T PAGE 47 TO 52 HAS BEEN GIVEN BY THE ASSESSEE BUT WHILE COMPUTING THE SAID WORKING THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS TAKEN DIFF ERENT FIGURES AND THEREFORE THE INCOME WAS ENHANCED AT RS. 17,15,039. 00 WHICH IS NOT CORRECT. THE CIT(A) HELD THAT THE NET PROFIT FROM SHARE TRAN SACTIONS BUSINESS AS PER 4 ITA NOS. 348 & 350/ALLD/2013 ANNEXURE R-2 & B11 WAS RS.17,15,039/-. THEREFORE, THE INCOME FROM SHARE SPECULATION BUSINESS OF THE APPELLANT FOR ASSESSMEN T YEAR 2002-03 WAS CONFIRMED AT RS.17,15,039/-. THUS, THE CIT(A) HAS ENHANCED THE ORIGINAL ADDITION OF RS.5 LAC TO RS. 17,15,039/-. THE ASSES SEE HAS GIVEN ALL THE DOCUMENTS RELATED TO THE SHARE BUSINESS BUT THE SAM E WAS NOT PROPERLY VERIFIED OR TAKEN INTO ACCOUNT BY THE CIT(A) AS CIT (A) HAS NOT TAKEN COGNIZANCE OF THE SHARE BUSINESS DEAL BY THE ASSESS EE. THESE FACTUAL ASPECTS HAS TO BE VERIFIED THOROUGHLY BEFORE THE ASSESSING OFFICER WHILE ENHANCING THE ADDITION THE SAME WAS NOT CONFRONTED WITH THE ASSES SING OFFICER. THEREFORE, THE ASSESSEE SUBMITTED THAT THE SAME MAY BE REMANDE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 6. THE LD. AR SUBMITTED THAT THE SAID AUTHORIZATION IS NOT BASED ON ANY MATERIAL BUT ONLY ON THE HEAR SAY AND RUMOURS, THUS IN REALITY IT IS NOT A FIT CASE FOR SEARCH. THE ENTIRE SEARCH ACTION AND SUBSE QUENT PROCEEDINGS ARE ILLEGAL, UNJUSTIFIED AND AUTHORITIES HAVE ACTED ARB ITRARILY. BY ASSESSMENT ORDER UNDISCLOSED INCOME WAS DETERMINED AT RS. 22,28,861. 00 AS AGAINST THE UNDISCLOSED INCOME ACCORDING TO THE ASSESSEE WHICH WAS RS. 6,02,000.00. THE AFORESAID ALLEGED UNDISCLOSED INCOME HAS BEEN DETER MINED BY THE ASSESSING OFFICER IN A VERY ARBITRARY MANNER WITHOUT TAKING I NTO ACCOUNT THE FACTS PROPERLY, WITHOUT CONSIDERING THE STATUS OF THE APP ELLANT, WITHOUT CONSIDERING THE ASSETS OF APPELLANT AND BY IGNORING ALL THESE A SPECTS A HIGH PITCHED ASSESSMENT IS FRAMED SIMPLY TO JUSTIFY AN ILLEGAL S EARCH WHICH WAS CONDUCTED BY THE DEPARTMENT. THE LD. AR SUBMITTED THAT IT IS NECESSARY TO EXAMINE THE ASSETS FOUND IN THE COURSE OF SEARCH I.E. NOMINAL C ASH AMOUNTING TO RS. 1,645.00 WAS FOUND AND JEWELLERY FOR RS. 47,871.00 WAS FOUND. THE SEARCH PARTY HIMSELF HAS ADMITTED IN THE COURSE OF SEARCH ACTION THAT THE SEARCH WAS CONDUCTED WITHOUT ANY VALID MATERIAL AND ON WRONG I MPRESSION AND WRONG IDEA GIVEN TO THE AUTHORITIES. THE LD. AR FURTHER SUBMIT TED THAT ACCORDING TO THE ASSESSING OFFICER AS ON 31.03.1995 THE APPELLANT WA S A POOREST AND PAUPER PERSON AND DURING THE PERIOD 01.04.1995 TO 20.03.20 02 HE BECAME A MAN OF 5 ITA NOS. 348 & 350/ALLD/2013 STATUS HAVING FINANCIAL BACK GROUND, THOUGH NO MATE RIAL WAS FOUND, NO LOOSE PAPERS WERE FOUND, NO JEWELLERY OR CASH WAS FOUND, CHILDREN ARE STUDYING IN VILLAGE SCHOOL, HAVING NO SUFFICIENT BANK BALANCE B UT STILL SIMPLY BECAUSE A SEARCH WAS CONDUCTED THEREFORE ACCORDING TO THE ASS ESSING OFFICER IT IS NECESSARY TO DETERMINE UNDISCLOSED INCOME AT SUCH A HIGH FIGURE OF RS. 22,28,861.00. THUS IN THIS WAY ENTIRE ASSESSMENT AN D ENTIRE ALLEGED UNDISCLOSED INCOME AS DETERMINED IS HIGHLY UNJUSTIF IED, ILLEGAL AND IN A ARBITRARY MANNER WHICH IS NOT PERMISSIBLE IN THE AC T. 7. THE LD. DR DID NOT HAVE ANY OBJECTION TO THE SEN T BACK THE SAID ISSUES BEFORE THE ASSESSING OFFICER. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ASSESSEE CONTENDED THAT ALL THE RELE VANT MATERIAL WAS AVAILABLE DESPITE THAT THE ENHANCEMENT WAS DONE BY THE CIT(A) WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE FOR EXPLAINING THE DOCU MENTS ON RECORD. IT CAN BE SEEN THAT THE RELEVANT MATERIAL WAS NOT TAKEN INTO ACCOUNT BY THE CIT(A). IT IS IN THE INTEREST OF JUSTICE THAT THE ASSESSEE BE GIV EN OPPORTUNITY TO EXPLAIN THESE DOCUMENTS BEFORE THE ASSESSING OFFICER FOR FURTHER VERIFICATION IN RESPECT OF THIS ISSUE RELATED TO SPECULATIVE/SHARE BUSINESS. THERE FORE, THIS ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. NEEDLES S TO SAY, THE ASSESSEE BE GIVEN PROPER OPPORTUNITY OF HEARING. OTHER GROUNDS ARE NO T PRESSED BY THE ASSESSEE IN HIS APPEAL THEREFORE, THE SAME ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 29 TH DAY OF AUGUST, 2017. SD/- SD/- (R. K. PANDA) (SU CHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER 6 ITA NOS. 348 & 350/ALLD/2013 DATED: 29/08/2017 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR ITAT ALLAHABAD DATE 1. DRAFT DICTATED ON 13/07/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 13/07/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 12.09.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 12.09. 2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 7 ITA NOS. 348 & 350/ALLD/2013