Shri Dilip Bhandari, V. The ACIT,

ITA 355/IND/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2793 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-06-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 28-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Loose papers; Document seized; Condonation of delay; Documents seized
• Section: 144

Judgement Text

PAGE 1 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : ABCPB2617H I.T.A.NO. 355 & 356/IND/2008. A.Y. : 2003-04 & 2004-05 SHRI DILIP KUMAR BHANDARI, ACIT, MANDSAUR VS RATLAM. APPELLANT RESPONDENT APPELLANT BY : SHRI ASHISH GOYAL, C. A. RESPONDENT BY : SMT. APARNA KARAN, SR. DR DATE OF HEARING : 17.06.2010 O R D E R PER V.K. GUPTA, A.M. BOTH THESE APPEALS BELONG TO SAME ASSESSEE AND INVO LVE CONNECTED ISSUES, HENCE, THESE WERE HEARD TOGETHER AND THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIE NCE. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. BOTH THESE APPEALS ARE BARRED BY LIMITATION BY 66 D AYS, HENCE, THE ASSESSEE REQUESTED FOR CONDONATION OF DELAY AND , IN THIS REGARD, THE ASSESSEE SUBMITTED THAT DUE TO MIS-COMMUNICATION BE TWEEN THE ASSESSEE AND ITS COUNSEL, THIS DELAY OCCURRED AND THE AFFIDA VIT OF THE COUNSELS PAGE 2 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. BROTHER OF THE ASSESSEE WAS ALSO ENCLOSED. WE FIND THAT THE DELAY HAS SATISFACTORILY BEEN EXPLAINED, HENCE, WE CONDONE TH E DELAY AND ADMIT THESE APPEALS FOR ADJUDICATION. 4. THE APPEALS ARE INEXTRICABLY LINKED WITH EACH, HENC E, WE WILL NARRATE THE FACTS OF BOTH THESE APPEALS TOGETHERLY, STARTING FROM THE FACTS FOR THE ASSESSMENT YEAR 2004-05 ON THE BASIS OF WHI CH THE ASSESSMENT PROCEEDINGS HAVE BEEN REOPENED FOR ASSESSMENT YEAR 2003-04. 5. GROUND NOS. 1 & 2 RELATING TO VALIDITY OF ASSESSME NT PROCEEDINGS WERE NOT PRESSED, HENCE, DISMISSED AS N OT PRESSED. 6. IN GROUND NOS. 3, 4 & 5 OF APPEAL FOR ASSESSMENT Y EAR 2003-04 READ AS UNDER :- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ASSESSMENT U/S 144 IS BAD IN LAW AND THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE SAME. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) ERRED IN TREATING THE UNRECORDED SALES AT RS. 32,00,000/-. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) ERRED IN SUSTAINING ADDITION OF RS. 1,60, 000/- ON ACCOUNT OF PROFIT ON UNACCOUNTED SALES. PAGE 3 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. 7. THE FACTS, IN BRIEF, ARE THAT THERE WAS A SURVEY AC TION ON THE ASSESSEE ON 17.7.2003, WHEREIN THE ASSESSEE SURREND ERED A SUM OF RS. 15 LAKHS ON ACCOUNT OF LOOSE PAPERS AND RS. 1,50,000/- ON ACCOUNT OF INVESTMENT IN HOUSE CONSTRUCTION. HOWEVER, SUBSEQUE NTLY, THE ASSESSEE DECLARED ONLY A SUM OF RS. 3,82,000/- INSTEAD OF RS . 15 LAKHS, WHICH COMPRISED OF FOLLOWING :- (1) 5 % PROFIT ON PURCHASES OF RS.27,85,252/- RS.1,46,592/- (2) PEAK INVESTMENT RS. 87,500/- (3) GENERAL SURRENDER TO COVER BOTH RS. 1,47,908/- RS. 3,82,000/- 8. THE AO ANALYZED THE LOOSE PAPERS AND FOUND THAT UNR ECORDED PURCHASES TO THE TUNE OF RS. 27,85,252/- HAD BEEN M ADE BY THE ASSESSEE FOR THE PERIOD FROM JUNE, 2002 TO JULY, 2003, AND F OR THIS THE ASSESSEE HAD WORKED OUT THE INVESTMENT IN PURCHASES AT RS. 87,50 0/- AND PROFIT THEREON @ 5 % HAD BEEN WORKED OUT AT RS. 1,46,592/-. THE AO FURTHER FOUND THAT THE ASSESSEE HAD STATED THAT RS. 3,82,000/- WAS ON THIS ACCOUNT ONLY. THE AO FURTHER ANALYZED THE SEIZED DOCUMENTS AND ON THI S BASIS FOUND THAT THE PURCHASES NOT RECORDED IN THE BOOKS DURING THE PERIOD 1.4.2003 TO 17.7.2003 WAS RS. 38,87,478/-. HENCE, FOR THE FINAN CIAL YEAR 2003-04, THE AO ESTIMATED THE SALES AT RS. 1,50,00,000/- AND WOR KED OUT THE GROSS PROFIT THEREON AT RS. 7,50,000/- AND AFTER GIVING CREDIT OF RS.3,82,000/- PAGE 4 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. DECLARED BY THE ASSESSEE MADE AN ADDITION OF RS. 3, 68,000/-. THE AO, THEREAFTER, HELD THAT THE INVESTMENT IN UNRECORDED PURCHASES WAS TO BE TAKEN AT RS.5 LAKHS AS THE ASSESSEE HAD DECLARED A SUM OF RS. 15 LAKHS IN THE COURSE OF SURVEY. THE AO ALSO MADE AN ADDITION OF RS. 7,50,000/- FOR THE DOCUMENTS NOT PRODUCED FOR VERIFICATION AND COM PLETED THE ASSESSMENT PROCEEDINGS. AGGRIEVED BY THIS, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO ESTIMATED THE SAL ES AT RS. 40 LAKHS AS AGAINST RS. 27,85,252/- WORKED OUT BY THE ASSESSEE ON THE BASIS OF LOOSE PAPERS, AS SUCH LOOSE PAPERS DID NOT CONTAIN THE CO MPLETE RECORDS OF UNACCOUNTED BUSINESS TILL THE DATE OF SURVEY. ACCOR DINGLY, HE WORKED OUT THE NET PROFIT THEREOF AT RS. 2 LAKHS AND, AFTER GI VING CREDIT OF RS.1,46,592/- DECLARED BY THE ASSESSEE, MADE AN ADD ITION OF RS. 53,408/-. THE LD. CIT(A) FURTHER HELD THAT INVESTMENT IN LOOS E PAPERS IN LPS 22 TO 35 AS WELL AS LPS1 TO 21 ( NOT PRODUCED FOR VERIFI CATION ) COULD BE TAKEN AT RS. 5 LAKHS AND AFTER GIVING CREDIT OF RS. 2,32, 000/- I.E. RS. 3,82,000/- (-) RS. 1,50,000/- WAS TO BE SET OFF AGAINST SUCH A MOUNT OF RS. 5 LAKHS AND, ACCORDINGLY, SUSTAINED THE ADDITION OF RS. 2,6 8,000/- AGAINST THE ADDITION OF RS. 5 LAKHS AND RS. 7.50 LAKHS MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 9. AS REGARD TO APPEAL IN I.T.A.NO. 355/IND/2008, WE F IND THAT THE ASSESSMENT FOR THIS YEAR WAS RE-OPENED AS LOOSE PAP ERS FOUND DURING THE PAGE 5 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. COURSE OF SURVEY ALSO CONTAINED DETAILS OF UNRECORD ED PURCHASE FOR THE PERIOD FROM JUNE,2002 TO MARCH, 2003. HAVING REGARD TO THESE PAPERS. THE AO MADE AN ADDITION OF RS. 29,80,272/- ON ACCOU NT OF UNACCOUNTED PURCHASES AND COMPLETED THE ASSESSMENT PROCEEDINGS U/S 144 AS THE ASSESSEE DID NOT PARTICIPATE IN THE ASSESSMENT PROC EEDINGS. ON APPEAL BY THE ASSESSEE, THE LD.CIT(A) ESTIMATED THE UNACCOUNT ED SALES AT RS. 32 LAKHS AND ESTIMATED NET PROFIT THEREON @ 5% ATRS.1. 60 LAKHS. THE LD.CIT(A) ALSO WORKED OUT THE UNEXPLAINED INVESTMEN T IN SUCH PURCHASES AT RS. 2 LAKHS. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 10. THE LD. COUNSEL, FIRSTLY, STATED THAT THE ASSESSMEN T FOR ASSESSMENT YEAR 2003-04 WAS WRONGLY REOPENED AS THE INCOME BASED ON LOOSE PAPERS HAD BEEN TOTALLY DISCLOSED IN THE ASSE SSMENT YEAR 2004-05, HENCE, THERE WAS NO CASE OF ANY INCOME REMAINED ESC APED FROM ASSESSMENT. FOR THIS PROPOSITION, HE PLACED RELIANC E ON THE ORDER OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF HONBOLT BADAZ (INDIA) LIMITED AS REPORTED IN 236 ITR 845. THEREAFTER, HE CONTENDED THAT THE ASSESSEE HAD ALREADY OFFERED RS. 3,82,000/- IN ASSE SSMENT YEAR 2004-05. HENCE, THE ADDITION OF RS. 3,60,000/- FOR THIS YEAR AMOUNTED TO DOUBLE ADDITION. THE LD. COUNSEL, THEREAFTER, MAINLY ARGUE D ON THE ASPECT OF TELESCOPY OF THE ADDITION SUSTAINED BY THE CIT(A) I N ASSESSMENT YEAR 2003-04 AS THE PROFIT OF UNDISCLOSED INVESTMENT LEF T THE FUNDS AVAILABLE TO PAGE 6 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. THE ASSESSEE FOR INVESTMENT IN ASSESSMENT YEAR 2004 -05, BECAUSE THESE AMOUNTS HAD NOT BEEN INVESTED ANY WHERE ELSE OR NO OTHER ASSETS WERE FOUND. 11. THE LD. SENIOR D.R. ,ON THE OTHER HAND, AFTER NARRA TING THE FACTS PLACED STRONG RELIANCE ON THE ORDERS OF THE REVENUE AUTHORITIES. 12. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 13. AS FAR AS MERITS OF THE ADDITIONS ARE CONCERNED, WE FIND THAT THE LD.CIT(A) HAS BEEN VERY REASONABLE IN ESTIMATING TH E SALES AT RS. 40 LAKHS AND CORRESPONDINGLY IN WORKING OUT THE PROFIT THERE ON AS WELL AS UNDISCLOSED INCOME IN THE UNACCOUNTED PURCHASES AND ANY OTHER LOOSE PAPERS. HENCE, IN OUR OPINION, ALL THE RELEVANT GRO UNDS OF THE ASSESSEE ARE HAVING NO MERITS, THUS DISMISSED. SIMILARLY, WE FI ND THAT IN ASSESSMENT YEAR 2003-04, THE LOOSE PAPERS PERTAINING TO THAT Y EAR ONLY HAS BEEN CONSIDERED TO WORK OUT THE QUANTUM OF UNRECORDED PU RCHASES AND PROFIT AS WELL AS UNDISCLOSED INVESTMENT IN SUCH PURCHASE S. HENCE, ON THAT ACCOUNT ALSO, THE ASSESSEE CAN NOT BE GIVEN ANY REL IEF. THUS, ALL THE RELEVANT GROUNDS OF THE ASSESSEE ARE DISMISSED. 14. AS REGARD THE AVAILABILITY OF FUNDS BY WAY OF PROFI T AND UNDISCLOSED INVESTMENT IN UNACCOUNTED PURCHASES IN ASSESSMENT YEAR 2003-04, WE FIND THAT THE PROCEEDINGS OF THIS YEAR HAS BEEN TAKEN PAGE 7 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. SUBSEQUENT TO CULMINATING OF APPELLATE PROCEEDINGS FOR ASSESSMENT YEAR 2004-05, HENCE, THE LD.CIT(A) HAD NO OCCASION TO CO NSIDER THESE CLAIMS OF THE ASSESSEE. WE ALSO FIND THAT IN THE APPELLATE PROCEEDINGS, FOR ASSESSMENT YEARS 2003-04 AND 2004-05, NO PLEA BEFOR E THE LD.CIT(A) WAS TAKEN THOUGH THE APPELLATE ORDER WAS BASED FOR BOTH THE ASSESSMENT YEARS ON THE SAME DATE I.E. 20.3.2008 AND HEARING HAVE AL SO BEEN DONE SIMULTANEOUSLY. IN THIS VIEW OF THE MATTER, WE CONS IDER IT FIT TO RESTORE THE ASPECT OF TELESCOPING AS PLEADED BY THE ASSESSEE BE FORE US FOR CONSIDERATION OF LD.CIT(A) ON MERITS AND RESTORE TH E APPEAL IN I.T.A.NO. 356/IND/2008 TO THE FILE OF LD.CIT(A) TO DECIDE THE SAME AS PER LAW AFTER GIVING AN ADEQUATE OPPORTUNITY OF HEARING TO THE AS SESSEE. BEFORE PARTING, WE ALSO HOLD THAT THERE IS NO MERIT IN THE LEGAL GR OUND OF THE ASSESSEE IN ASSESSMENT YEAR 2003-04 REGARDING VALIDITY OF REOPE NING FOR THE REASON THAT THE AO CONSIDERED LOOSE PAPERS PERTAINING TO A SSESSMENT YEAR 2004- 05, ONLY WHILE COMPLETING THE ASSESSMENT PROCEEDING S FOR THAT YEAR AND IN APPEAL BEFORE US, THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE SURRENDERED INCOME WAS FOR BOTH THE Y EARS. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 IS DISMISSED IN TERMS INDICATED ABOVE AND APPEAL FOR ASSESSMENT YEAR 2004-05 STANDS PARTLY ALLOWED FOR S TATISTICAL PURPOSES FOR PAGE 8 OF 8 -. I.T.A.NOS. 355 & 356/IND/2008 SHRI DILIP KUMAR BHANDARI, MANDSAUR. CONSIDERATION OF ASPECT OF TELESCOPING IN RESPECT O F ADDITION MADE IN ASSESSMENT YEAR 2003-04. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD JUNE, 2010. CPU* 1721226