M/s. Triloknath Corporation, Valsad V. The Income tax Officer, Ward-4, Valsad

ITA 4088/AHD/2008

• Counselvise Citation: 408820514 RSA 2008
• Duration Of Justice: 6 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 24-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-12-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Keywords: Retraction
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER I TA S NO .4088/ A HD/ 2008 A. Y .200 5 - 06 M/S. TRILOKNATH CORPORATION, 108 SAMRUDDHI APPARTMENT, OPP. VASANT TALKIES, VALSAD. PAN:AAEFT 3551F VS ITO WARD - 4, VALSAD. (APPELLANT) (RESPONDENT) REVENUE BY : S HRI D.C. MISHRA, SR. D.R. , ASSESSEE(S) BY : SHRI RAJESH M. UPADHYAY, AR / DATE OF HEARING : 24 / 0 4 /201 5 / DATE OF PRONOUNCEMENT: 19 / 0 6 /201 5 / O R D E R PER SHRI S.S. GODARA , JUDICIAL MEMBER THIS ASSESSEE S APPEAL FOR A.Y. 200 5 - 0 6 , ARISE S FROM ORDER OF C I T(A) VALSAD DATED 2 6 . 08 .20 08 PASSED I N CASE NO .CIT(A)/VLS/399/07 - 08, UPHOLDING ADDITIONS OF RS.3 LACS AS ON - MONEY RECEIVED ON FLATS/SHOPS PURCHASES, RS.12 LACS IN CASH OF SUNDRY DEBTORS AND THE ONE MADE U/S.68 R.W.S. 41(1) AMOUNTING TO RS.5,40, 080/ - AS CESSION OF LIABILITY, IN PROCEEDINGS U/S. 143 (3 ) OF THE INCOME TAX ACT IN SHORT THE ACT . 2 . THE CASE FILE REVEALS THAT THE LOWER APPELLATE ORDER HAS CONFIRMED THE FIRST TWO ADDITIONS OF ON - MONEY AND SUNDRY DEBTORS BY COMMON OBSERVATIONS. WE ALSO PROPOSE TO DECIDE THE SAME BY A COMMON ORDER. THE ASSESSEE IS A FIRM. S/SHRI TARUN K. MODI AND MISTRY ALONG WITH SMT. ITA NO. 4088 /AHD/20 08 M/S. TRILOKNATH CORPORATION FOR A.Y. 200 5 - 0 6 - 2 - SHARDABEN K. MODI ARE STATED TO BE ITS PARTNERS. THE DEPARTMENT CONDUCTED A SURVEY IN ITS CASE ON 3.1.2006. IT CAME ACROSS SOME LOOSE SHE ETS/DIARIES MARKED AS B - 1/9 AND B - 1/2 REVEALING ON - MONEY ON SALES OF SHOPS AND FLATS AND UNACCOUNTED SUNDRY DEBTORS OF RS.3 LACS AND RS.12 LACS; RESPECTIVELY. ONE OF THE ASSESSEE S PARTNER SHRI TARUN K MODI GOT RECORDED HIS STATEMENT ADMITTING THE AFORESAI D AMOUNTS. THE ASSESSEE HAD NOT FILED ANY RETURN AT THE FIRST INSTAN CE. THE ASSESSING OFFICER ISSUED SECTION 142(1) NOTICE DATED 2.2.2006. THE ASSESSEE FILED ITS RETURN ON 15.2.2006 STATING NIL INCOME. THE ASSESSING OFFICER TOOK UP SCRUTINY AND SOUGHT FOR REASONS OF NOT DECLARING THE AFORESAID SUM OF RS.15 LACS I.E. RS.3 LACS + RS.12 LACS AS INCOME. THE ASSESSEE SOUGHT FOR THE AFORESAID IMPOUNDED MATERIAL. ALSO FILED DETAILS OF OPENING AND CLOSING STOCK ALONG WITH ITS PARTNERS RETURNS. THE ASSESSING OFFICER FURNISHED THE ABOVE STATED DOCUMENTS. THE ASSESSEE PRODUCED ITS BOOKS OF ACCOUNTS RIGHT FROM ASSESSMENT YEAR 1999 - 00 ONWARDS COMPRISING ITS CUSTOMER S ADVANCE PAYMENTS. IT ALSO DISPUTED CORRECTNESS OF THE ABOVESAID SEIZED MATERIAL FOR WANT OF ANY SUPPORTIV E EVIDENCE. IT WOULD EXPLAIN THAT ITS PARTNER S STATEMENT RECORDED HEREINABOVE WAS WITHOUT CONSENT OF THE OTHER PARTNERS. THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 27.12.2007 DREW SUPPORT FROM SHRI MISTRY S STATEMENT CONFIRMING THAT SHRI MODI HAD BEE N HANDLING ACCOUNTS, ADMINISTRATION AND BOOKINGS. HE HEAVILY RELIED ON THE AFORESAID SURVEY STATEMENT AND ALSO REFER RED TO THE AFORESAID SEIZED PAPER SHEETS/DIARIES TO MAKE THE IMPUGNED TWO ADDITIONS OF ON - MONEY AMOUNTING TO RS.3 LACS ON SALE OF FLATS/SHOP AND RS.12 LACS IN CASE OF SUNDRY DEBTORS RESPECTIVELY. ITA NO. 4088 /AHD/20 08 M/S. TRILOKNATH CORPORATION FOR A.Y. 200 5 - 0 6 - 3 - 3. THE CIT(A) HAS REJECTED THE ASSESSEE CORRESPONDING GROUND S BY FOLLOWING COMMON FINDINGS. 5.1 I HAVE PERUSED THE FACTUAL MATRIX OF THE CASE. ADMITTEDLY THE SPECIFIC DISCLOSURE OF ADDITIONA L INCOME WAS ADMITTED BY THE PARTNER OF THE APPELLANT FIRM WHEN IT WAS DISCOVERED AND MATERIAL FOUND THAT CERTAIN TRANSACTIONS WERE NOT RECORDED BY THE APPELLANT IN ITS BOOKS OF ACCOUNTS. THE ASSESSING OFFICER HAS NOT CONFRONTED THE APPELLANT REGARDING REC EIPT OF ON MONEY AND SUNDRY DEBTORS AND SOLELY RELY UPON THE STATEMENT OF THE PARTNER OF APPELLANT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. ON THE OTHER HAND THE APPELLANT HAS ALSO NOT PROVED TO THE SATISFACTION OF THE ASSESSING OFFICER THAT PART OF THE CONSIDERATION HAS NOT BEEN OBTAINED IN CASH AND SUNDRY DEBTORS AS ADMITTED IN THE STATEMENT RECORDED DURING THE TIME OF SURVEY. AS MENTIONED BY THE ASSESSING OFFICER IT IS SEEN THAT THE APPELLANT HAS NOT OFFERED THE ADDITIONAL INCOME DECLARED BY HIM DURING THE COURSE OF SURVEY PROCEEDINGS FOR TAXATION. IT IS NOTICED THAT NEITHER DURING THE COURSE OF SURVEY ACTION NOR SUBSEQUENTLY THE APPELLANT HAS RETRACTED FROM HIS OWN STATEMENT AND SUDDENLY WHEN THE ASSESSING OFFICER ISSUED SHOW CAUSE LETTER THE AP PELLANT E FORWARD WITH ALTOGETHER NEW SET OF ARGUMENTS WHICH CANNOT BE ACCEPTED. I OF THE CONSIDERED VIEW AGREEING WITH THE ASSESSING OFFICER THAT THE RETRACTION OF DISCLOSURE MADE AFTER 1.5 YEARS FROM THE DATE OF SURVEY IS NOT VALID. I AM CONSTRAINED TO A GREE WITH THE ASSESSING OFFICER AND THE ADDITION MADE BY THE ASSESSING OFFICER IS UPHELD AND GROUND OF APPEAL NO. 1 & 2 ARE DISMISSED. 4. WE HAVE HEARD BOTH SIDES. RECORDS PERUSED. THE ASSESSEE REITERATES ITS SUBMISSIONS THAT THERE IS NO SUPPORTING MATER IAL APART FROM ITS PARTNER STATEMENT SUBSTANTIATING THE IMPUGNED ADDITIONS OF ON - MONEY AND SUNDRY DEBTORS. THE REVENUE SUPPORTS LOWER AUTHORITIES FINDINGS. THEY HAVE REFERRED TO THE ABOVESAID TWO LOOSE SHEETS /DOCUEMENTS B - 1/9 AND B - 1/2 IN SUPPORT OF THE IM PUGNED ADDITIONS. THE SAME ARE AVAILABLE IN THE CASE FILE AT PAGES 29 TO 45 AND 46 RESPECTIVELY. IT TRANSPIRES THAT THE FORMER SHEETS CONTAIN VARIOUS FIGURES RANGING BETWEEN RS.20000 TO RS.30000/ - WITHOUT QUOTING ANY NAME OR OTHER DETAILS; WHATSOEVER. THE LATTER DOCUMENT ITA NO. 4088 /AHD/20 08 M/S. TRILOKNATH CORPORATION FOR A.Y. 200 5 - 0 6 - 4 - AT PAGE 46 IS ALSO IN THE SAME TUNE STATING FIGURES ONLY. THE AUTHORITIES BELOW HAVE FAILED TO CORRELATE THE SAME WITH ANY OF TH E ASSESSEE S PARTICULAR ACTIVITY . NOR DOES IT PROVE ANY SIGNATURES OF ITS EMPLOYEES THEREUPON. THEREFORE, WE HOL D THAT THE REVENUE CANNOT RELY UPON THE SAID DOCUMENTS FOR MAKING THE IMPUGNED ADDITIONS. THIS LEAVES US WITH STATEMENT OF ASSESSEE S PARTNER (SUPRA). THIS CASE FILE COMPRISES OF THE TRIBUNAL S ORDER IN CASE OF SHARDABEN K MODI FOR A.Y.2005 - 06 DECIDED ON 2 0.7.2012 PERTAINING TO THE SAME VERY SURVEY WHEREIN IT HAS BEEN HELD THAT THE REVENUE COULD NOT HAVE MADE IDENTICAL ADDITIONS MERELY ON THE STATEMENT OF ASSESSEE S VERY PARTNER SHRI MODI WHO HAPPENS TO BE SON OF SHRI SHARDABEN. CASE LAW OF HON BLE MADRAS H IGH COURT REPORTED AS (2008) 300 ITR 157 CIT VS. KHADER KHAN & SONS IS QUOTED IN SUPPORT. THE HON BLE JURISDICTIONAL HIGH COURT HAS UPHELD THIS CO - ORDINATE BENCH S ORDER IN TAX APPEAL 123/2013 DECIDED ON 30.4.2013. WE DRAW SUPPORT THEREFORE AND HOLD THAT T HE IMPUGNED ADDITIONS ARE NOT SUPPORTED FROM ANY EVIDENCE EXCEPT A SURVEY STATEMENT RECORDED. THE IMPUGNED ADDITIONS STAND DELETED ACCORDINGLY . THE ASSESSEE SUCCEEDS IN ITS FORMER TWO GROUNDS. 5. THIS LEAVES US WITH THE ASSESSEE S LAST GROUND CHALLENGING ADDITION OF RS.5,40,080/ - MADE U/S. 68 R.W.S. 41(1) OF THE ACT. THIS AMOUNT COMPRISES OF A SUM OF RS.5,20,000/ - STATED AS ADVANCES AGAINST CUSTOMERS AND SUNDRY CREDITORS OF RS.20,080/ - AS STATED IN THE BALANCE SHEET AS ON 31.3.2005. THE ASSESSING OFFICER SOUGHT FOR THE CUSTOMERS/SUNDRY CREDITORS. HE QUOTED ASSESSEE S NON CO - ITA NO. 4088 /AHD/20 08 M/S. TRILOKNATH CORPORATION FOR A.Y. 200 5 - 0 6 - 5 - OPERATION IN CARRYING OUT NECESSARY VERIFICATION AND INVOKED SECTION 68 R.W.S.41(1) OF THE ACT. THE CIT(A) HAS ALSO AFFIRMED ASSESSING OFFICER S FINDINGS. BOTH PARTIES BEFORE US REITERA TE THEIR RESPECTIVE STANDS. THE ASSESSEE STATES THESE SUMS AS ADVANCES AND CREDITS CARRIED FORWARD FROM THE EARLIER ASSESSMENT YEARS. HOWEVER, NO SUCH RELEVANT RECORD APPEARS TO HAVE BEEN PRODUCED BEFORE THE LOWER AUTHORITIES. IT IS CONTENDED THAT THE ASSE SSEE MAY BE GRANTED ONE MORE OPPORTUNITY OF PROVING ITS CASE EITHER OF THE LOWER AUTHORITY. WE FIND THAT NO SUCH PRAYER WAS MADE BEFORE THE LD. CIT(A). THE CASE RECORD ALSO DOES NOT POINT ANY LACK OF OPPORTUNITY OF HEARING. IN THESE CIRCUMSTANCES, WE HOLD THAT THE ASSESSEE S PRAYER OF REMITTING THIS ISSUE BACK TO THE LOWER AUTHORITIES IS NOT JUSTIFIABLE AT THIS BELATED STAGE. THEREFORE, WE HOLD THAT ONCE THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE THE NECESSARY DETAILS OF THESE CREDIT FORWARD BALANCES OF CUST OMERS ADVANCES AND SUNDRY CREDITS, THE SAME ARE LIABLE TO BE AFFIRMED. THE ASSESSEE S LAST GROUND ACCORDINGLY FAILS. 6. THE ASSESSEE S APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE JUNE , 201 5 AT AHMEDABAD. SD/ - SD/ - ( PRAMOD KUMAR ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; PRABHAT KR. KESARWANI , SR. P . S . PRONOUNCED ON 19.06.2015 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S.S. GODARA) A.M. J.M. ITA NO. 4088 /AHD/20 08 M/S. TRILOKNATH CORPORATION FOR A.Y. 200 5 - 0 6 - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD