Ashok Shantilal Jain, Pune V. Deputy Commissioner of Income-tax,

ITA 417/PUN/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3680 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2019
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV BOTHAM
• Assessee Lawyers: P D KUDWA
• Keywords: Search and seizure
• Section: 132; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 417 /P U N/201 5 / ASSESSMENT YEAR : 20 05 - 06 SHRI ASHOK SHANTILAL JAIN, ROW HOUSE NO.3, KOHINOOR ESTATE, MULA ROAD, KHADKI, PUNE 411003 . / APPELLANT PAN: A AOPJ0817C VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), PUNE . / RESPONDENT / APPELLANT BY : S /S HRI NIKHIL PATHAK AND P.D. KUDWA / RESPONDENT BY : SHRI GAURAV BOTHAM / DATE OF HEARING : 22 . 0 1 .201 9 / DATE OF PRONOUNCEMENT: 22 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 12 , PUNE , DATED 1 5 . 0 1 .20 1 5 RELATING TO ASSESSMENT YEAR 20 05 - 06 AGAINST ORDER PASSED UNDER SECTION 1 53A(B) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS FILED THE FOLLOWING ABRIDGED GROUND OF APPEAL: - ITA NO. 417 /P U N/20 1 5 SHRI ASHOK SHANTILAL JAIN 2 1) THE LEARNED CIT(A) ERRED IN HOLDING THAT THE BENEFIT OF TELESCOPING OF THE UNDISCLOSED INCOME OF THE PARTNERSHIP FIRMS NAMELY FLOORING S AND BHIKSHU GRANIMART SHOULD BE ALLOWED TO THE ASSESSEE AGAINST THE UNDISCLOSED INVESTMENTS / EXPENSES INCURRED BY THE ASSESSEE ONLY TO THE EXTENT OF THE ASSESSEES SHARE IN THE RESPECTIVE FIRMS AS AGAINST THE CLAIM OF THE ASSESSEE THAT ENTIRE UNDISCLOSE D INCOME OF THE SAID FIRMS SHOULD BE ALLOWED TO BE TELESCOPED AGAINST THE UNDISCLOSED INVESTMENTS / EXPENSES OF THE ASSESSEE. 3. THE ASSESSEE HAS RAISED ABRIDGED GROUND OF APPEAL AND THE ISSUE RAISED IN THE PRESENT APPEAL IS THE CLAIM OF BENEFIT OF TELESC OPING OF UNDISCLOSED INCOME OF PARTNERSHIP FIRM TO BE ALLOWED IN THE HANDS OF ASSESSEE AGAINST HIS UNDISCLOSED INVESTMENT / EXPENSES. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS PARTNER IN PARTNERSHIP FIRMS BHIKSHU GRANIMART, M/S. FLOORINGS AND OTHER FIRMS ALSO. SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE GROUP OF CASES ON 27.04.2005. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153A OF THE ACT. THE ASSESSEE INITIALLY FILED RETURN OF INCOME DEC LARING TOTAL INCOME OF 41,50,860/ - , WHICH WAS THEN REVISED TO 43,83,923/ - . VARIOUS DOCUMENTS WERE FOUND FROM THE PREMISES OF ASSESSEE AND EVEN CASH WAS FOUND FROM HIS BANK LOCKER OF 20 LAKHS. INITIALLY, THE ASSESSEE HAS OFFERED THE SAME BUT LATER, RETRACTED HIS ADMISSION , BUT IN THE ABSENCE OF BOOKS OF ACCOUNT THE SAID CASH WAS ADDED IN THE HANDS OF ASSESSEE. FURTHER, ADDITION WAS MADE ON ACCOUNT OF INTRODUCTION OF CASH IN M/S. SAAR PROPERTIES. FURTHER ADDITIONS WERE ALSO MADE ON ACCOUNT OF CERTAIN EXPENDITURE. 5. TH E ASSESSEE BEFORE THE AUTHORITIES RAISED THE PLEA THAT THE ADDITIONAL INCOME HAS BEEN DECLARED IN THE HANDS OF FIRMS M/S. FLOORINGS AND BHIKSHU AND THE SAME SHOULD BE TELESCOPED AGAINST THE ADDITION MADE IN THE HANDS OF ASSESSEE. THE CIT(A) VIDE PARA 7.10 HOLDS THAT THE ASSESSEES SHARE IN ITA NO. 417 /P U N/20 1 5 SHRI ASHOK SHANTILAL JAIN 3 ADDITIONAL UNDISCLOSED INCOME DECLARED BY THE FIRMS WAS 17% IN M/S. FLOORINGS AND 33% IN BHIKSHU, WHICH COULD BE TELESCOPED AGAINST THE ADDITION OF 29,50,000/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A ) AND HAS POINTED OUT THAT AGAINST ADDITIONAL INCOME DECLARED IN BHIKSHU, WHERE TWO BROTHERS WERE ALSO PARTNERS, SINCE NO CLAIM HAS BEEN MADE BY THEM IN RESPECT OF BALANCE ADDITIONAL INCOME OF 14.32 LAKHS, THEN THE SAID BENEFIT BE ALLOWED TO THE ASSESSEE . IN RESPECT OF M/S. FLOORINGS, HE FAIRLY POINTED OUT THAT THE SAID FIRM IS CONSTITUTED OF HIS BROTHERS AND NEPHEW. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAS BEEN CHANGING HIS STAND BEFORE THE AUTHORIT IES BELOW AND NO BENEFIT IS TO BE ALLOWED OVER AND ABOVE THE ONE GRANTED BY THE ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. CONSEQUENT TO SEARCH AND ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS, UNDISCLOSED I NVESTMENT TO THE EXTENT OF 50 LAKHS WAS ADDED IN THE HANDS OF ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY POINTED OUT THAT THERE WAS NO DISPUTE VIS - - VIS THE SAME. HOWEVER, HE SOUGHT TELESCOPING OF UNDISCLOSED INCOME ASSESSE D IN THE HANDS OF TWO PARTNERSHIP FIRMS, OF WHICH THE ASSESSEE WAS PARTNER. FIRST SUCH FIRM IS BHIKSHU, WHERE THE ASSESSEE WAS PARTNER ALONG WITH HIS TWO BROTHERS AND HAS 1/3 RD SHARE. THE ASSESSEE POINTS OUT THAT NO BENEFIT HAS BEEN CLAIMED BY THE OTHER PARTNERS IN THIS REGARD. TO THAT EXTENT, WE FIND MERIT IN THE PLEA OF ASSESSEE AND ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE BENEFIT ITA NO. 417 /P U N/20 1 5 SHRI ASHOK SHANTILAL JAIN 4 OF TELESCOPING OF UNDISCLOSED ASSESSED INCOME IN THE HANDS OF BHIKSHU OVER AND ABOVE THE SHARE OF ASSESSEE . HOWEVER, IN RESPECT OF M/S. FLOORINGS, WHICH CONSTITUTES OF THE BROTHERS OF ASSESSEE AND HIS NEPHEW, WE FIND NO MERIT IN THE PLEA OF ASSESSEE AS NO SUCH EVIDENCE HAS BEEN FILED BY THE ASSESSEE TO EXPLAIN THAT OTHERS HAD ALSO GIVEN UP THEIR SHARES. WE DIRECT THE ASSESSING OFFICER , ACCORDINGLY . THE ABRIDGED GROUND OF APPEAL RAISED BY ASSESSEE IS THUS, PARTLY ALLOWED. 9 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 22 ND DAY OF FEBRUARY , 201 9 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 22 ND FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 12 , PUNE ; 4. THE CI T - CENTRAL , PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE