SAU USHA SHRIKANT DESHMUKH, Amaravati V. ACIT-AMRAVATI-CIRCLE, Amaravati

ITA 440/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1724 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: R B ATAL
• Keywords: Salary income
• Section: 133A; 131

Judgement Text

1 IT A NO. 440/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 440 /NAG/201 3 ASSESSMENT YEAR : 2007 - 08 SAU USHA SHRIKANT DESHMUKH, ASSTT. COMMISSIONER OF RUKMINI NAGAR, V/S. INCOME - TAX, AMRAVATI CIRCLE, AMRAVATI. AMRAVATI. PA N AAPPD1813K. APPELLANT. RESPONDENT. APPELLANT BY : SHRI R.B. ATAL. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 13 - 07 - 2015 DATE OF PRONOUNCEMENT : 21 ST AUGUST, 2015 O R D E R PER SHAMIM YAHYA, A.M. . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 06 - 09 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2007 - 08. 2. THE ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) ERRED IN MAINTAINING THE ADDITION OF ` .15,50,000/ - MADE BY THE ASSESSING OFFICER. 3 . THE ASSESSEE IS A DOCTOR. SHE DERIVES INCOME FROM SALARY FROM HOSPITAL. SHE ALSO DERIVES INCOME FROM PRIVATE MEDICAL PRO FESSION. A SURVEY OPERATION WAS 2 IT A NO. 440/NAG/2013 CONDUCTED UNDER SECTION 133A OF THE I.T. ACT AT THE ASSESSEES PREMISES. THE ASSESSING OFFICER OBSERVED THAT THERE WERE CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNTS NOTED AS PER THE MATERIAL FOUND DURING THE SURVEY AND TH E ASSESSEE DID NOT PRODUCE ANY SATISFACTORY EXPLANATION. THE ASSESSING OFFICER FURTHER NOTED THAT AS PER STATEMENT OF THE ASSESSEE RECORDED ON 09 - 10 - 2006 THE ASSESSEE HAD OFFERED UNDISCLOSED INCOME OF ` .20 LAKHS AGAINST THE DISCREPANCIES FOUND IN HER BOOKS OF ACCOUNT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD NOT REFLECTED THE SAME IN HER RETURN OF INCOME. ASSESSEES EXPLANATION IN THIS REGARD IS AS UNDER : THE SURVEY WAS UNDERTAKEN ON 09.10.2006 IN MY HOSPITAL ALONG WITH SURVEY IN THE CASE O F SURVEY OF MY HUSBAND DR. SHRIKANT DESHMUKH. IN THE COURSE OF SURVEY ENTIRE RECORD OF MY HOSPITAL INCLUDING OPD REGISTER, RECEIPTS BOOKS, BILLS & VOUCHERS AND ACTIVITIES WERE LOOKED INTO. NO SPECIFIC DISCREPANCY WITH RESPECT TO LOSS OF GOVT. REVENUE WAS DETECTED NOR FOUND. NO UNDISCLOSED INCOME NOR ANY SOURCE OF SUCH INCOME WAS FOUND. CASH BALANCE IN THE HOSPITAL WAS ` .1090/ - AND THE SAME TALLIED WITH CASH BOOK. THE CONSTRUCTION OF HOSPITAL BUILDING WAS IN PROGRESS AND IN THE MAINTENANCE DOF THE BOOKS FOR THE CONSTRUCTION SOME IRREGULARITIES WERE NOTED BY YOUR GOODNESS. HOWEVER IT DOES NOT SPEAK THAT ASSESSEE HAD CONCEALED ANY INCOME. HOWEVER WHILE SUBMITTING RETURN OF INCOME ASSESSEE HAS OFFERED EXTRA INCOME OF ` .450000/ - SO AS TO COVER U P ALL THE OMISSIONS IN THE PROFESSIONAL INCOME AS WELL AS IN THE COST OF CONSTRUCTION. .ACTUALLY THE DISCLOSED AMOUNT OF ` .20 LAKHS WAS MEANT FOR BOTH & SAME WAS DECIDED TO BE DISCLOSED IN THE CASE OF DR. SHRIKANT DESHMUKH. ASSESSEE NEVER SMELT NOR E XPECTED BY HER THAT SHE IS ALSO REQUIRED TO DISCLOSE ADDITIONAL INCOME OF ` .20 LAKHS. HOWEVER, T HE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE BY OBSERVING THAT SHE HAS HERSELF ADMITTED THAT SHE WILL DECLARE ` .20 LAKHS AS HER UNDISCLOSED INCOME IN HER IND IVIDUAL CAPACITY . HENCE THE ASSESSING OFFICER ADDED ` .15,50,000/ - BY EXCLUDING ` . 4,50,000/ - ALREADY DISCLOSED IN THE RETURN FROM A SUM OF ` . 20 LAKHS. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BEFORE THE LEARNED CIT(APPEALS). 3 IT A NO. 440/NAG/2013 4 . IN THE APPELLATE ORDE R LEARNED CIT(APPEALS) OBSERVED THAT HE HAS PERUSED TWO IMPORTANT EVIDENCES FOR WHICH THE SAID AMOUNT OF ` .20 LAKHS HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE. THE FIRST IS THE STATEMENT RECORDED U/S 131 DURING THE COURSE OF SURVEY PROCEEDINGS ON 09 - 10 - 2006. THAT IN THE STATEMENT RECORDED OF THE APPELLANT ONLY WHEREIN SHE HAS STATED THAT THE IRREGULARITIES POINTED OUT ARE PROCEDURAL IN NATURE AND ARE UNINTENTIO NAL AND TO BUY PEACE OF MIND AND COVER UP TO COMMISSIONS AND OMISSIONS SHE HAS OFFERED ` .20 LAKHS AS AN ADDITIONAL INCOME FOR A.Y. 2006 - 07 AND SHE SHALL PAY THE ADVANCE TAXES ON THE SAME. THAT IN HER ANSWER TO QUESTION NO.3, SHE HAS FURTHER CLARIFIED THAT THIS ADDITIONAL INCOME OF ` .20 LACS IS BEING OFFERED TO COVER UP THE IRREGULARITIES OF THE EARLIER YEARS ALSO AND THAT SHE MAY BE GRANTED IMMUNITY FROM INTEREST AND PENALTIES. THAT T HE SECOND PIECE OF EVIDENCE IS A LETTER WRITTEN BY THE APPELLANT HIMSELF O N 09 - 10 - 2006 WHICH IS ADDRESSED TO INCOME TAX OFFICER, WARD - 1, AMRAVATI WHEREIN SIMILAR FACTS AS STATED IN THE STATEMENT U/S 131 HAVE BEEN REPEATED. THAT I T IS STATED THAT IN ORDER TO PURCHASE PEACE OF MIND AND TO COVER UP VARIOUS OMISSION AND COMMISSIO NS, SHORTFALLS, ABSENCE OF EVIDENCE, COMMITMENTS ON OR OUT OF RECORD SHE SURRENDERS ` .20 LACS AS PROFESSIONAL INCOME TO TAX IN ADDITION TO THE INCOME THAT SHALL BE WORKED OUT IN A NORMAL COURSE OF PROFESSION. RELYING ON THE ABOVE, LEARNED CIT(APPEALS) PRO CEEDED TO CONFIRM THE ADDITION. 5 . AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE REITERATED THE SUBMISSION THAT THE STATEMENT GIVEN BY THE ASSESSEE AT THE TIME OF SURVEY WAS WITH RESPECT TO THE DISCLOSURE ALONG WITH HER HUSBAND WHO IS ALSO A MEDICA L PRACTITIONER AND PRACTICING FROM THE SAME PREMISES LEARNED COUNSEL FURTHER SUBMITTED THAT THERE IS NO CORROBORATORY EVIDENCE AND THE REVENUE AUTHORITIES ARE NOT JUSTIFIED IN ADOPTING COERCIVE MEASURES IN MAKING ASSESSMENT. 4 IT A NO. 440/NAG/2013 IN THIS REGARD LEARNED COUNSE L REFERRED TO THE LETTER OF THE UNDER SECRETARY, ( INV ) WHO WAS CHIEF COMMISSIONER OF INCOME TAX AND OF DIRECTOR GENERAL OF INCOME TAX AS UNDER : SUBJECT : CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION REGA RDING INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMENT DURING THE CO URSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDINGS ALSO, ASSESSING OF FICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT O R D ERS. 7. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND REPEATED TH AT ADDITION IS BASED UPON ASSESSEES OWN DISCLOSURE DURING SURVEY. 8 . UPON CAREFUL CONSIDERATION WE NOTE THAT THE LEARNED CIT(APPEALS) HAS CONFIRMED THE ADDITION SOLELY ON THE BASIS OF THE STATEMENT RECORDED ON SURVEY. IT IS TRUE THAT IN THE ASSESSMENT O RDER THE ASSESSING OFFICER HAS MENTIONED ABOUT CERTAIN DISCREPANCIES FOUND DURING THE SURVEY WHICH THE ASSESSEE HAD DENIED BEFORE THE ASSESSING OFFICER HIMSELF. NOWHERE IN THE ASSESSMENT ORDER THERE IS MENTION OR COMPUTATION OF UNDISCLOSED INCOME WHICH THE SURVEY TEAM HAS UNEARTHED. NOW THIS FACT HAS TO BE SEEN COUPLED WITH THE ASSESSEES EXPLANATION THAT SHE IS ALREADY 5 IT A NO. 440/NAG/2013 EMPLOYED IN HOSPITAL. SHE DRAWS SALARY FROM THERE. SHE DOES NOT HAVE MUCH TIME TO MAKE A VERY ROARING PRACTICE. THE ASSESSEE HAS FURTHER SUBMITTED THAT TO TAKE INTO ACCOUNT SOME OF THE DISCREPANCIES SHE HAS HERSELF DISCLOSED ADDITIONAL SUM OF ` .4,50,000/ - . UNDER THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE ADDITION OF ` .15,50,000/ - IS SOLELY BASED UPON A STATEMENT OBTAINED DURING THE SURVEY. THIS IS NOT SUPPORTED BY PROPER DOCUMENTARY EVIDENCES. AS HELD BY HONBLE MADRAS HIGH COURT IN THE CASE OF S.S. KADARKHAN, NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEMENT OB TAINED DURING SURVEY WITHOUT ANY CORROBORATING EVIDENCE. IN THIS ORDER OF HONBLE MADRAS HIGH COURT, NO INFIRMITY WAS FOUND BY THE HONBLE APEX COURT AS REPORTED IN THE CASE OF S. KADARKHAN 254 CTR 228. THUS WE FIND THAT IN THE BACKGROUND OF AFORESAID DISC USSION AND PRECEDENT, THE ADDITION MADE IN THIS CASE IS SOLELY BASED UPON THE STATEMENT OBTAINED ON SURVEY. AS HELD BY THE CASE LAW CITED ABOVE, STATEMENT OBTAINED ON SURVEY IS NOT A CONCLUSIVE PROOF OF UNDISCLOSED INCOME. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION IN THIS REGARD. 9 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF AUGUST, 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 21 ST AUGUST, 2015. 6 IT A NO. 440/NAG/2013 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR