ACIT, Alwar V. KALI METAL P LTD., DELHI

ITA 476/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5089 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENA CIT DHK
• Assessee Lawyers: S L PODDAR ADVO
• Keywords: Rejection of books of accounts; Depreciation; Document seized; Documents seized

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 476/JP/13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ACIT, CENTRAL CIRCLE, ALWAR CUKE VS. M/S KALI METAL PVT. LTD. (FORMERLY LAKSHAY FARMS & ORCHARD PVT. LTD)5/2, PUNJABI BAGH EXTEN. CLUB ROAD, DELHI 15 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCK 3755 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR, ADVO. JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA ( CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.07.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 20 /07/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), CENTRAL, JAIPUR DATED 15.02.20132 WHEREIN THE REVEN UE HAS TAKEN FOLLOWING GROUND OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN ALLOWING TELESCOPING OF DEBIT E NTRIES (PAYMENTS) OF RS.15,00,000/- AGAINST ADDITION MADE ON ACCOUNT OF UNEXPLAINED RECEIPTS (CREDITS) OF RS. 48,86,000/- IN THE ACCOUN T OF M/S WIG BROTHERS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, THOUGH THE PAYMENT ENTRIES ARE IN DIFFERENT NAMES AND NEITHER THE LINK OF SUCH PAY MENTS TO THE RECEIPTS ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 2 IN THE ACCOUNT OF M/S WIG BROTHERS WAS ESTABLISHED NOR SUCH PERSONS WERE EVER IDENTIFIED. 2. AT THE OUTSET, THE LD. AR BROUGHT TO THE NOTICE OF THE BENCH THAT THE CO-ORDINATE BENCH OF ITAT IN ASSESSEES OWN CASE FO R THE SUBJECT ASSESSMENT YEAR HAS DECIDED THE MATTER IN ITA NO. 267/JP/13 V IDE ITS ORDER DATED 28.02.2014 AND THEREIN THE REVENUE HAS SUBMITTED TH AT IT HAS NOT FILED ANY APPEAL AGAINST THE RELIEF OF RS. 15 LACS GRANTED TO THE ASSESSEE. IN LIGHT OF THAT, THE LD. AR SUBMITTED THAT THE SUBJECT APPEAL SHOULD BE DISMISSED IN VIEW OF THE SAID SUBMISSION MADE BY THE LD. CIT(DR). AFTER HEARING BOTH THE PARTIES AND GOING THROUGH THE ORDER OF THE COORDINATE BENCH , IT IS NOTED THAT THE ISSUE BEFORE THE COORDINATE BENCH WAS IN RESPECT OF ADDIT ION OF RS 33,86,000 SUSTAINED BY THE LD CIT(A) AND IN THAT CONTEXT, IT WAS MENTIONED THAT RELIEF OF RS 15,00,000 HAS ALREADY BEEN GIVEN TO THE ASSESSEE AND LD CIT(DR) HAS STATED THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST T HE SAID RELIEF OF RS 15,00,000, HOWEVER THE ASSESSEE IS FURTHER AGGRIEVE D WITH ADDITION OF RS 33,86,000. IN OUR VIEW, EVEN THOUGH LD CIT(DR) HAS MENTIONED THE SAID FACT OF NON-FILING OF AN APPEAL AGAINST THE ADDITION OF RS 15 LACS, THE SAME CANNOT BE TAKEN AS CONCESSION ON BEHALF OF THE REVENUE WHEN T HE FACTS ON RECORD SUGGEST THAT THE SUBJECT APPEAL HAS BEEN FILED BY T HE REVENUE ON 2.5.2013. IN OUR VIEW, THE STATEMENT OF LD CIT(DR) IS APPARENTLY MADE OUT OF IGNORANCE AND THE SAME CANNOT FORM THE BASIS FOR DENIAL OF FILING AN APPEAL OR NON- ADMITTANCE THEREOF. IN LIGHT OF THAT AND AFTER HEA RING BOTH THE PARTIES, IT WAS DECIDED TO HEAR THE REVENUE APPEAL ON MERITS AS WEL L AS TO CONSIDER THE DECISION OF THE CO-ORDINATE BENCH WHERE ALL THE SIM ILAR ISSUES STAND ADJUDICATED BY THE COORDINATE BENCH. WITH THESE OB SERVATIONS, WE HEREBY DISPOSE OF THE SUBJECT APPEAL FILED BY THE REVENUE. ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 3 2.1 REGARDING GROUND NO.1, THE FACTS OF THE CASE HA VE NICELY BEEN CAPTURED BY THE LD. CIT(A), THE SAME ALONG WITH HIS FINDINGS ARE REPRODUCED AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AS ALSO THE FINDING OF THE AO. THERE IS NO DISPUTE ON THE FACT THAT DURING THE SEARCH, INCRIMINATING DOCUMENTS AS PER PAGES 59,60 & 61 WER E FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE AND SUCH SEIZED D OCUMENTS ARE IN THE FORM OF LEDGER ACCOUNT WHICH IS TITLED AS WIG BROTH ERS. THERE IS NO DISPUTE THAT THE DOCUMENTS CONTAINED DATES SPECIFIC CASH ENTRIES WITH SPECIFIC NARRATION. IT IS ALSO ADMITTED FACT THAT SUCH CASH TRANSACTIONS ARE NO VERIFIABLE FROM THE BOOKS OF ACCOUNTS. THE OBJEC TION OF THE APPELLANT IS THAT THESE PAPERS CAN HARDLY BE SAID TO BE BEL ONGING TO THE APPELLANT AS ALSO THAT AT THE MOST ON THE BASIS OF TURNOVER R ECORDED ON SUCH PAPER BY WAY OF AMOUNT INVESTED IN BUSINESS, PROFIT @ 10% OF THE AMOUNT COULD HAVE BEEN ESTIMATED/DETERMINED. IT IS ALSO S TATED THAT CASH ENTRY STATED TO BE DATED 5.3.2008 IS NOWHERE IN THE SEIZE D DOCUMENTS AND CANNOT BE ADDED. THE APPELLANT ALSO CONTENDED THAT WHEN CREDIT SIDE CASH ENTRIES ARE BEING TAXED, CREDIT FOR DEBIT SIDE CASH ENTRY SHOULD ALSO BE GIVEN. IN THIS CONNECTION IT MAY BE NOTED THAT T HE SAID DOCUMENTS WERE FOUND AND SEIZED FROM THE PREMISES OF THE APPE LLANT AND THEREFORE THE DEFINITELY THE PRESUMPTION IS THAT THESE PERTAI N TO THE APPELLANT AND THAT THE TRANSACTIONS RECORDED ON SUCH DOCUMENTS AR E CORRECT. MOREOVER SUCH TRANSACTIONS ARE NOT VAGUE OR UNSPECIFIC AND T HEREFORE THE OBJECTION OF THE APPELLANT THAT THE TRANSACTION CANNOT BE REL ATABLE TO THE ASSESSEE CANNOT BE ACCEPTED. FURTHER REGARDING THE CONTENTI ON OF THE APPELLANT THAT ENTRY DATED 05.03.2008 IS NOWHERE IN THE SEIZ ED DOCUMENT IT MAY BE STATED THAT SUCH ENTRY IS DATED 03.03.2008 WITH THE NARRATION AMOUNT TRANSFERRED - MAHESH KHAN DOI CONS BY ASHISH JI AND THEREFORE IT IS ONLY A TYPING ERROR. AS REGARDS THE CONTENT ION OF THE APPELLANT THAT CREDIT SIDE CASH ENTRIES ARE BEING CONSIDERED AND TAXED THEN CREDIT FOR DEBIT SIDE CASH ENTRIES SHOULD ALSO BE GIVEN IT MAY BE NOTED THAT AO HAS CONSIDERED THE CREDIT SIDE CASH ENTRIES AS OF UNEXP LAINED NATURE. IT MAY FURTHER BE NOTED THE SEIZED DOCUMENTS ARE SAME AND WHEN PARTICULAR ENTRIES OF CREDIT SIDE ARE BELIEVED TO BE OF UNACCO UNTED NATURE THEN CREDIT FOR DEBIT SIDE ENTRIES IS ALSO TO BE GIVEN. THE DEBIT SIDE ENTRY DATED 09.03.2008 FOR RS. 15 LACS IS OF SIMILAR NARRATION BEING CASH AMOUNT TRANSFERRED, PRADEEP, SANJAY GOYAL, CONS BY ASHISHJ I. EVEN NAME IS MENTIONED I.E. SANJAY GOYAL, ASHISHJI GOYAL ARE ALS O COMMON. THEREFORE THE BENEFIT ON ACCOUNT OF SUCH CASH ENTRY APPEARIN G ON DEBIT SIDE IS TO ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 4 BE GIVEN TO THE ASSESSEE. IN FACT ALLOWING SUCH BENEFIT WILL ONLY GIVE TELESCOPIC BENEFIT TO THE APPELLANT IN AS MUCH AS I T REFLECT ONLY ROTATION OF THE SAME MONEY IN THE SAME PERIOD. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES DISCUSSED ABOVE, THE ADDITION SO MAD E BY THE AO IS ACCORDINGLY RESTRICTED TO RS. 33,86,000/- (48,86,00 0 -15,00,000). THE APPELLANT ACCORDINGLY GETS RELIEF OF RS. 15,00,000/ -. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 2.2 THE LD CIT(A) HAS GIVEN A CATEGORICAL FINDING T HAT THE DEBIT SIDE ENTRY DATED 09.03.2008 FOR RS. 15 LACS IS OF SIMILAR NARR ATION BEING CASH AMOUNT TRANSFERRED, PRADEEP, SANJAY GOYAL, CONS BY ASHISHJ I. EVEN NAME IS MENTIONED I.E. SANJAY GOYAL, ASHISHJI GOYAL ARE ALSO COMMON. THE SAID FINDINGS REMAIN UNCONTROVERTED. IN LIGHT OF THAT, LD CIT(A) HAS RI GHTLY HELD THAT WHERE THE CREDIT SIDE CASH ENTRIES HAVE ALREADY BEEN TAXED THEN IN T HAT CASE THE DEBIT SIDE CASH ENTRIES HAVE TO BE TELESCOPED AND HE HAS ACCORDING LY GIVEN RELIEF OF RS. 15 LACS. WE ACCORDINGLY DONOT SEE ANY INFIRMITY IN THE ORDER OF LD CIT(A) IN THE SAID FINDING AND THE SAME IS HEREBY CONFIRMED. HENCE, G ROUND OF REVENUE IS DISMISSED. 2.3 REGARDING GROUND NO.2, THE LD. CIT(A) HAS GIVEN HIS FINDING STATING THAT: HOWEVER THERE IS MERIT IN THE ALTERNATIVE SUBMISSI ON OF THE APPELLANT THAT THE INCOME ALREADY TAXED ON THE BASIS OF SEIZE D PAPER AMOUNTING TO RS. 48,86,000/- SHOULD BE GIVEN CREDIT OF AGAINST SUCH TOTAL UNDISCLOSED INCOME OF RS.81,73,000/- IN AS MUCH AS IN THE P&L A CCOUNT AND BALANCE SHEET OF THE SAME A.Y. THE UNDISCLOSED INCOME DETEC TED ON THE BASIS OF SEIZED PAPER WILL ALSO BE REFLECTED AND COVERED. IT MAY BE NOTED THAT ON THE BASIS OF INCRIMINATING DOCUMENTS AS PER PAGES 5 9,60 & 61 OF AMMEX- A-5 THE AO HAS MADE ADDITION OF RS. 48,86,000/-. T HIS ADDITION IS MAINLY BASED ON THE BASIS OF CASH RECEIVED ON SEVERAL OCC ASIONS ON DIFFERENT DATES IN F.Y. 2007-08 I.E. A.Y. UNDER CONSIDERATIO N. SUCH CASH IS MAINLY RECEIVED DURING THE MONTH OF FEBRUARY AND MARCH, 2 008 AND SUCH RECEIPTS OF CASH HAS BEEN CONSIDERED AS UNDISCLOSE D INCOME. IN THE SAME PERIOD PAYMENT OF RS.15 LACS IS ALSO EVIDENCED AND THEREFORE WHILE ADJUDICATING GROUND 3 OR 4 THE UNDISCLOSED INCOME I S DETERMINED AT RS. 33,86,000/-. FURTHER IN THE SAME A.Y. THE AO HAS M ADE ADDITION OF RS. 81,73,000/- BASED ON P&L A/C AND BALANCE SHEET OF T HE SAME A.Y. IN FACT ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 5 ONE OF THE P&L ACCOUNT IS FOR THE PERIOD FROM 1.11. 2007 TO 31.3.2008 SHOWING PROFIT OF RS. 1.74 CR. APPROXIMATELY AND I T IS NOT ONLY IN THE SAME A.Y. BUT ALSO IN CLOSE PROXIMITY OF CASH RECE IPT IN FEB.& MARCH, 2008. BOTH THESE DOCUMENTS ARE CONSIDERED AS OF UN DISCLOSED NATURE AND THEREFORE THE UNDISCLOSED INCOME EVIDENCED ON THE BASIS OF SEIZED DOCUMENT PAGES 59,60 & 61 OF ANNX. A-5 SHOULD BE TH E PART OF P&L ACCOUNT AND BALANCE SHEET OF SAME PERIOD. BOTH THE TRANSACTIONS ARE OF THE SAME PERIOD AND THE DETERMINATION OF UNDISCLOSE D INCOME RS. 81,73,000/- IS BASED ON P&L ACCOUNT AND BALANCE S HEET OF SAME PERIOD. IT IS NOT ONLY THE CASE THAT THE PROFIT OF RS.81,73 ,000/- IS REFLECTED OR DETECTED BY WAY OF ANY INDEPENDENT SOURCE OF ANY O THER UNDISCLOSED INCOME. THEREFORE THE INCOME ALREADY DETECTED AND TAXED IN THE SAME A.Y. SHOULD BE GIVEN CREDIT IN AS MUCH AS OTHERWIS E IT WILL TANTAMOUNT TO DOUBLE TAXATION. KEEPING IN VIEW ABOVE FACTS AND C IRCUMSTANCES OF THE CASE THE APPELLANT DESERVES CREDIT OF RS. 33,86,000 /- THE INCOME WHICH IS ALREADY BEEN TAXED AND CONFIRMED AND ACCORDINGLY RE MAINING ADDITION OF RS. 47,87,000/- IS CONFIRMED. THE APPELLANT ACCORD INGLY GETS RELIEF OF RS. 33,86,000/-. 2.4 THE MATTER RELATING TO SUSTAINED ADDITION OF RS 47,87,000 WAS BEFORE THE COORDINATE BENCH IN THE APPELLANTS APPEAL AND THE RELEVANT FINDINGS ARE AS UNDER: 11. AFTER GOING THROUGH THE ENTIRE RELEVANT PAGES, WE H AVE FOUND THAT THE SUBMISSION OF THE LD. DR IS CORRECT. THE NET U NDISCLOSED PROFIT REMAIN ONLY AT RS.33,84,752/- (RS. 2,86,35,752 2,52,51,0 00) AS AGAINST RS. 47,87,000/- SUSTAINED BY THE LD. CIT(A). HAVING AR RIVED AT THE CONCLUSION AS ABOVE WE HAVE NOTICED THAT THE PERUSAL OF THE AF ORESAID PAPERS REVEALS THAT THESE MAY ROUGH AND ADHOC PREPARATIONS OF THE PROFITS OF THE ASSESSEE. THE LD. A.O. HIMSELF HAS AGREED TO T HIS FACT WHILE REDUCING THE PROFITS CALCULATED ON THE BASIS OF THESE PAPERS ON ACCOUNT OF DEPRECIATION AND BROUGHT FORWARD LOSSES. 14. AFTER CONSIDERING THE RIVAL SUBMISSION WE HAV E FOUND IT FOR A FACT THAT THE A.O. HAS NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE. FOR THE A.Y. 2008-09, ASSESSEES BOOKS ARE AUDITED U/S 44AB OF THE ACT AND NO ADVERSE REMARK HAS BEEN MADE BY THE AUDITOR (CA) . COPY OF THE AUDIT REPORT IS ENCLOSED AT PAPER BOOK 7 TO 23. RA THER THE AO HAS HIMSELF ACCEPTED THE BOOKS OF ACCOUNT. THEREFORE, WE FIND FORCE IN THE SUBMISSION OF LD. DR AND THAT WITHOUT REJECTION OF BOOKS OF ACCOUNT NO ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 6 SUCH ADDITION IN THE TRADING ACCOUNT ONLY ON THE BA SIS OF RETRACTED ADMISSION IS JUSTIFIED. THE ASSESSEE CAN LEGALLY R ETREAT HIS STATEMENT OF ADMISSION AND DISPROVE THE SAME WITH THE HELP OF TH E EVIDENCE. THE ASSESSEE HAS NOT ONLY RETRACTED FROM HIS ADMISSION BUT HAS PROVED THAT THE ADMISSION MADE IS WRONG AND NOT FACED ON FACT. THE DECISIONS ON WHICH RELIANCE HAS BEEN PLACED AND EXTRACTED ABOVE ARE SELF EVIDENT. THESE DECISIONS SUPPORT AND FORTIFY OUR ABOVE VIEW. WITH THE ABOVE OBSERVATION, WE ORDER DELETION OF THE ENTIRE ADDITI ON MADE IN THIS ACCOUNT AND EVEN DELETE THE SUSTAINED ADDITION OF R S. 47,87,000/- FROM THE HANDS OF THE ASSESSEE. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD CIT(A) HAS GIVEN A CATEGORICAL FI NDING OF FACT THAT BOTH THE TRANSACTIONS ARE OF THE SAME PERIOD AND THE DETERMI NATION OF UNDISCLOSED INCOME RS. 81,73,000/- IS BASED ON P&L ACCOUNT AN D BALANCE SHEET OF SAME PERIOD. IT IS NOT ONLY THE CASE THAT THE PROFIT OF RS.81,73,000/- IS REFLECTED OR DETECTED BY WAY OF ANY INDEPENDENT SOURCE OF ANY O THER UNDISCLOSED INCOME. THEREFORE THE INCOME ALREADY DETECTED AND TAXED IN THE SAME A.Y. SHOULD BE GIVEN CREDIT IN AS MUCH AS OTHERWISE IT WILL TANTAM OUNT TO DOUBLE TAXATION. THE SAID FINDING REMAINS UNCONTROVERTED BEFORE US. FUR THER, THE COORDINATE BENCH IN ASSESSEES APPEAL (SUPRA) HAS QUESTIONED THE VER Y BASIS OF THE SUBJECT ADDITION WHERE IT STATED THAT WITHOUT REJECTION OF BOOKS OF ACCOUNTS, NO SUCH ADDITIONS IN THE TRADING ACCOUNT ONLY ON THE BASIS OF RETRACTED ADMISSION IS JUSTIFIED. IN LIGHT OF ABOVE, WE DONOT SEE A NECES SITY TO INTERFERE WITH THE FINDINGS OF THE LD CIT(A). HENCE, GROUND OF THE RE VENUE IS DISMISSED. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ITA NO. 476/JP/13 ACIT, CC, ALWAR VS. M/S KALI METAL PVT. LTD. DELHI 7 ORDER PRONOUNCED IN THE OPEN COURT ON 20/0 7/2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 20/ 07/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CENTRAL CIRCLE , ALWAR 2. IZR;FKHZ@ THE RESPONDENT- M/S KALI METAL PVT. LTD. DELHI. 3. VK;DJ VK;QDR@ CIT CENTRAL, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A) CENTRAL, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 476/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR