M/S. SANJAY STEELS, Bhopal V. THE ACIT-3(1), Bhopal

ITA 5/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5743 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Income from undisclosed sources; Loose papers
• Section: 143(3); 133A; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SANJAY STEELS, BHOPAL .. ./ PAN: AALFS1567P VS. ACIT, 3(1), BHOPAL / APPELLANT / RESPONDENT / APPELLANT BY SHRI HITESH CHIMNANI, CA / RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 28.09.2016 DATE OF PRONOUNCEMENT 28.09.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, BHOPAL [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 02.11 .2015 AND .. . / I.T.A. NO. 05/IND/2016 %' ' / ASSESSMENT YEAR: 2007-08 I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 2 OF 11 PERTAINS TO ASSESSMENT YEAR 2007-08 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER PASSED U/S 143(3) OF T HE ACT DATED 09.12.2013 OF ACIT, 3(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. 2. THERE IS ONLY ONE GROUND OF APPEAL, WHICH RELATES TO SUSTAINING THE ADDITION OF RS. 2,85,820/- TOWARDS A LLEGED UNACCOUNTED CRANE HIRE CHARGES MADE BY THE AO. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SU RVEY WAS CONDUCTED ON 20.03.2007 AT THE BUSINESS PREMISES OF THE ASSESSEE, WHEREIN THE GREEN COLOUR FILE LPS-3, PAGES 1 TO 158, WAS FOUND ON WHICH CRANE HIRING CHARGES WERE WRITTEN. PAGE NO. 1 SHOWS THE WORKING OF THE CHARGES RECEIVED FROM STEEL CENTRE ON ACCOUNT OF GIVING CRANE ON HIRE. THE CHA RGES ARE RS. 400/- PER HOUR AND ON PAGE NOS. 2 & 3, CHARGES RECE IVED FROM SATYAM INDUSTRIES, BHOPAL, WERE FOUND WRITTEN WITH TH E BILL HOURS WRITTEN AS 54.30 AND THE CHARGES WRITTEN AS @ R S. 400/- PER HOUR. THE TOTAL HIRING CHARGES WERE WRITTEN AS R S. 21,720/- WHICH IS RS. 400/- MULTIPLIED WITH THE NUMBE R OF HOURS AS 54.30. HENCE, IT WAS CLEAR THAT CRANE HIR E CHARGES I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 3 OF 11 WERE BEING RECEIVED @ RS. 400/- PER HOUR FROM SATYAM INDUSTRIES AND STEEL CENTRE. PAGE 101 TO 158 ARE PA GES OF A RECEIPT BOOK OF THE ASSESSEE. IN ALMOST ALL THE BIL LS/RECEIPTS, AMOUNT IS WRITTEN IN NUMERIC AS WELL AS IN WORDS. IN SOME OF THE BILLS, THE RATE HAS BEEN SHOWN @ RS.300/- PER HO UR RECEIVED FROM SATYAM INDUSTRIES. PAGE NO. 130 TO 15 8 PERTAIN TO FINANCIAL YEAR 2006-07. THESE CRANE CHARGES/BILL S WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS. HENCE, CRANE HI RE CHARGES OF RS. 4,95,600/- WERE ADDED TO THE INCOME OF THE A SSESSEE FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE FILED A RECTIFICATION APPLICATION REGARDING THE AMOUNT OF CRANE HIRE CHAR GES. THE AO HAS PASSED AN ORDER U/S 154 ON 29.04.2010 BY WHI CH THE ADDITION MADE AT RS. 4,95,600/- WAS REDUCED TO RS. 2,85,820/-. THE CIT(A)-II, BHOPAL, VIDE ORDER DATED 27.06.2011 CONFIRMED THE ADDITION OF RS. 2,85,820/-. THE LD. CIT(A)-II, BHOPAL, VIDE ORDER DATED 27.06.2011 CONFIRMED THE A DDITION OF RS. 12,85,820/- MADE BY THE AO ON ACCOUNT OF HIRE C HARGES RECEIVED OUTSIDE THE BOOKS OF ACCOUNTS. THE CASE WAS REMANDED BACK BY THE I.T.A.T., INDORE BENCH VIDE OR DER DATED I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 4 OF 11 27.04.2012 TO THE FILE OF AO FOR FRESH ADJUDICATION . THE ASSESSMENT ORDER HAS AGAIN BEEN PASSED ON 09.12.201 3, WHICH IS THE IMPUGNED ORDER UNDER APPEAL, RETAINING THE ADDITION OF RS. 2,85,820/- AS MADE IN THE ORIGINAL ASSESSMENT ORDER. THE ASSESSEE AGGRIEVED WITH THE ORDER FILED APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE COPIES OF AFFIDAVIT OF SHRI OM PRAKASH GUPTA, PROPRIETOR OF M/S. STEEL CENTRE AND SHRI ROHIT KAUSHAL, MANAGER, M/S. SATYAM INDUSTRIES, WERE FILED BEFORE THE I.T.A.T., INDORE BENCH. IN THESE AFFIDAV ITS, THEY HAVE DEPOSED THAT NO PAYMENT ON ACCOUNT OF CRANE HIRE CH ARGES WAS MADE BY THEM TO THE ASSESSEE FIRM. THEREFORE, TH E AO SHOULD HAVE TAKEN COGNIZANCE OF THE SAME. SHRI ROHI T KAUSHAL HAD EVEN APPEARED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AND HAD IN HIS STATEMENT, CLEARLY DENIE D THAT ANY PAYMENT WAS MADE BY HIS FIRM TO M/S SATYAM INDUSTRIE S TO THE ASSESSEE ON ACCOUNT OF CRANE HIRE CHARGES. HOWE VER, SHRI O.P. GUPTA DID NOT APPEAR BEFORE THE AO FOR EXAMINA TION. THE LD. CIT(A) HAS NOTED THAT THE DOCUMENTS IN QUESTION LPS-3, I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 5 OF 11 PAGES 1-158 WERE FOUND AND IMPOUNDED DURING THE COU RSE OF SURVEY PROCEEDINGS U/S 133A AT THE BUSINESS PREMISE S OF THE ASSESSEE, THUS, HELD TO BE GENUINE AND CORRECT AND A CONCLUSIVE WRITTEN PROOF. THESE HAVE BEEN WRITTEN IN THE REGULAR COURSE OF BUSINESS AND THERE IS NO DOUBT RE GARDING THEIR GENUINENESS. NOR THE DOCUMENTS ARE VAGUE. THE Y CONTAIN CLEAR AND SPECIFIC NOTINGS WHEREIN CRANE CHARGES HAV E BEEN SHOWN COMPUTED ON THE BASIS OF EXACT RATE MULTIPLIED WITH EXACT NUMBER OF HOURS OF CRANE USED. THEREFORE, THE ARGUMENTS OF THE LD. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE THAT THESE DELIVERY CHALLANS ARE ONLY FOR INDICATIV E PURPOSES FOR NEGOTIATING WITH THE PARTIES IS REJECTED. THE ARGUME NT ALSO RUNS CONTRADICTORY TO THE OTHER ARGUMENT TAKEN BY T HE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE IN THE WRI TTEN SUBMISSIONS THAT M/S. SATYAM INDUSTRIES HAS BEEN A REGULAR CUSTOMER OF THE ASSESSEE SINCE LONG AND, THEREFORE, NO CRANE CHARGES WERE CHARGED FROM IT FOR THE CRANE SERVICES PROVIDED TO IT AS PART OF THE BUSINESS PROMOTION ACTIVITIES OF THE ASSESSEE. THE AFFIDAVIT FILED BY THE ASSESSEE NOT AT THE FIRS T POINT OF TIME I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 6 OF 11 BUT AT A MUCH LATER STAGE DURING THE COURSE OF HEAR ING OF THE APPEAL BY THE I.T.A.T. SHRI O.P. GUPTA WAS ALSO NOT PRODUCED BEFORE THE AO FOR RECORDING HIS STATEMENT. SHRI ROH IT KAUSHAL APPEARED BEFORE THE AO, BUT WHEN CONFRONTED WITH BILLS/VOUCHERS IMPOUNDED AT THE TIME OF SURVEY SHOWI NG CALCULATIONS MADE OF CRANE CHARGES OF RS. 2,37,000/ - FROM M/S. SATYAM INDUSTRIES, HE WAS EVASIVE AND REPLIED T HAT THESE DOCUMENTS WERE NOT IN HIS KNOWLEDGE AND THAT HE DID NOT RECEIVE THESE TYPES OF DOCUMENTS. THEREFORE, THE LD . CIT(A) CONCLUDED THAT THESE ARE SELF-SERVING DOCUMENTS AND CANNOT BE RELIED UPON, WHICH ARE NOTHING BUT AFTER THOUGHT TO COVER UP HIS UNACCOUNTED SALES RECEIVED OUTSIDE THE BOOKS OF ACCOUNTS. ACCORDINGLY, THE ADDITION MADE BY THE AO WAS CONFIRMED. 5. AGGRIEVED WITH THE ORDER, THE ASSESSEE FILED THIS A PPEAL BEFORE US. 6. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THESE ARE CALCULATIONS MADE ON THE LOOSE PAPERS AND NO CRANE CHARGES WERE ACTUALLY RECEIVED. THE AO HAS MIS-DIRE CTED I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 7 OF 11 HIMSELF WITH DELIVERY CHALLAN TREATING THESE PAGES I NDICATING RECEIPTS OF SUCH CRANE HIRE CHARGES. THE LD. AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE FIRM HAS A HYDRAULIC CRANE WHICH IT USES AT ITS OWN G ODOWN. IT DOES NOT GIVE THE CRANE ON HIRE TO THIRD PARTIES AT ALL. THE ASSESSEE NOT RECEIVED ANY CRANE HIRING CHARGES INCO ME EITHER FROM M/S. STEEL CENTRE OR M/S. SATYAM INDUSTRIES OR ANY THIRD PARTY IN EITHER THIS YEAR OR ANY OTHER EARLIER OR F UTURE YEARS. BOTH THE PARTIES HAVE CONFIRMED THAT THEY HAVE NOT MADE ANY PAYMENT TO CRANE HIRING CHARGES TO THE ASSESSEE FIR M. COPY OF LEDGER ACCOUNT OF M/S. SATYAM INDUSTRIES IN THE BOO KS OF ACCOUNTS OF THE ASSESSEE SHOWING THAT NO PAYMENT HAD BEEN RECEIVED IN RESPECT OF CRANE HIRING CHARGES ALSO FI LED AT PAPER BOOK PAGES 11-13. IT WAS ALSO STATED THAT SHRI ROHIT KAUSHAL, MANAGER OF SATYAM INDUSTRIES IN RESPECT OF CRANE HI RING CHARGES, HIS STATEMENT WAS RECORDED WHERE HE CONFIRME D THAT NO PAYMENT WAS RECEIVED IN RESPECT OF CRANE HIRING C HARGES. THE AO HAS NOT BEEN ABLE TO ADDUCE EVIDENCE TO SHOW THAT THE ASSESSEE HAS EARNED INCOME FROM SAID DELIVERY CHALL ANS. THE I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 8 OF 11 ENTIRE ADDITION IS BASED MERELY ON PRESUMPTION THAT THE ASSESSEE RECEIVED MONEY WHICH WAS NOT RECORDED IN THE BOOKS OF THE ASSESSEE. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALSO SUBMITTED THAT THE TURNOVER OF THE AS SESSEE DURING THE YEAR WAS RS. 26 CRORES WHEREAS TOTAL ADDIT ION MADE BY THE AO ON ACCOUNT OF UNACCOUNTED INCOME IS RS. 2 .85 LACS WHICH COMES TO 0.11 %. THEREFORE, IT WAS URGED THAT CONSIDERING THE AFFIDAVITS AND CONFIRMATION FILED B Y THE ASSESSEE, THE GROUND RAISED BY THE ASSESSEE MAY BE ALLOWED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS OF THE LOWER AUTHORITIES 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT A SURVEY WAS CONDUCTED ON 20.03.2007 AT THE BUSINESS PREMISES OF THE ASSESSEE, WHEREIN THE GREEN COLOUR FILE LPS-3, PAGES 1 TO 158, WAS FOUND ON WHICH CRANE HIRING CHARGES WERE WRITTEN. PAGE NO. 1 SHOWS THE WORKING OF THE CHARGES RECEIVED FROM STEEL CENTRE ON ACCOUNT OF GIVING CRANE ON HIRE. THE CHA RGES ARE RS. 400/- PER HOUR AND ON PAGE NOS. 2 & 3, CHARGES RECE IVED FROM I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 9 OF 11 SATYAM INDUSTRIES, BHOPAL, WERE FOUND WRITTEN WITH TH E BILL HOURS WRITTEN AS 54.30 AND THE CHARGES WRITTEN AS @ R S. 400/- PER HOUR. THE TOTAL HIRING CHARGES WERE WRITTEN AS R S. 21,720/- WHICH IS RS. 400/- MULTIPLIED WITH THE NUMBE R OF HOURS AS 54.30. HENCE, IT WAS CLEAR THAT CRANE HIR E CHARGES WERE BEING RECEIVED @ RS. 400/- PER HOUR FROM SATYAM INDUSTRIES AND STEEL CENTRE. PAGE 101 TO 158 ARE PA GES OF A RECEIPT BOOK OF THE ASSESSEE. IN ALMOST ALL THE BIL LS/RECEIPTS, AMOUNT IS WRITTEN IN NUMERIC AS WELL AS IN WORDS. IN SOME OF THE BILLS, THE RATE HAS BEEN SHOWN @ RS.300/- PER HO UR RECEIVED FROM SATYAM INDUSTRIES. PAGE NO. 130 TO 15 8 PERTAIN TO FINANCIAL YEAR 2006-07. THESE CRANE CHARGES/BILL S WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS. HENCE, CRANE HI RE CHARGES OF RS. 4,95,600/- WERE ADDED TO THE INCOME OF THE AS SESSEE FOR THE YEAR UNDER CONSIDERATION. THEREFORE, THIS IS A FACT WHICH CANNOT BE DENIED AND WE HAVE ALSO GONE THROUGH THE PAPER BOOK PAGES 20 TO 49 WHICH CONTAINS DETAILS OF DESCRI PTION OF CRANE HIRE CHARGES GIVING SERIAL NUMBER, DESCRIPTIO N, RATE AND AMOUNT THEREON IN THE NAME OF STEEL CENTRE, SATYAM I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 10 OF 11 INDUSTRIES. THEREFORE, THE DOCUMENTS IMPOUNDED IN C OURSE OF SURVEY CLEARLY MAKES OUT A CASE THAT THE ASSESSEE H AS RECEIVED CRANE HIRING CHARGES FROM M/S. STEEL CENTRE AND M/S . SATYAM INDUSTRIES. WE ALSO FIND THAT THE AFFIDAVIT FROM SH RI O.P. GUPTA, PROPRIETOR OF M/S. STEEL CENTRE AND SHRI ROH IT KAUSHAL MANAGER OF M/S. SATYAM INDUSTRIES ONLY FILED AT VER Y LATER STAGE DURING THE APPELLATE PROCEEDINGS BEFORE THE T RIBUNAL. THEREFORE, THEIR AFFIDAVITS CANNOT BE RELIED UPON A ND THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT THESE ARE AFTER TH OUGHT AND SELF-SERVING EVIDENCES. FURTHER, IN THE STATEMENT R ECORDED OF SHRI ROHIT KAUSHAL, HE WAS FOUND TO BE EVASIVE AND WH EN CONFRONTED WITH THE LOOSE PAPERS AND REPLY THESE DOC UMENTS WERE NOT WITHIN HIS KNOWLEDGE AND THAT HE DID NOT RECE IVE THESE TYPES OF DOCUMENTS. MOREOVER, SHRI O.P. GUPTA HAS FAILED TO APPEAR BEFORE THE AO FOR EXAMINATION. CON SIDERING THESE FACTS, WE ARE OF THE CONSIDERED, OPINION THAT THE LOWER AUTHORITIES ARE JUSTIFIED IN MAKING ADDITION IN TH IS ACCOUNT. ACCORDINGLY, THE GROUNDS OF APPEAL ARE REJECTED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. I.T.A.NO. 05/IND/2016 A.Y.07-08 SANJAY STEELS, BHOPAL. PAGE 11 OF 11 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 28 TH SEPTEMBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 28 TH SEPTEMBER, 2016. CPU*