DCIT, C.C.-XXVII, Kolkata, Kolkata V. Shyam Sundar Nangalia, Kolkata

ITA 506/KOL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91950 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 28-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2010
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: A K TIBREWAL
• Keywords: Income from undisclosed sources; Document seized; Documents seized
• Section: 142(1); 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM ] I.T.A NO. 506 / KOL/201 0 ASSESSMENT YEAR : 200 6 - 0 7 DEPUTY COMMISSIONER OF INCOME - TAX, VS. SHYAM SUNDAR NANGALIA CENTRAL CIRCLE - XXVII, KOLKATA. (PAN: ABUPN8177A) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 2 1 .0 5 .2015 DATE OF PRONOUNCEMENT: 21 . 0 5 . 2015 FOR THE APPELLANT: SHRI RAVI JAIN, CIT, DR FOR THE RESPONDENT: S HRI A. K. TIBREWAL, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF CIT (A), CENTRAL - II , KOLKATA VIDE APPEAL NO. 45/CC - XXVII/CIT(A) - C - II/KOL/09 - 10 DATED 11 . 12 .20 09 . ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE - XXVII, KOLKATA U/S. 153A/ 14 3(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 6 - 0 7 VIDE HIS ORDER DATED 26 . 05 .20 0 9 . 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.30 LAKH MA DE BY AO ON ACCOUNT OF UNDISCLOSED INCOME . FOR THIS, REVENUE HAS RAISED FOLLOWING THREE GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.30,00,000 / - ON ACCOUNT OF UNDISCLOSED INCOME, ADDED ON THE BASIS OF ENTRY RECORDED IN THE DOCUMENT SEIZED IN THE COURSE OF SEARCH FROM THE POSSESSION OF SRI RAM GOPAL SARAF . 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT ENTRIES REGARDING CASH RECEIPT OF R S .30 LAKHS RECORDED IN THE SEIZED DIARY IS NOT CORROBORATED WITH ANY INDEPENDENT EVIDENCE WIT HOUT APPRECIATING THAT ENTRIES REGARDING CHEQUE PAYMENTS RECORDED IN THE SAME SEIZED DOCUMENT WERE FOUND RECORDED IN THE B OOKS AND BANK STATEMENT OF M/S. BUDGE BUDGE REFINERIES LT D . , A GROUP CONCERN OF THE ASSESSEE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.30,00, 000/ - AS UNDISCLOSED INCOME RELYING ON THE DECISION OF THE APEX COURT IN THE CASE OF CBI VS V.C.SHUKLA [1998] 3 SCC 410, 425, 426, 430 WITHOUT CONSIDERING THE FACTS OF THE SAID CASE OF THE DECISION ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. 3. BR IEFLY STATED FACTS ARE THAT T HERE WAS A SEARCH U / S 132 OF THE ACT AT THE RESIDENCE AS WELL AS OFFICE PREMISES ON 28 MARCH 2007 AND THEREAFTER ON VARIOUS DATES TILL 25TH MAY 2007. DURING THE COURSE OF SEARCH VARIOUS PAPERS AND DOCUMENTS RELATING TO ASSESSEE , HIS SON SRI RAHUL NANGALIA AND ALSO RELATING TO BUDGE BUDGE REFINERIES LTD. WERE FOUND AND SEIZED BY REVENUE . 2 ITA NO. 506 /K/201 0 SHYAM SUNDAR NANGALIA . AY 200 6 - 0 7 IN RESPONSE TO NOTICES ISSUED U / S 153A OF THE INCOME TAX ACT, 1961 ASSESSEE FURNISHED RETURN OF INCOME DECLARING AN INCOME OF RS.9 , 38,282 WHICH HAD ORIGINALLY DECLARED BY HIM U / S 139(1) OF THE ACT. SUBSEQUENTLY, I N RESPONSE TO NOTICES U / S 143(2) / 142(1) OF THE ACT, THE ASSESSEE FURNISHED ALL DETAILS AND EVIDENCES IN RESPECT OF THE INCOME DISCLOSED IN THE ORIGINAL RETURN FILED U / S 139(1) AS WELL A S RETURN FILED U / S 153A OF THE ACT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY A SUM OF RS. 30, 00,000 SHOULD NOT BE TREATED AS HIS INCOME ON THE BASIS OF SOME ENTRIES FOUND RECORDED IN A DIARY SEIZED FROM THE POSSESSION OF ONE SRI RAM GOPAL SARAF IN THE COURSE OF SEARCH U / S 132 AT HIS ADDRESS. IT WAS ALLEGED BY THE AO THAT THE SAID ENTRIES REFLECTED AS PAYMENTS OF RS. 30,00,000 TO ASSESSEE AGAINST CHEQUES PAID TO HINDUSTAN OIL STORAGE & DISTRIBUTION C O. LTD. ( IN SHORT HOSDCL) BY BUDGE BUDGE REFINERIES LTD. (IN SHORT BBRL) FOR PURCHASE OF LAND. DESPITE EXPLANATION, AO MADE ADDITION OF UNEXPLAINED AMOUNT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). 4. THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : - 4. I HAVE GONE THROUGH THE ASSESSMENT ORDER, SUBMISSIONS OF APPELLANT AND ASSESSING OFFICER. THE FACTS OF THE CASE SHOW THAT ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS OF A DIARY FOUND FROM THE POSSESSION OF SRI RAM GOPAL SARAF. ASSESS ING OFFICER HAD EXAMINED SRI RAM GOPAL SARAF WHO DENIED EVEN KNOWING THE APPELLANT PERSONALLY AND DID NOT CONFIRM THE ENTRIES OF PAYMENT OF CASH OF RS 30 LAKH TO APPELLANT APPEARING IN A DIARY FOUND FROM HIS POSSESSION. THE FACTS SHOW THAT APPELLANT GROUP HAD PURCHASED A LAND IN THE NAME OF ITS GROUP CONCERN BUDGE BUDGE REFINERIES LTD FROM HINDUSTAN OIL STORAGE & DISTRIBUTION CO. LTD. OF SRI RAM GOPAL SARAF GROUP. THE POSSIBILITY OF GETTING BACK THE PURCHASE CONSIDERATION IN CASH BY APPELLANT FOR THIS DEAL IS REMOTE AS THE LAND IS FINALLY REGISTERED IN THE NAME OF BUDGE BUDGEREFINERIES LTD. THE PRESUMPTION OF ASSESSING OFFICER THAT APPELLANT MUST HAVE GIVEN, ADVANCE IN CASH WHICH HE GOT BACK AFTER CHEQUE WAS PAID BY BUDGE BUDGE REFINERIES LTD TO HINDUSTAN OI L STORAGE & DISTRBUTION CO. LTD. IS NEITHER MENTIONED IN THE DIARY NOR WAS CONFIRMED BY SRI RAM GOPAL SARAF IN HIS STATEMENT ON OATH. IN FACT THE SUGGESTION OF APPELLANT THAT SRI RAM GOPAL SARAF WOULD HAVE SIPHONED OFF THE SUM OF RS 30 LAKH FROM HINDUSTAN OIL STORAGE & DISTRIBUTION CO LTD BY USING APPELLANT'S NAME IN HIS DIARY TO SHOW TO HIS CO - DIRECTORS IS EQUALLY APPLICABLE AS THE PRESUMPTION OF ASSESSING OFFICER. I FIND THAT UNLESS THE CONTRARY IS PROVED, THE PRESUMPTION OF POSSESSION HAS TO BE ACCEPTED. THE CASH ENTRIES IN THE DIARY OF SRI RAM GOPAL SARAF HAVE TO BE PRESUMED TO BE BELONGING TO HIM UNLESS HE PROVES OTHERWISE. THE PREMISES OF APPELLANT WERE ALSO SEARCHED AND THERE IS NOTHING IN THE ASSESSMENT ORDER WHICH CAN SHOW THAT THERE WAS ANY CORROBO RATIVE EVIDENCE FOUND FROM THE PREMISES OF THE APPELLANT WHICH COULD CORROBORATE THE ENTRIES FOND IN THE DIARY FROM THE POSSESSION OF SRI RAM GOPAL SARAF. APPELLANT HAS CLEARLY DENIED THE RECEIPT OF ANY CASH FROM SRI RAM GOPAL SARAF BEFORE THE ASSESSING OF FICER. UNDER SUCH CIRCUMSTANCES, THE ONUS IS ON SRI RAM GOPAL SARAF TO PROVE THAT THE CASH MENTIONED IN HIS DIARY WAS ACTUALLY PAID BY HIM TO APPELLANT. SRI RAM GOPAL SARAF WAS EXAMINED ON OATH BY ASSESSING OFFICER AND HE NEVER SAID THAT THE ENTRY OF RS. 3 0 LAKH IN THE DIARY SEIZED FROM HIS POSSESSION REPRESENTED THE PAYMENT OF CASH TO APPELLANT LET ALONE PROVING THE SAME. THE DECISION OF THE APEX COURT IN THE CASE OF CBI VS. V. C. SHUKLA [1998] 3 SCC 410,425, 426, 430 WOULD THEREFORE APPLY IN THIS CASE AND THEREFORE I HOLD THAT NO ADDITION TO THE INCOME OF APPELLANT CAN BE MADE ON THE BASIS OF CERTAIN ENTRIES FOUND IN THE DIARY OF SRI RAM GOPAL SARAF FROM THE POSSESSION OF SRI RAM GOPAL SARAF WHICH ARE NOT CORROBORATED WITH 3 ITA NO. 506 /K/201 0 SHYAM SUNDAR NANGALIA . AY 200 6 - 0 7 ANY INDEPENDENT EVIDENCE FOUND FR OM THE POSSESSION OF THE APPELLANT OR ANY SUCH PROOF SUBMITTED BY SRI RAM GOPAL SARAF. THE ADDITION OF RS 30 LAKH MADE BY ASSESSING OFFICER AS INCOME FROM UNDISCLOSED SOURCES IS THEREFORE DELETED. 5. WE HAVE HEAR RIVAL CONTENTION AND GONE THROUGH FACTS A ND CIRCUMSTANCES OF THE CASE. WE FIND THAT D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS, SRI RAM GOPAL SARAF WAS EXAMINED U / S 131 IN THE PRESENCE OF THE ASSESSEE. HE , ON OATH, DENIED OF KNOWING THE ASSESSEE PERSONALLY AND THAT HE EVER MET HIM PRIOR TO T HE SAID DATE OF EXAMINATION U / S 131 . HE ALSO DID NOT RECOGNIZE THE SEIZED DOCUMENTS RELIED UPON BY THE AO FOR MAKING THE ADDITION OF RS. 30,00,000. THE ASSESSEE ALSO EXPLAINED THAT IN ABSENCE OF ANY CORROBORATIVE EVIDENCE FOUND DURING THE COURSE OF SEARCH AT HIS PREMISES, NO ADDITION COULD BE MADE . IT WAS ALSO SLATED BEFORE THE AO THAT EVEN ASS UMING BUT NOT ADMITTING THE FACT OF SUCH PAYMENT, THERE W AS NO EVIDENCE OF ANY EARNING OF ANY INCOME REPRESENTING THE SAID AMOUNT. T HE FACTS OF THE CASE SHOW THAT AO HAS MADE ADDITION ON THE BASIS OF A DIARY FOUND FROM THE POSSESSION OF SRI RAM GOPAL SARAF AS HE HAD EXAMINED SRI RAM GOPAL SARAF WHO DENIED EVEN KNOWING THE ASSESSEE PERSONALLY AND DID NOT CONFIRM THE ENTRIES OF PAYMENT OF CASH OF RS 30 LAKH TO ASSESSEE A PPEARING IN A DIARY FOUND FROM HIS POSSESSION. THE FACTS SHOW THAT ASSESSEE GROUP HAD PURCHASED A LAND IN THE NAME OF ITS GROUP CONCERN BBRL FROM HOSD C L OF SRI RAM GOPAL SARAF GROUP. THE POSSIBILITY OF GETTING BACK THE PURCHASE CONSIDERATION IN CASH BY APP ELLANT FOR THIS DEAL IS REMOTE AS THE LAND IS FINALLY REGISTERED IN THE NAME OF BBRL. THE PRESUMPTION OF AO THAT A SSESSEE MUST HAVE GIVEN ADVANCE IN CASH WHICH HE GOT BACK AFTER CHEQUE WAS PAID BY BBRL TO HOSDCL IS NEITHER MENTIONED IN THE DIARY NOR WAS CO NFIRMED BY SRI RAM GOPAL SARAF IN HIS STATEMENT ON OATH. IN FACT THE SUGGESTION OF A SSESSEE THAT SRI RAM GOPAL SARAF WOULD HAVE SIPHONED OFF THE SUM OF RS 30 L AKH FROM HOSDCL BY USING A SSESSEE 'S NAME IN HIS DIARY TO SHOW TO HIS C O - DIRECTORS IS EQUALLY APP L ICABLE AS THE PRESUMPTION OF AO. WE ARE OF THE VIEW THAT UNLESS CONTRARY IS PROVED, THE PRESUMPTION OF POSSESSION HAS TO BE ACCEPTED. TH E CASH ENTRIES IN THE DIARY OF SRI RAM GOPAL SARAF HAVE TO BE PRESUMED TO BE BELO NGING TO HIM UNLESS PROVES OTHERWISE. T HE PREMISES OF A SSESSEE WERE ALSO SEARCHED AND THERE IS NOTHING IN THE ASSESSMENT ORDER WHICH CAN SHOW THAT THERE WAS ANY CORROBORATIVE EVIDENCE FOUND FROM THE PREMISES OF THE A SSESSEE WHICH COULD CORROBORATE THE ENTRIES FOND IN THE DIARY FROM THE POSSESSION OF SRI RAM GOPAL SARAF. WE FIND FROM THE FACTS OF THE CASE THAT ASSESSEE HAS CLEARLY DENIED THE RECEIPT OF ANY CASH FROM SRI RAM GOPAL SARAF BEFORE THE ASSESSING OFFICER. UNDER 4 ITA NO. 506 /K/201 0 SHYAM SUNDAR NANGALIA . AY 200 6 - 0 7 SUCH CIRCUMSTANCES, THE ONUS IS ON SRI RAM GOPAL SARAF TO PROVE THAT THE CASH MENTIONED IN HIS DIARY WAS ACTUALLY PAID BY HIM. SRI RAM GOPAL SARAF WAS EXAMINED ON OATH BY AO AND HE NEVER SAID THAT THE ENTRY OF RS. 30 LAKH IN THE DIARY SEIZED FROM HIS POSSESSIO N REPRESENTED THE PAYMENT OF CASH TO A SSESSEE LET ALONE PROVING THE SAME. T HEREFORE , WE ARE OF THE VIEW THAT NO ADDITION TO THE INCOME OF A SSESSEE CAN BE MADE ON THE BASIS OF CERTAIN ENTRIES FOUND IN THE DIARY OF SRI RAM GOPAL SARAF FROM THE POSSESSION OF SRI RAM GOPAL SARAF WHICH ARE NOT CORROBORATED WITH ANY INDEPENDENT EVIDENCE FOUND FROM THE POSSESSION OF THE A SSESSEE OR ANY SUCH PROOF SUBMITTED BY SRI RAM GOPAL SARAF. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION. THIS ISSUE OF REVE NUE S APPEAL IS DISMISSED. 6 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED . 7 . ORDER IS PRONOUNCED IN THE OPEN COURT . SD/ - SD/ - ( P. K. BANSAL ) (MAHAVIR SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED : 2 1 ST MAY , 201 5 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT SHYAM SUNDAR NANGALIA,32C, NEW ROAD, ALIPORE, KOLKATA - 27 . 2 RESPONDENT D CIT , CC - XXVII, KOLKATA . 3 . THE CIT (A), KOLKATA 4. 5. CIT, KOLKATA DR, KOLKATA BENCHES, KOLKATA ASSTT. REGISTRAR .