ACIT CIR 18(1), MUMBAI V. GHARANDAJ BUILDERS, MUMBAI

ITA 5366/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55703 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 31-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Business income; Business expenditure
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G BEFORE SHRI J SUDHAKAR REDDY (AM) & SHRI V. DURGA RAO (JM) I.T.A.NO. 5366/MUM/2010 (ASSESSMENT YEAR : 2007-08) ACIT CIRCLE 18(1) 1 ST FLOOR, PIRAMAL CHAMBER LALBAUG MUMBAI-400 012. VS. M/S. GHARANDAJ BUILDERS 803, YASODHAN TOWER OPP. GOA PORTUGUES HOTEL T.H. KATARIA MARG MATUNGA MUMBAI. PAN/GIR NO. : AABFG9249G ASSESSEE BY : SHRI VIJAY KOTHARI DEPARTMENT BY : SHRI A.K. NAYAK DATE OF HEARING : 31.10.2011 DATE OF PRONOUNCEMENT : 31.10.2011 ORDER PER J. SUDHAKAR REDDY, (AM) :- THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF LEARNED CIT(A)-29, DATED 30.4.2010 FOR A.Y. 2007-08 ON THE FOLLOWING GROUND :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN DELETING AN ADDITION OF ` 48,80,528/- MADE TO THE RETURNED INCOME BY ASSESSING OFFICER AS THE ASSESSE E HAD RETRACTED FROM ITS STATEMENT WHEREIN THEY HAD MADE A DISCLOSURE OF ` 1.22 CRORES HOWEVER WHILE FILING THE RETURN OF INC OME HAD DECLARED AN INCOME OF ` 73,19,472/- ONLY. 2. FACTS IN BRIEF. THE ASSESSEE IS A PARTNERSHIP FI RM AND IS IN THE BUSINESS OF CONSTRUCTION AND REAL ESTATE. A SURVEY WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE U/S. 133A ON 28.2.2007, WH EREIN HE STATED THAT CERTAIN CASH ENTRIES WERE FOUND TO BE CREDITED IN T HE DIARY AMOUNTING TO ` 1.18 CROES, FOR WHICH HE COULD NOT GIVE EXPLANATIO N INSTANTLY, DUE TO SHORTAGE OF STAFF AND ILL HEALTH OF FATHER. HE FURT HER STATED THAT DUE TO SHORTAGE OF SPAN OF TIME, THESE FIGURES CANNOT POSS IBLY BE RECONCILED WITH THE FIGURES IN THE INCOMPLETE BOOKS. THEREAFTER, TO AVOID LITIGATION AND FOR PEACE OF MIND, HE MADE A DISCLOSURE OF ` 1.22 CRORES, WITH A CONDITION M/S. GHARANDAJ BUILDERS 2 THAT NO PENALTY SHOULD BE LEVIED. CERTAIN TAXES WER E PAID. THE ASSESSEE FILED A RETURN OF INCOME ON 26.10.2007, SHOWING AN AMOUNT OF ` 1,16,40,580/- AS INCOME OFFERED PURSUANT TO SURVEY ACTION U/S. 133A. AFTER CLAIMING EXPENDITURE, HE DECLARED NET INCOME OF ` 73,19,472/-. THE ASSESSING OFFICER, WHILE ACCEPTING THE INCOME DECLA RED IN THE RETURN, HELD THAT THE ASSESSEE HAS RETRACTED FROM ITS CONFESSION AND MADE AN ADDITION OF ` 1.22 CRORES TO THE RETUNED INCOME. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL. 3. THE FIRST APPELLATE AUTHORITY DELETED THE ADDITI ON TO THE EXTENT OF ` 1,16,40,580/- BY OBSERVING THAT THE ASSESSEE HAD IN FACT DISCLOSED THE AMOUNT DECLARED IN COURSE OF SURVEY, AS ITS INCOME AND THE ASSESSING OFFICER HAS NOT DISPUTED THE EXPENDITURE CLAIMED. A GGRIEVED, THE REVENUE IS IN APPEAL ON THE AFOREMENTIONED GROUND. 4. WE HAVE HEARD SHRI A.K. NAYAK, LEARNED DEPARTMEN TAL REPRESENTATIVE AS WELL AS SHRI VIJAY KOTHARI, LEARN ED COUNSEL FOR THE ASSESSEE. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE DO NOT AGREE WITH THE ARGUMENT OF SHRI NAYAK THAT THE ASSESSEE HAS RETRAC TED FROM ITS STATEMENT. WE ALSO FIND THAT THE ASSESSING OFFICER HAS NOT DONE ANY INVESTIGATION OR FOUND ANY EVIDENCE AGAINST THE ASS ESSEE, CONSEQUENT TO THE CLAIM MADE IN THE RETURN. THE CLAIM OF EXPENDIT URE HAS NOT BEEN DISPUTED NOR FOUND FAULT WITH. THE INCOME HAS BEEN DISCLOSED AS PER THE DECLARATION IN THE SURVEY. ON THIS FACTS, WE UPHOLD THE FOLLOWING FINDINGS OF LEARNED CIT(A) :- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ARGUMENTS OF THE ASSESSING OFFICER AND WRITTEN SUBMISSION OF THE AUT HORIZED REPRESENTATIVE OF THE APPELLANT. THE ISSUE INVOLVED IS WHETHER THE APPELLANT HAS OFFERED TO TAX THE DISPUTED AMOUNT OF ` 1.22 CRORES DECLARED AFTER THE SURVEY U/S. 133A OF THE I.T. ACT . IT IS APPARENT THAT THE APPELLANT HAS OFFERED THIS AMOUNT IN PROFI T AND LOSS ACCOUNT FOR F.Y. 2006-07. THE AMOUNT HAS BEEN OFFER ED AS INCOME OF THE FINANCIAL YEAR BY MENTIONING INCOME OFFERED PURSUANT TO SURVEY ACTION 133A : 1,16,40,580/- . ONLY ISSUE IS THAT THE INCOME OFFERED IS ` 1,16,40,580/- AND NOT ` 1,22,00,000/- AS DECLARED IN THE SO CALLED LETTER FILED BEFORE THE A SSESSING OFFICER. THE EXPENSES CLAIMED HAVE BEEN DULY EXAMINED BY THE ASSESSING OFFICER AND THERE IS NO ADVERSE EVIDENCE OR INFEREN CE DRAWN. HENCE IT CANNOT BE SAID THAT INCOME ASCERTAINED FROM THE DIARY OR M/S. GHARANDAJ BUILDERS 3 DISCLOSURE AFTER SURVEY WAS NOT OFFERED FOR TAXATIO N. AS REGARDS THE QUANTUM OFFERED TO TAX IT CAN BE SEEN THAT THERE WA S A DISCLOSURE OF ` 1,22,00,000/- AND NOT ` 1,16,40,580/-. HENCE APPELLANT HAS UNDERSTATED THE ACCEPTED INCOME BY ` 5,59,420/-. THERE IS NO APPARENT REASON WHY THE OFFERED AMOUNT WAS REDUCED TO THIS EXTENT. ASSESSING OFFICER WILL BE JUSTIFIED TO BRIN G TO TAX ONLY THIS ADDITIONAL AMOUNT OF ` 5,59,420/- AND NOT ` 48,80,528/- WHICH HAS BEEN ADDED BY HIM TO THE DECLARED INCOME OF ` 73,19,472/-. IN FACT THE DECLARED AMOUNT HAS BEEN OFFERED TO TAX AS BUSINESS INCOME AND LEGITIMATE BUSINESS EXPENSES HAVE BEEN C LAIMED AGAINST THE SAME. HENCE, OUT OF A TOTAL ADDITIONS O F ` 48,80,528/- MADE BY THE ASSESSING OFFICER AN AMOUNT OF ` 5,59,420/- IS UPHELD AND THE BALANCE ADDITION IS DELETED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 31.10.2011. SD/- (V.DURGA RAO) JUDICIAL MEMBER SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED : 31 ST OCTOBER, 2011. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS