Sri. Tulasiram, Channapatna V. ITO, Mandya

ITA 537/BANG/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9427 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 23-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA.537/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A NO.537/BANG/2016 (ASSESSMENT YEAR : 2008-09) SHRI. TULASIRAM, PROP : PRIYANKA BANKERS & JEWELLERS, H. NO.804A, M. G. ROAD, CHANNAPATNA, RAMNAGARA DISTRICT .. APPELLANT PAN : AASPR6317F V. INCOME-TAX OFFICER, WARD 3, MANDYA .. RESPONDENT ASSESSEE BY : SMT. PRATIBHA R, ADVOCATE REVENUE BY : SHRI. BIPIN C. N, JCIT HEARD ON : 13.07.2016 PRONOUNCED ON : 26 .08.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY ASSESSEE ITS GRIEVANCE IS THAT AO HAD MADE AN ADDITION OF RS.5,50,000/- FOR UNACCOUNTED STOCK OF PAWNED ARTICLES AND RS.25,00,000/- FOR UNACCOUNTED SALES. ITA.537/BANG/2016 PAGE - 2 02. FACTS RELATED TO THE CASE ARE THAT ASSESSEE ENG AGED IN THE BUSINESS OF JEWELLERY AND PAWN BROKING HAD FILED HIS RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS.19,35,370/-. THERE WAS A SURVEY IN THE PREMISES OF THE ASSESSEE U/S.133A OF THE INCOME -TAX ACT, 1961 (THE ACT IN SHORT). DURING THE COURSE OF SURVEY ON 17. 01.2008 AUTHORITIES FOUND THAT ASSESSEE HAD UNACCOUNTED STOCK OF PAWNED ARTIC LES OF RS.31,43,251/-. IN THE STATEMENT RECORDED FROM THE ASSESSEE, IT SEE MS HE OFFERED AN INCOME OF RS.25 LAKHS FOR A. Y. 2008-09 ON ACCOUNT OF UNAC COUNTED STOCK AND RS.2,50,000/- ON ACCOUNT OF UNACCOUNTED SALES. HOW EVER IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSMENT YEAR ASSES SEE DECLARED ONLY RS.19,50,000/-. EXPLANATION OF THE ASSESSEE WAS TH AT THE SUM OF RS.19,50,000/- COVERED DISCREPANCY NOTED DURING THE SURVEY. HOWEVER THIS WAS NOT ACCEPTED BY THE AO. ACCORDING TO HIM IN TH E STATEMENT RECORDED ON 18.02.2008, HE HAD AGREED TO DECLARE RS.25,00,00 0/- AND RS.2,50,000/- AS ADDITIONAL INCOME IN ADDITION TO THE REGULAR INC OME FOR THE IMPUGNED ASSESSMENT YEAR. FURTHER AS PER THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A. Y 2007-08 ALSO ASSESSEE HAD AGRE ED TO DECLARE THE ABOVE MENTIONED INCOME IN A. Y 2008-09. THUS AO WAS OF T HE OPINION THAT ASSESSEE HAD NOT KEPT HIS WORD NOR GIVEN VALID EXPL ANATION FOR THE ITA.537/BANG/2016 PAGE - 3 DISCREPANCIES FOUND AT THE TIME OF SURVEY. HE MADE AN ADDITION OF RS.8 LAKHS [RS.5,50,000 + RS.2,50,000]. 03. APPEAL OF THE ASSESSEE BEFORE THE CIT (A) DID N OT MEET WITH ANY SUCCESS. 04. NOW BEFORE US, LD. AR SUBMITTED THAT THE ADDITI ONS WERE SOLELY BASED ON STATEMENTS RECORDED AT THE TIME OF SURVEY. RELYING ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F CIT V. KHADER KHAN SON [(2008) 300 ITR 157], LD. AR SUBMITTED THA T ADDITION MADE SOLELY BASED ON THE STATEMENTS RECORDED DURING THE COURSE OF SURVEY WOULD NOT STAND SINCE SUCH STATEMENTS HAD NO EVIDENTIARY VALUE. LD. AR POINTED OUT THAT SLP FILED BY THE DEPARTMENT AGAINST THE SA ID JUDGMENT WAS DISMISSED ON 20.09.2012 AND REPORTED AS (2013) 352 ITR 480. FURTHER RELIANCE WAS ALSO PLACED ON HONBLE DELHI HIGH COUR T IN THE CASE OF CIT V. DHINGRA METAL WORKS [(2010) 328 ITR 384]. 05. PER CONTRA, LD. DR SUBMITTED THAT THE ADDITIONS WERE NOT SOLELY BASED ON THE STATEMENTS RECORDED U/S.131 OF THE ACT. ACC ORDING TO HIM THERE WERE TWO STATEMENTS RECORDED FROM THE ASSESSEE. IN THE SECOND STATEMENT ALSO ASSESSEE AGREED TO OFFER AN ADDITIONAL INCOME OF RS .25 LAKHS AND RS.2.5 ITA.537/BANG/2016 PAGE - 4 LAKHS. FURTHER AS PER THE LD. DR ASSESSEE COULD NO T EXPLAIN THE DISCREPANCY OF RS.31,43,251/- IN THE STOCK OF GOLD PAWNED ARTICLES. THUS ACCORDING TO HIM ADDITIONS WERE RIGHTLY DONE BY THE AO. 06. I HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. ASSESSEE HAS NOT DISPUTED THE CONTENTION OF THE REVENUE THAT THERE WAS AN UNACCOUNTED STOCK OF PAWNED ARTICLES OF RS.31,43,25 1/- ON THE DATE OF SURVEY. IT IS TRUE THAT STATEMENT RECORDED DURING THE COURSE OF SURVEY CANNOT BE RELIED ON FOR MAKING AN ADDITION UNDER TH E ACT. JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF KHADER KHA N SONS (SUPRA) HAS LAID DOWN THIS PRINCIPLE AND IT HAS BEEN AFFIRMED B Y THE HONBLE APEX COURT AS WELL. HOWEVER THE ADDITION MADE FOR THE I MPUGNED ASSESSMENT YEAR WAS NOT SOLELY BASED ON THE STATEMENT RECORDED AT THE TIME OF SURVEY. ASSESSEE COULD NOT EXPLAIN THE DIFFERENCE IN UNEXPL AINED STOCK OF RS.31,43,251/-. AT THE SAME TIME, I FIND THAT REVEN UE HAD NOT MADE ANY EFFORT FOR GETTING A RECONCILIATION FROM THE ASSESS EE AND VERIFYING WHETHER THE DIFFERENCE IN STOCK OF PAWNED ARTICLES WERE UNA CCOUNTED OR NOT. SIMILAR IS THE CASE OF UNACCOUNTED SALES. IN THESE CIRCUMS TANCES I AM OF THE OPINION THAT THE MATTER REQUIRES A VERIFICATION BY THE LOWER AUTHORITIES. I REMIT THE ISSUE REGARDING UNACCOUNTED PAWNED ARTICL ES AND UNACCOUNTED ITA.537/BANG/2016 PAGE - 5 SALES BACK TO THE FILE OF AO FOR CONSIDERATION AFRE SH IN ACCORDANCE WITH LAW. 07. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF AUGUST, 2016. SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR