SHRI ROSHAN LAL, Jaipur V. DCIT, Alwar

ITA 640/JPR/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5202 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R PAREEK JCIT DHK
• Assessee Lawyers: MAHENDRA GARIEYA
• Keywords: Rejection of books of accounts; Unexplained investment; Unexplained expenditure; Business income; Loose papers; Commercial expediency
• Section: 131; 145

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 VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.640/JP/11 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03 SHRI ROSHANLAL SONI C/O ROSHANLAL & SONS (JEWELERS) LAMBA BAZAR. KOTPUTLI CUKE VS. DCIT, CIRCLE-2, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGCPS 8689 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.677, 678,679 & 680/JP/11 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99 TO 2001-02 SHRI ROSHANLAL SONI C/O ROSHANLAL & SONS (JEWELERS) LAMBA BAZAR. KOTPUTLI CUKE VS. DCIT, CIRCLE-2, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGCPS 8689 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARIEYA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI G.R. PAREEK (J CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.05.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/08/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 2 THESE ARE CONNECTED FIVE APPEALS PERTAINING TO A.Y. 2002-03 & A.Y. 1998-99 TO A.Y. 2001-02 FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) ALWAR DATED 20.04.2011 FOR AY 2002-03 AND D ATED 20.05.2011 FOR A.Y. 1998-99 TO 2001-02 WHICH WERE HEARD TOGETHER AND DI SPOSED OFF BY THIS COMMON ORDER. FIRST, WE TAKE UP APPEAL FOR AY 2002 -03 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: A.Y. 2002-03 (1) THE LD. AO HAS ERRED IN MAKING TRADING ADDITION OF RS. 56,201/- AND CIT(A) HAS ERRED IN CONFIRMING THE SAME. (2) THE LD. AO HAS ERRED IN MAKING TRADING ADDITION OF RS. 5,52,740/-ON ACCOUNT OF UNDISCLOSED INCOME IN THE FORM OF UNDISC LOSED DEBTORS AND CIT(A) HAS ERRED IN CONFIRMING THE SAME. (3) THE LD. AO HAS ERRED IN MAKING TRADING ADDITIO N OF RS.5000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES AND CIT(A) HAS ERRED IN RESTRICTING IT RS. 5000/-. 2. IN RESPECT OF GROUND NO.1, THE BRIEF FACTS OF TH E CASE THAT THE AO OBSERVED THAT THE ASSESSEE HAD SHOWN SALE OF GOLD A ND SILVER ORNAMENTS AT RS.7,73,550/- GIVING GP RATE @ 13.11%. HE ALLEGED T HAT THE PURCHASES MADE FROM CUSTOMERS, ARE NOT VERIFIABLE AND THE ORNAMENT S WERE SOLD BY CHARGING RATE OF GOLD ITSELF WITHOUT DEDUCTING ANY AMOUNT FO R SEMI PRECIOUS STONES. THE MAKING CHARGES WERE COLLECTED SEPARATELY. FINALLY, THE AO REJECTED THE BOOKS RESULT U/S 145(3) AND ESTIMATED THE SALE AT RS.8 LA CS AND ALSO APPLIED THE GP RATE @20%. THE DIFFERENCE OF RS.56,223/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 2.1 IN THE FIRST APPEAL, THE LD. CIT(A) HELD AS UND ER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL A S SUBMISSION OF THE ASSESSEE, IT IS FOUND THAT DURING THE COURSE OF SUR VEY VARIOUS DISCREPANCIES WERE FOUND IN STOCK, IN DEBTORS, IN S ALE AND PURCHASE AND EXPENSES ALSO. FURTHER PURCHASES WERE MADE FROM THE VILLAGERS, WHICH CANNOT BE VERIFIED IN ABSENCE OF COMPLETE DETAILS. THE SALE WAS HARDLY ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 3 INCREASED RS.26,450/-. THE ASSESSEE HAD SHOWN 13.11 % GP IN THE RETURN. THE ASSESSEE HAD NOT SUBMITTED ANY PAST FIGURES OF PRECEDING YEARS WHICH FAVOUR OF THE ASSESSEE. THEREFORE, ADDITION I S CONFIRMED. THE APPEAL ON THIS GROUND IS DISMISSED. 2.2 THE LD. AR SUBMITTED THAT FIRSTLY, HE STRONGLY RELY UPON THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) WHEREIN IT WAS SUBMITTED AS UNDER: 1. INVALID APPLICATION OF SEC.145: AT THE OUTSET W E MAY SUBMIT THAT THE LD. AO WRONGLY INVOKED SEC.145 ON THE FACTS AND LAW . THIS IS FOR THE REASON THAT THE APPELLANT HAS BEEN MAINTAINING COMP LETE BOOKS OF ACCOUNTS CONSISTING OF CASH-BOOK, JOURNAL, LEDGER. ITS ENTIRE PURCHASES AND SALES ARE VOUCHED. IT IS DIFFICULT TO KEEP ADDR ESS IN CASE OF ALL THE PURCHASES. THE APPELLANT HAD MAINTAINED DETAILS WIT H REGARD TO THE PURCHASE. THE PURCHASES ARE MADE NORMALLY BY THE AS SESSEE FROM THE VARIOUS VILLAGERS WHO COME AT THE SHOP ITSELF AND S OLD THEIR OLD GOLD ORNAMENTS. THE APPELLANT HAS MENTIONED THEIR NAMES AND ADDRESSES IN THE LEDGER ALSO. HOWEVER THE PRECISE DETAIL WITH RE GARD TO HOUSE NO. ETC. MAY NOT BE AVAILABLE IN RURAL AREA AND IS PRACTICAL LY DIFFICULT. SECONDLY, THE ANOTHER OBJECTION OF THE AO IS ALSO B ASELESS IN AS MUCH AS THE APPELLANT HAS ALREADY BEEN CHARGING SEPARATELY FOR THE MAKING OF THE ORNAMENTS AS MAKING CHARGES. THIS BEING A PART OF T HE TRADING ACCOUNT ALREADY STANDS INCLUDED IN THE GROSS PROFIT DECLARE D. THE A.O HAS MERELY PROCEEDED ON A SUSPICION PRESUMP TIONS AND ASSUMPTIONS. HE NEVER CONFRONTED THE APPELLANT SPEC IFICALLY ON THESE ASPECTS. HE HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF THE BOOKS OF ACCOUNTS. HENCE INVOKING OF SEC.145 (3) IS THEREFORE, BAD IN LAW ON FACTS AND MAY KINDLY BE QUASHED. 2.3 THE LD AR FURTHER SUBMITTED THAT ALTERNATIVELY ON MERITS, ADDITION NEED NOT BE MADE EVEN IF SEC.145 IS INVOKED KEEPING IN VIEW THE LEGAL POSITION AS LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT VS. GOTAN LIME KHANIZ UDYOG 169 CTR 318 (RAJ), WHEREIN IT HAS BE EN HELD THAT MERE REJECTION OF BOOKS OF ACCOUNTS NEED NOT NECESSARILY LEAD TO A DDITIONS TO THE RETURNED INCOME. IT WAS ALSO HELD THAT THE BOOKS OF ACCOUNT , TOGETHER WITH PAST HISTORY OF THE CASE AS ALSO MATERIAL COLLECTED BY THE AO WILL FORM THE BASIS FOR MAKING ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 4 THE ADDITIONS. EVEN ON MERITS THERE IS NO BASIS AS TO WHY THE LD. AO SHOULD HAVE ENHANCED THE SALE FROM RS.7.73 LACS TO RS.8 LACS. T HERE IS NO BASIS AT ALL GIVEN BY HIM. THE ENTIRE ADDITIONS THEREFORE, MAY KINDLY BE DELETED IN FULL. 2.4 THE LD DR IS HEARD WHO HAS RELIED ON THE ORDER OF LOWER AUTHORITIES. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE APPELLANT HAS NOT TAKEN ANY GROUNDS BEFORE US RELATING TO REJECTION OF BOOKS OF ACCOUNTS UNDER SECTION 145(3) AND HENCE, THE CONTENTION OF THE LD AR REGARDING INVALID APPLICATION OF SECTI ON 145 CANNOT BE ACCEPTED. REGARDING ESTIMATION OF SALES AT RS 8 LACS AS AGAIN ST DECLARED SALES OF RS 7.73 LACS BY THE ASSESSEE IN ITS RETURN OF INCOME, NO BA SIS OR JUSTIFICATION HAS BEEN GIVEN BY THE AO. FURTHER, THE BASIS OF ESTIMATION OF G.P @ 20% AS AGAINST DECLARED G.P OF 13.11% IS ALSO NOT CLEAR FROM THE A SSESSMENT ORDER. INSPITE OF THE FACT THAT THE BOOKS OF ACCOUNTS HAVE BEEN REJEC TED, THE ESTIMATION OF SALES AND G.P NEED TO NECESSARILY HAVE SOME RATIONAL AND REASONABLE BASIS WHICH IS ABSENT IN THE INSTANT CASE. HENCE, THE TRADING ADD ITION OF RS 56,223 IS DELETED AND THE GROUND OF THE ASSESSEE IS ALLOWED. 3. IN RESPECT OF GROUND NO.2, THE BRIEF FACTS OF TH E CASE ARE THAT THE AO OBSERVED THAT DURING THE COURSE OF SURVEY, A KATURI A NOTE BOOK CONTAINING 35 PAGES WAS FOUND AND IMPOUNDED WHICH CONTAINED OUTST ANDING BALANCES OF THE ASSESSEE AGAINST DIFFERENT PERSONS ON ACCOUNT OF TH E SALE. THE OUTSTANDING BALANCES AS ON 10.08.2001 BEING DATE OF SURVEY I.E. FOR THE 1/4 TH PERIOD OF F.Y. 2001-02,(A.Y. 2002-03) WERE RS.4,45,424/-. SIMILARL Y, AS PER ANNEXURE A-12 TO A- 17, BEING LOOSE PAPERS, THE OUTSTANDING OF DEBTORS FOR THE SAME PERIOD WERE WORKED OUT AT RS.1,07,316/- , TOTALING TO RS.5,52,7 40/-. THE AO ALLEGED THAT THIS IS IN ADDITION TO THE AMOUNT OF RS.3,06,080/- DECLA RED BY THE ASSESSEE IN RETURN OF INCOME ON THE BASIS OF LOOSE PAPERS FOUND AT THE TIME OF SURVEY. FURTHER, AS THERE WAS NO INFORMATION REGARDING THE RATE OF INTE REST ETC. ON DEBTORS, THE AO CALCULATED INTEREST @ 20% ON DEBTORS OF EARLIER YEA RS OF RS.15,48,142/- WHICH CAME TO RS 3,09,628/-. THUS, TOTAL ADDITION OF OUTS TANDING DEBTORS AND INTEREST ON THE OLD DEBTORS, OF RS.8,62,368/- WAS MADE IN TH E INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME. 3.1 ON APPEAL, THE LD. CIT(A) HAS DELETED THE NOTIO NAL INTEREST OF RS.3,09,628/- AND CONFIRMED THE ADDITION OF RS.5,52 ,740/- ON ACCOUNT OF ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 5 OUTSTANDING DEBTORS AGAINST WHICH THE ASSESSEE IS I N APPEAL BEFORE US. THE RELEVANT FINDINGS OF LD CIT(A) ARE AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL A S SUBMISSION OF THE ASSESSEE AND CASE RELIED UPON WHICH ARE NOT SQUAREL Y APPLICABLE ON THE ASSESSEE. IT IS FOUND THAT THE COPY OF ACCOUNT IN T HE JOURNAL REGISTER DATED 10.08.2001 HAS BEEN GIVEN TO THE ASSESSEE ALO NG WITH THE LETTER DATED 20.02.2005 FOR VERIFICATION OF UDHARI ACCOUN T. THE ASSESSEE HAD DISCLOSED RS.3 LAC ON ACCOUNT OF THESE OUTSTANDING DEBTORS. THE DIARY KATURIA NOTE BOOK ANNEXURE A-9 IS CONTAINING 35 WRI TTEN PAGES. THE AO ASKED THE ASSESSEE TO GIVE THE NARRATION PERTAINING TO YEAR UNDER CONSIDERATION AND EARLIER YEAR ALSO. THE ASSESSEE H AD SUBMITTED CHART IN WHICH ENTRIES WORTH RS.3,87,581/- FOR AY 2002-03 AN D EARLIER YEAR ALSO RS.13,55,350/- WERE NOTED. THE AO VERIFIED THE DEBT ORS DATE WISE ON THE BASIS OF DAIRY AND HE WORKED OUT THE DEBTORS FOR TH E PERIOD 01.04.2001 TO 10.08.2001 AT RS. 4,45,424/- AND WORTH RS.14,11,308 /- FOR EARLIER YEAR. SIMILAR WORKING OF DEBTORS ON THE BASIS OF ENTRIES MADE LOOSE VOUCHERS WAS PREPARED FOR OTHER ANNEXURE INCLUDING A-12 TO A -17 BY THE AO IN WHICH DEBTORS WERE WORKED OUT RS.1,07,316/- FOR THE YEAR UNDER CONSIDERATION AND RS.1,36,834/- FOR EARLIER YEARS. THE AO HAD VERIFIED THE EACH AND EVERY ITEMS AS ASSESSEE HIMSELF ADMITTED A ND DISCLOSED ADDITIONAL INCOME ON ACCOUNT OF UDHARI AT RS.3 LAC ON 21.08.2001 U/S 131 OF IT ACT IN PRESENCE OF ADVOCATE SHRI A.K.BANS AL. BUT FULL VERIFICATION OF THESE PAPERS WERE MADE AT THE TIME OF ASSESSMENT BY THE AO WITH REGULAR BOOKS OF ACCOUNT AS WELL AS LIST OF DEBTORS DISCLOSED BY THE ASSESSEE. I HAVE ALSO GONE THROUGH THE PHOTOCOPY OF THE ABOVE LOOSE PAPERS AND PHOTOCOPY OF THE DIARY (KATURIA NOTE BOO KS) DURING THE COURSE OF APPELLANT PROCEEDING WHICH SHOWS CLEARLY DEBTORS AS WHEN THE ASSESSEE RECOVERED THE MONEY FROM THE DEBTORS THE A SSESSEE MAKES TICK MARK ON IT. IT MEANS THE AMOUNT HAS BEEN RECOVERED AND REMAINING ENTRIES ARE OUTSTANDING DEBTORS. THIS MATTER WAS RE MANDED BACK TO THE AO WHO HAS AGAIN GIVE THE OPPORTUNITY TO THE ASSESS EE BUT THE ASSESSEE HAS NOT CONTRA-VERTED THE FINDINGS OF THE AO. THERE FORE, THE ADDITION OF RS.5,52,740/- IS CONFIRMED ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 6 3.2 THE LD. AR OF THE ASSESSEE SUBMITTED THAT FIRS TLY, HE STRONGLY RELY UPON THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) . IT WAS FURTHER SUBMITTED THAT IT WAS A CASE OF DOUBLE ADDITION. IN THIS REG ARD, IT WAS SUBMITTED THAT THE AO STARTED HIS COMPUTATION OF TOTAL INCOME BASED ON THE INCOME DECLARED OF RS.30,45,945/- IN THE ROI FILED ON DT. 31.03.2003 A S ADMITTED BY AO AT PG 1 PR 1 OF AO. HE ALSO ADDED RS.420/- AND RS.6,00,251/- THE RETO BEING THE INCOME SURRENDERED AS DECLARED IN THE RETURN OF INCOME AND THEREAFTER, HE MADE A SEPARATE ADDITION OF RS.8,62,368/- WHICH INCLUDES T HE ADDITION ON ACCOUNT OF OUTSTANDING DEBTORS. A PERUSAL OF THE COMPUTATION ( ANNEXED HEREWITH) WILL SHOW THAT THE ASSESSEE HAS INCLUDED THE INCOME SURR ENDERED UNDER THE HEAD BUSINESS INCOME OF RS.30,13,140/- + RS.6,00,000/- TOTALING TO RS.36,13,140/-. THE BREAKUP OF THE INCOME SO SURRENDERED IS AVAILAB LE AT PG 2 OF THE AO WHICH SHOWS TRADE DEBTORS OUTSTANDING, SURRENDERED AT RS. 3,00,000/-. THEREFORE, MATHEMATICALLY SPEAKING THE ADDITION OF RS.5,52,740 /- MADE ON ACCOUNT OF THE OUTSTANDING DEBTORS, IS A DOUBLE ADDITION OF THE SA ME INCOME ATLEAST TO THE EXTENT OF RS.4,00,000/-, AS AFORESAID. THOUGH THIS CONTENTION WAS TAKEN BEFORE THE CIT(A) IN THE WRITTEN SUBMISSION FILED AND ALSO STATED AT PG 4 OF THE CIT(A) ORDER YET HOWEVER, HE DID NOT SPECIFICALLY DEAL WIT H AND ALLOWED NO RELIEF ON THIS ACCOUNT EVEN. THEREFORE, THE FINDING OF THE AO RECORDED THAT THE SURRENDER WAS IN ADDITION TO THE AMOUNT OF RS.3,06, 080/- DECLARED BY THE ASSESSEE IN RETURN OF INCOME ON THE BASIS OF LOOSE PAPERS FOUND AT THE TIME OF SURVEY, IS CONTRARY TO THE RECORD. 3.3 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED T HAT IN ANY CASE, THIS ADDITION (IF SUSTAINED FULLY OR PARTLY) HAS TO BE S ET OFF AGAINST THE UNEXPLAINED ASSETS ALREADY DISCLOSED AT RS.36,16,140/-, FOR THE DETAILED REASONS SUBMITTED IN SEPARATE WRITTEN SUBMISSION DATED 11.03.2016 FOR OTHER YEARS. 3.4 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED T HAT THE AO IN ALL THE YEARS WHILE MAKING ADDITION OF OUTSTANDING DEBTORS ALLEGE D THAT THIS WAS ADMITTED BY APPELLANT IN HIS STATEMENT RECORDED ON 10.08.01. HOWEVER, WE MAY SUBMIT THAT THESE STATEMENTS WERE RECORDED DURING THE COUR SE OF SURVEY AND THE POSSIBILITY OF THE EXISTENCE OF TENSED AND SURCHARG ED ATMOSPHERE IN THE CASE OF SEARCH CANNOT BE RULED OUT - KINDLY REFER JAGDISH N ARAIAN RATAN KUMAR 22 TW 209(JP). THESE STATEMENTS THEREFORE, ARE NOT AT ALL RELIABLE IN VIEW OF THE ABOVE SUBMISSIONS AND FACTUAL LEGAL & POSITION. IT IS SUB MITTED THAT THE AMOUNT RS. ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 7 5.52 LACS AND SIMILAR ADDITIONS MADE IN OTHER YEARS , CANNOT BE TREATED TO BE AN INCOME MERELY ON THE BASIS OF THESE STATEMENT IN AB SENCE OF ANY DIRECT COGENT EVIDENCE. THEREFORE, NO ADVERSE INFERENCE SHOULD BE TAKEN FROM THESE STATEMENTS. ALTERNATIVELY, IT WAS SUBMITTED THAT TH E OTHER PART OF THE STATEMENTS WHERE THE ASSESSEE HAS REPEATEDLY SUBMIT TED THAT THE UNEXPLAINED ASSETS ALREADY DISCLOSED AT RS.36,13,140/- CAME OUT OF THE RECOVERIES FROM THE OUTSTANDING DEBTORS AND THE INCOME THERE FROM, AS D ETAILED IN OUR SUBMISSION DT. 11.03.2016 FOR OTHER YEARS, MUST HAVE BEEN ACCE PTED. 3.5 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED TH AT THE LD. AO SILENTLY ACCEPTED THE SURRENDER SO MADE AND WAS NOT AT ALL A BLE TO LAY HIS HANDS ON ANY OTHER CORROBORATIVE COGENT EVIDENCE TO SUPPORT THIS ALLEGED ADMISSION BY THE APPELLANT. NO INQUIRY OF ANY NATURE FROM THE DEBTO RS, IF ANY, AS SUCH WAS MADE. NOTABLY DURING THE COURSE OF SURVEY ALSO NO O THER EVIDENCE WAS FOUND SUGGESTING ANY PAYMENT RECEIVED OR RECOVER FROM DEB TORS. IN SUPPORT, RELIANCE WAS PLACED ON CIT V. DIPLAST PLASTICS LIMITED [2010 ] 327 ITR 399 (P & H ), CBI VS. V.C. SHUKLA (1998) 3 SCC 410 AND ACIT V/S OM PRAKA SH & CO.87 TTJ 183 (BOM) 3.6 THE LD DR IS HEARD WHO HAS RELIED ON THE ORDER OF LOWER AUTHORITIES. 3.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE ADDITION OF RS. 5, 52,740/- ON ACCOUNT OF OUTSTANDING DEBTORS HAS BEEN MADE BY THE AO BASED O N EXAMINATION OF DIARY KATURIA NOTE BOOK (ANNEX. A-9) AS WELL AS LOOSE PAP ERS MARKED AS ANNEX. 12 TO 17. IN THE RETURN OF INCOME FILED BY THE ASSESSEE SUBSEQUENT TO THE SURVEY PROCEEDINGS, THE ASSESSEE HAS DECLARED A SUM OF RS. 3,06,080/- IN ITS RETURN OF INCOME TOWARDS OUTSTANDING TRADE DEBTORS. AS PER TH E AO, THE FIGURE OF RS. 5,52,740/- IS IN ADDITION TO THE AMOUNT OF RS. 3,00 ,680/- DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME ON THE BASIS OF L OOSE PAPERS FOUND AT THE TIME OF SURVEY. 3.8 WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECOR D AND FIND THAT THE DISCLOSURE MADE BY THE ASEESSEE AS WELL AS THE ADDI TIONS MADE BY THE AO FLOW FROM THE SAME SET OF DOCUMENTS NAMELY THE KATURIA N OTE BOOK AS WELL AS ANNEX. A -12 TO A-17 FOUND DURING THE COURSE OF SUR VEY. GIVEN THAT THE AO HAS VERIFIED THE ENTRIES AND WORKED OUT THE OUTSTANDING DEBTORS FOR THE YEAR UNDER CONSIDERATION AS WELL AS FOR THE PREVIOUS YEARS, WE DO NOT SEE A BASIS TO HOLD ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 8 THAT THE SURRENDER MADE BY THE ASSESSEE OF RS.3,06, 080/- IS IN ADDITION TO RS. 5,52,740/- WORKED OUT BY THE AO. IN LIGHT OF THAT, WE AGREE WITH THE CONTENTIONS OF THE LD. AR THAT THERE IS DOUBLE ADDI TION WHICH HAS HAPPENED TO THE EXTENT OF RS. 3,06,080/- HENCE WE RESTRICT THE SUBJECT ADDITION ON ACCOUNT OF OUTSTANDING DEBTORS TO THE EXTENT OF RS., 2,46,0 60/-. 3.9 FURTHER IN LIGHT OF HONBLE SUPREME COURTS DEC ISION IN CASE OF ANANTHARAM VEERSINGHAIAH & CO. 123 ITR 457 AND HON BLE RAJASTHAN HIGH COURT IN THE CASE OF TYARYAMAL BALCHAND 165 ITR 45 3 AND BASIS DETAIL REASONING GIVEN IN SUBSEQUENT YEARS (REFER PARA 5.13), THE AD DITION TOWARDS OUTSTANDING DEBTORS OF RS 2,46,060 SHALL BE COVERED BY THE UNEX PLAINED ASSETS SURRENDERED AND DISCLOSED BY THE ASSESSEE AMOUNTING TO RS.36,16 ,140/-. HENCE, THE SAME HAS TO BE TELESCOPED AND CANNOT BE BROUGHT TO TAX S EPARATELY. IN LIGHT OF THAT, WE DELETE THE WHOLE OF ADDITIONS TOWARDS THE OUTSTA NDING TRADE DEBTORS. THE GROUND NO. 2 OF THE ASSESSEE IS THUS ALLOWED. 4. REGARDING GROUND NO. 3, THE BRIEF FACTS OF THE C ASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED SHOP EXPENSE S RS.30,630/- WHICH WERE NOT SUPPORTED WITH ORIGINAL VOUCHERS/RECEIPTS. THE AO CONSIDERED RS.5,000/- AS PERSONAL NATURE. IN THE FIRST APPEAL, THE LD. CI T(A) HELD THAT THE PERSONAL ELEMENT IN SHOP EXPENSES CAN NOT BE RULED OUT BUT A DDITION APPEARS TO HIGHER SIDE. THEREFORE, I RESTRICT THIS ADDITION RS.3,000/ -. THE ASSESSEE GETS RELIEF OF RS.2,000/-. 4.1 THE LD. AR SUBMITTED THAT A BARE READING OF THE ORDER OF LOWER AUTHORITY SHALL REVEAL THAT IN ALMOST ALL THE CASES, THE DISA LLOWANCES HAVE BEEN MADE ON AD HOC BASIS, SIMPLY ON MERE SUSPICION, SURMISES AN D CONJECTURES. NO SPECIFIC INSTANCE OF ANY NATURE WHATSOEVER HAS BEEN GIVEN BY THE AO IN THE IMPUGNED ORDER TO SUPPORT HIS CONTENTION WITH THE DOCUMENTAR Y EVIDENCE THAT THE EXPENDITURES WERE INCURRED FOR NON-BUSINESS PURPOSE S, ELEMENT OF PERSONAL USER WAS THERE. AN ALLEGATION REMAINS A MERE ALLEGA TION UNLESS PROVED. SUSPICION CANNOT TAKE THE PLACE OF REALITY IS A SET TLED PRINCIPLES AS HELD KINDLY REFER DHAKESHWARI COTTON MILLS 26 ITR 775 (SC). 4.2 THE LD AR FURTHER SUBMITTED THAT IT IS A SETTLE D LAW THAT A BUSINESSMAN IS THE BEST JUDGE TO TAKE CARE OF ITS OWN INTEREST & T O TAKE DECISIONS AND THE AO IS NOT SUPPOSED TO INTERVENE THEREIN NOR HE CAN REPLAC E THE ASSESSEE. HERE, ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 9 WHATEVER DECISIONS WERE TAKEN BY THE ASSESSEE, HAS TO BE UNDERSTOOD AS TAKEN OUT OF COMMERCIAL EXPEDIENCY. KINDLY REFER T.T. (P) LTD. V/S CIT (1980) 121 ITR 551 (KAR), CIT V/S UDHOJI SHRIKRISHNADAS (1983) 139 ITR 827 (MP) JK WOOLEN MANUFACTURERS 72 ITR 612 (SC).HENCE, THE IMPUGNED A DDITIONS KINDLY BE DELETED. 4.3 THE LD DR IS HEARD WHO HAS RELIED ON THE ORDER OF LOWER AUTHORITIES. 4.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADDITION OF RS. 2,000/-CONFIRMED BY THE LD, CIT(A) IS PURELY ON ADHOC BASIS HENCE THE SAME IS DELETED. 5. NOW WE WILL TAKE THE APPEAL FOR A.Y. 1998-99 TO 2001-02 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING SOLE GROUND WHICH IS CONSOLIDATED FOR THE ALL THE YEARS AND READ AS UNDER: THE LD. AO HAS ERRED IN MAKING ADDITION OF RS.27, 794/- IN AY 1998-99, RS.1,10,810/ IN A.Y. 1999-2000, RS.4,61,715/- IN A. Y. 2000-01 AND RS.3,18,872/-IN A.Y. 2001-02 ON ACCOUNT OF UNDISCL OSED INCOME IN THE SHAPE OF OUTSTANDING DEBTS AND CIT(A) HAS ERRED IN CONFIRMING THE SAME. 5.1 IN ALL THESE YEARS, THE AO HAS MADE ADDITIONS O N ACCOUNT OF THE OUTSTANDING DEBTORS SIMILAR TO ADDITION MADE ON ACC OUNT OF OUTSTANDING DEBTORS IN AY 2002-03 AS UNDER: S.NO. A.Y. ITA NO. UNDISCLOSED INCOME (RS) 1. 1998-99 677/JP/2011 RS.27,794/- 2. 1999-00 678/JP/2011 RS.1,10,810/- 3. 2000-01 679/JP/2011 RS.4,61,715/- 4. 2001-02 680/JP/2011 RS.3,18,872/- TOTAL (A) RS.9,19,191/- 5.2 THE LD AR SUBMITTED THAT THE ASSESSEE HAD ALREA DY SURRENDERED UNDISCLOSED INVESTMENT MADE IN THE STOCK, CASH, CON STRUCTION OF THE HOUSE AND DEBTORS TOTALLING TO RS.36,13,140/- (DETAILED AT PG 11 OF CIT(A) ORDER). SHRI ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 10 SURESH SONI S/O THE ASSESSEE IN HIS STATEMENT RECOR DED ON 10.08.2001 I.E. THE DAY OF SURVEY VIDE ANSWER TO Q. NO. 13 & 14 HAS CAT EGORICALLY STATED THAT THE INVESTMENT IN THE CONSTRUCTION OF THE HOUSE AND IN THE UNACCOUNTED STOCK OF GOLD AND SILVER, WAS OUT OF THE UNDISCLOSED INCOME OF PURCHASE AND SALES RELATING TO M/S ROSHAN LAL & SONS JEWELERS, BASED O N THESE LOOSE PAPERS. SHRI SURESH SONI ONCE AGAIN IN HIS STATEMENT RECORDED U/ S 131 ON DATED 21.08.2001 REPEATED THE SAME. IN ANSWER TO Q. NO. 2 HE STATED THAT ANN. 8, 9 & 12-17 ARE RELATED TO THE BUSINESS M/S ROSHAN LAL & SONS AND T HE ENTRIES MENTIONED THEREIN ARE THE OUTSTANDING RECOVERIES FROM UNRECOR DED SALES. THE UNDISCLOSED INVESTMENT IN THE HOUSE WAS THE UNDISCLOSED BUSINES S INCOME. WHATEVER UNDISCLOSED INCOME WAS GENERATED OUT OF THE UNRECOR DED SALES WAS CONVERTED INTO CASH AND STOCK. AT BOTH THE OCCASIONS, HE STAT ED THE FIGURE OF THE UNDISCLOSED STOCK OF RS.26.05 LACS AND INVESTMENT I N THE HOUSE AT RS.5 LACS AND THE OTHER UNEXPLAINED EXPENDITURE/ASSET ALSO. THUS, THE RECOVERIES FROM THE OUTSTANDING DEBTORS S TOOD INVESTED/CONVERTED INTO UNEXPLAINED INVESTMENT TOTALLING TO RS.36,13,1 40/- WHICH, ADMITTEDLY HAS ALREADY BEEN DISCLOSED BY THE ASSESSEE SEPARATELY A ND GOT TAXED IN A.Y.2002- 03. THIS FACTUAL POSITION HAS BEEN ADMITTED BY THE AO ALSO IN THE ASSESSMENT ORDER FOR A.Y.2002-03 WHEREIN AT PG 2, HE HAS REPRO DUCED THE COMPUTATION OF INCOME FILED BY THE ASSESSEE SHOWING THE SAID DISCL OSURE MADE. FURTHER, RS.30,13,140/- WAS SURRENDERED UNDER THE HEAD BUSI NESS INCOME WHEREAS RS.6 LACS WAS SURRENDERED AS INCOME FROM OTHER SOU RCES. 5.3 THE LD AR FURTHER SUBMITTED THAT THE FACT OF AV AILABILITY OF THE RECOVERIES MADE FROM THE DEBTORS IS ALSO EVIDENT FROM THE CONF IRMATIONS FROM THE VARIOUS DEBTORS, WHEREIN THEY (CUSTOMERS) HAVE STATED THAT THEY GOT THE ORNAMENTS MANUFACTURED FROM THE ASSESSEE, MENTIONING THE AMOU NT THEREOF AND THAT THE PAYMENT THEREOF HAS BEEN MADE WITHIN A MAXIMUM PERI OD OF TWO MONTHS FROM THE DATE OF SUCH PURCHASE/MAKING. FROM THIS, I T IS CLEAR THAT WITHIN THE MAXIMUM PERIOD OF TWO MONTHS, THE RECOVERIES OF OUT STANDING SALES WERE MADE. BASED ON THE DIFFERENT ANNEXURES SHOWING THE NAMES AND DATES OF THE DIFFERENT DEBTORS, THE ASSESSEE SUBMITTED VARIOUS C ONFIRMATIONS FILED VIDE LETTERS ALL DATED 22.09.2006 TO THE AO DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3)/147 OF THE ACT FOR A.Y.1999- 00 TO A.Y.2001-02 ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 11 .FOLLOWING ARE A FEW EXAMPLES IN WHICH CONFIRMATION S WERE FILED BY THE ASSESSEE: S.NO. DEBTORS NAME DIARY PAGE ANNEXURE PB PB 1. RAM KUMAR KHATRI P 6 PB 109 110 2. RAVI MISTRI P 2 PB 114 117 3. HANUMAN JI P 2 PB 114 119 4. HARIRAM P 8 PB 115 120 5. DR. KALYAN P 10 PB 115 118 6. RATANLAL P 6 PB 124 127 7. JAGDISH PRASAD P 6 PB 124 129 8. RAMESHWAR SAINI P 8 PB 124 128 EVEN ASSUMING, THE FACT OF RECOVERY IS NOT SHOWN ON THESE DOCUMENTS (IMPOUNDED ANNEXURE), YET HOWEVER, WHEN THE AO HAS ALREADY MADE THE ADDITIONS OF RS.9.91 LACS, HE WAS BOUND TO HAVE ALS O GIVEN THE BENEFIT OF TELESCOPING/SET OFF THERE AGAINST. THE AO HOWEVER, COMPLETELY FAILED TO REBUT THESE FA CTUAL CONTENTIONS AND TO BRING ANY CONTRARY EVIDENCE THERETO SUGGESTING THAT THE NO RECOVERY WAS MADE OR RECOVERIES SO MADE STOOD INVESTED/UTILIZED ELSEW HERE THAN IN THE UNDISCLOSED ASSETS SO SURRENDERED. THEREFORE, ONLY LOGICAL INFERENCE IS THAT ALL THE UNDISCLOSED INCOME WHICH HAS BEEN ADDED BY THE AO IN THE EARLIER YEARS, TOTALING TO RS.9,19,191/-, STOOD INVESTED IN VARIOU S ASSETS WHICH HAVE NOW BEEN SURRENDERED IN THE TOTAL AMOUNT OF RS.36,13,14 0/-. 5.4 THE LD AR FURTHER SUBMITTED THAT THE SUBMISSION S TO THIS EFFECT WERE MADE BEFORE THE LD. CIT(A) UNDER THE HEAD DOUBLE TA XATION AND HE HAS DISCUSSED THIS ASPECT AT PAGE 12 OF HIS ORDER BUT D ENIED THE BENEFITS SAYING THAT THERE IS NO DIRECT RELATIONSHIP BETWEEN THE DE BTORS DISCLOSED AT RS.4 LAC THIS YEAR AND THOSE ASSESSED IN EARLIER YEARS AND T HAT EACH YEAR IS A SEPARATE YEAR. THE LD. CIT(A) HOWEVER, COMPLETELY IGNORED TH E SETTLED PROPOSITION OF GIVING THE BENEFIT OF SET OFF OF THE TANGIBLE ADDIT ION MADE IN THE PAST, TOWARDS THE UNEXPLAINED ASSETS IN LATER YEARS. ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 12 5.5 THE LD AR FURTHER SUBMITTED THAT THE AO IN ALL THE YEARS WHILE MAKING ADDITION OF OUTSTANDING DEBTORS ALLEGED THAT THIS W AS ADMITTED BY APPELLANT IN HIS STATEMENT RECORDED ON 10.08.2001 (PB-22). HOWEV ER, WE MAY SUBMIT THAT THESE STATEMENTS WERE RECORDED DURING THE COURSE OF SURVEY AND THE POSSIBILITY OF THE EXISTENCE OF TENSED AND SURCHARGED ATMOSPHER E IN THE CASE OF SEARCH CANNOT BE RULED OUT. KINDLY REFER JAGDISH NARAIAN R ATAN KUMAR 22 TW 209(JP). THESE STATEMENTS THEREFORE, ARE NOT AT ALL RELIABLE IN VIEW OF THE ABOVE SUBMISSIONS AND FACTUAL LEGAL & POSITION. HENCE, NO ADDITION SHOULD HAVE BEEN MADE OR ALTERNATIVELY, THE OTHER PART OF THE STATEM ENTS (AS ABOVE) WHERE THE ASSESSEE HAS REPEATEDLY SUBMITTED THAT THE UNEXPLAI NED ASSETS ALREADY DISCLOSED AT RS.36,13,140/- CAME OUT OF THE RECOVER IES FROM THE OUTSTANDING DEBTORS AND THE INCOME THERE FROM, AS DETAILED IN O UR SUBMISSION DT. 11.03.2016 FOR OTHER YEARS, MUST HAVE BEEN ACCEPTED . 5.6 THE LD AR FURTHER SUBMITTED THAT THE ALLEGATION OF THE LD. CIT(A) THAT THERE IS NO DATE OF PAYMENT ON THE CONFIRMATIONS AN D HENCE, ARE NOT RELEVANT, IS CONTRARY TO THE FACTS AND RATHER WRONGLY IGNORED . MOREOVER, THE APPELLANT BEING A RETAILER, IT IS DIFFICULT TO BELIEVE THAT T HERE WILL BE NO RECOVERY AT ALL OF THE OUTSTANDING SALES FOR THE YEARS TOGETHER AND IS AGAINST THE HUMAN PROBABILITY. IN ANY CASE, IT IS A CASE OF FAIR ESTI MATION OF THE INCOME OF A GROUP OF FIVE YEARS THEREFORE, THE CONTENTION THAT EACH Y EAR IS A SEPARATE YEAR IS ALSO NOT RELEVANT AND IGNORING THE SETTLED LAW OF FAIR E STIMATION. 5.7 THE LD AR FURTHER SUBMITTED THAT A SIMILAR SITU ATION I.E. CLAIMING OF THE UNEXPLAINED EXPENDITURE OUT OF THE UNEXPLAINED INCO ME (ARISING OUT OF THE UNDISCLOSED SALES BASED ON THESE VERY PAPERS), AROS E IN A.Y.2002-03 WHERE THE AO AT PAGES 1 & 2 NOTED THAT THE ASSESSEE MADE SURR ENDER OF RS.1 LAC ON ACCOUNT OF EDUCATION EXPENSES OF HER DAUGHTER KUMAR I POOJA. THE AO REPRODUCING Q. ANS NO.4 ACCORDINGLY, MADE THE ADDIT ION OF RS.1 LAC U/S 69C. IN THE FIRST APPEAL, THE ASSESSEE CONTENTED THAT SUCH EXPENDITURE WAS MET OUT OF THE HUGE DISCLOSURE MADE BY THE ASSESSEE OF RS.36,1 3,140/- HENCE, THE ADDITION SHOULD NOT BE SUSTAINED BECAUSE OTHERWISE IT AMOUNT TO DOUBLE TAXATION. INTERESTINGLY, THE LD. CIT(A) VIDE PARA 4 .3 PAGE 2 DELETED THE ADDITION OBSERVING THAT IT IS FOUND THAT TOTAL WITHDRAWAL M ADE BY THE ASSESSEE RS.1,48,500/- DURING THE YEAR. BESIDES THIS THE ASS ESSEE HAD ALSO MADE ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 13 DISCLOSURE OF ADDITIONAL OF RS.36,13,140/-. THEREFO RE, THE ADDITION IS NO JUSTIFIED. HOWEVER, THERE BEING SIMILAR LEGAL & FA CTUAL SITUATION IN THIS GROUND, THE LD. CIT(A) HAS CONTRADICTED HIS OWN FIN DING. 5.8 THE LD. AR FURTHER PLACED RELIANCE ON DECISION S IN CASE OF CIT VS. TYARYAMAL BAL CHAND (1987) 165 ITR 0453 (JP) AND EAGLE SEEDS & BIOTECH LTD. VS. ACIT (2006) 102 TTJ 1065 5.9 THE LD DR IS HEARD WHO HAS RELIED UPON THE ORDE R OF LOWER AUTHORITIES. 5.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT SHRI SURESH SONI SON O F THE ASSESSEE IN HIS STATEMENT RECORDED ON 10.08.2001 I.E. THE DAY OF SURVEY VIDE ANSWER TO Q. NO. 13 & 14 HAS STATED THAT THE INVESTMENT IN THE CONSTRUCTION OF THE HOUSE AND IN THE UNACCOUNTED STOCK OF GOLD AND SILVER, WAS OUT OF TH E UNDISCLOSED INCOME OF PURCHASE AND SALES RELATING TO M/S ROSHAN LAL & SON S JEWELLERS, BASED ON THESE LOOSE PAPERS. SHRI SURESH SONI IN HIS OWN STATEMENT RECORDED U/S 131 ON DATED 21.08.2001 CONFIRMS HIS SON STATEMENT AND IN ANSWER TO Q. NO. 2, HE STATED THAT ANN. 8, 9 & 12-17 ARE RELATED TO THE BUSINESS M/S ROSHAN LAL & SONS AND THE ENTRIES MENTIONED THEREIN ARE THE OUTSTANDING R ECOVERIES FROM UNRECORDED SALES. THE UNDISCLOSED INVESTMENT IN THE HOUSE WAS THE UNDISCLOSED BUSINESS INCOME. WHATEVER UNDISCLOSED INCOME WAS GENERATED O UT OF THE UNRECORDED SALES WAS CONVERTED INTO CASH AND STOCK. AT BOTH TH E OCCASIONS, HE STATED THE FIGURE OF THE UNDISCLOSED STOCK OF RS.26.05 LACS AN D INVESTMENT IN THE HOUSE AT RS.5 LACS AND THE OTHER UNEXPLAINED EXPENDITURE/ASS ET ALSO. THUS, THE RECOVERIES FROM THE OUTSTANDING DEBTORS STOOD INVES TED/CONVERTED INTO UNEXPLAINED INVESTMENT TOTALLING TO RS.36,13,140/- WHICH, ADMITTEDLY HAS ALREADY BEEN DISCLOSED BY THE ASSESSEE SEPARATELY A ND GOT TAXED IN A.Y.2002- 03. FURTHER, IT IS NOTED THAT THE FACT OF AVAILABI LITY OF THE RECOVERIES MADE FROM THE DEBTORS IS ALSO EVIDENT FROM THE CONFIRMATIONS FROM THE VARIOUS DEBTORS, WHEREIN THEY HAVE STATED THAT THEY GOT THE ORNAMENT S MANUFACTURED FROM THE ASSESSEE, MENTIONING THE AMOUNT THEREOF AND THAT TH E PAYMENT THEREOF HAS BEEN MADE WITHIN A MAXIMUM PERIOD OF TWO MONTHS FRO M THE DATE OF SUCH PURCHASE/MAKING. THE LD AR FURTHER SUBMITTED THAT T HE AO IN ALL THE YEARS ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 14 WHILE MAKING ADDITION OF OUTSTANDING DEBTORS ALLEGE D THAT THIS WAS ADMITTED BY APPELLANT IN HIS STATEMENT RECORDED ON 10.08.200 1. AT THE SAME TIME, THE OTHER PART OF THE STATEMENTS WHERE THE ASSESSEE HAS REPEATEDLY SUBMITTED THAT THE UNEXPLAINED ASSETS ALREADY DISCLOSED AT RS .36,13,140/- CAME OUT OF THE RECOVERIES FROM THE OUTSTANDING DEBTORS AND THE INCOME THERE FROM, AS DETAILED IN OUR SUBMISSION DT. 11.03.2016 FOR OTHER YEARS, MUST HAVE BEEN ACCEPTED AS WELL. 5.11 THE HONBLE SUPREME COURT IN CASE OF ANANTHARA M VEERASINGHAIAH (SUPRA) HAS HELD AS UNDER: NOW IT CAN HARDLY BE DENIED THAT WHEN AN 'INTANGIB LE' ADDITION IS MADE TO THE BOOK PROFITS DURING AN ASSESSMENT PROCEEDING, IT IS ON THE BASIS THAT THE AMOUNT REPRESENTED BY THAT ADDITION CONSTITUTES THE UNDISCLOSED INCOME OF THE ASSESSEE. THAT INCOME, ALTHOUGH COMMONLY DESCRIBED AS 'INTANGIBLE', IS AS MUCH A PART OF HIS REAL INCOME AS THAT DISCLOSED BY HIS ACCOUNT BOOKS. IT HAS THE SAME CONCRETE EXISTENCE. IT COULD BE AVAILABLE TO THE AS SESSEE AS THE BOOK PROFITS COULD BE. THERE CAN BE NO ESCAPE FROM THE PROPOSITION THAT TH E SECRET PROFITS OR UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARL IER ASSESSMENT YEAR MAY CONSTITUTE A FUND, EVEN THOUGH CONCEALED, FROM WHIC H THE ASSESSEE MAY DRAW SUBSEQUENTLY FOR MEETING EXPENDITURE OR INTRODUCING AMOUNTS IN HIS ACCOUNT BOOKS. BUT IT IS QUITE ANOTHER THING TO SAY THAT AN Y PART OF THAT FUND MUST NECESSARILY BE REGARDED AS THE SOURCE OF UNEXPLAINE D EXPENDITURE INCURRED OR OF CASH CREDITS RECORDED DURING A SUBSEQUENT ASSESSMEN T YEAR. THE MERE AVAILABILITY OF SUCH A FUND CANNOT, IN ALL CASES, I MPLY THAT THE ASSESSEE HAS NOT EARNED FURTHER SECRET PROFITS DURING THE RELEVANT A SSESSMENT YEAR. NEITHER LAW NOR HUMAN EXPERIENCE GUARANTEES THAT AN ASSESSEE WH O HAS BEEN DISHONEST IN ONE ASSESSMENT YEAR IS BOUND TO BE HONEST IN A SUBS EQUENT ASSESSMENT YEAR. IT IS A MATTER FOR CONSIDERATION BY THE TAXING AUTHORI TY IN EACH CASE WHETHER THE UNEXPLAINED CASH DEFICITS AND THE CASH CREDITS CAN BE REASONABLY ATTRIBUTED TO A PRE-EXISTING FUND OF CONCEALED PROFITS OR THEY ARE REASONABLY EXPLAINED BY REFERENCE TO CONCEALED INCOME EARNED IN THAT VERY Y EAR. IN EACH CASE, THE TRUE NATURE OF THE CASH DEFICIT AND THE CASH CREDIT MUST BE ASCERTAINED FROM AN OVERALL CONSIDERATION OF THE PARTICULAR FACTS AND C IRCUMSTANCES OF THE CASE. ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 15 EVIDENCE MAY EXIST TO SHOW THAT RELIANCE CANNOT BE PLACED COMPLETELY ON THE AVAILABILITY OF A PREVIOUSLY EARNED UNDISCLOSED INC OME. A NUMBER OF CIRCUMSTANCES OF VITAL SIGNIFICANCE MAY POINT TO TH E CONCLUSION THAT THE CASH DEFICIT OR CASH CREDIT CANNOT REASONABLY BE RELATED TO THE AMOUNT COVERED BY THE INTANGIBLE ADDITION BUT MUST BE REGARDED AS POI NTING TO THE RECEIPT OF UNDISCLOSED INCOME EARNED DURING THE ASSESSMENT YEA R UNDER CONSIDERATION. IT IS OPEN IN TO THE REVENUE TO RELY ON ALL THE CIRCUM STANCES POINTING TO THAT CONCLUSION. 5.12 THE HONBLE RAJASTHAN HIGH IN CASE OF TYARYAMA L BAL CHAND (SUPRA) HAS HELD AS UNDER: IT IS CLEAR FROM THE LAW DISCUSSED ABOVE, THAT THE ITO WAS WITHIN HIS RIGHT TO TAX THE AMOUNT OF RS. 16,950 AS INCOME FROM UNDISCL OSED SOURCES. EVEN THOUGH HE HAD ADDED THE AMOUNT OF RS. 18,117 IN ADDITION T O THE PROFIT SHOWN BY THE RESPONDENT-FIRM IN THEIR ACCOUNT BOOKS. HOWEVER, IN THE PRESENT CASE, THE RESPONDENT WAS WELL WITHIN HIS RIGHTS TO PLEAD THAT THIS AMOUNT OF RS. 16,950 IS COVERED FROM THE INTANGIBLE INCOME ASSESSED AT RS. 18,117 AND ADDED IN THE INCOME OF THE FIRM AND APART FROM THIS, SINCE FOR T HE LAST PRECEDING 3 YEARS, SUBSTANTIAL ADDITIONS AMOUNTING TO RS. 32,797 HAVE BEEN ADDED, THE AMOUNT OF RS. 16,950 COULD BE TAKEN AS HAVING COME OUT OF SUC H INTANGIBLE ADDITIONS. IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO. (SUPRA) , THEIR LORDSHIPS OF THE SUPREME COURT HAVE HELD THAT THE ADDITIONS MADE TO THE BOOK PROFITS IN EARLIER YEARS ARE THE REAL INCOME AND CAN BE TREATED AS AVA ILABLE FOR USE IN SUBSEQUENT YEARS OR EVEN IN THE SAME YEAR. 5.13 IN THE INSTANT CASE, THE SURRENDER OF RS 36,13 ,140 DURING AY 2002-2003 RELATES TO STOCK ACCUMULATED OUT OF INCOME EARNED F ROM SALE/PURCHASE OF GOLD AND JOB WORK CHARGES OF RS 26,50,000, CASH FOUND DU RING SURVEY OF RS 63,140, INVESTMENT IN HOUSE OF RS 5,00,000, TRADE DEBTORS O UTSTANDING OF RS 3,00,000 AND LOAN AND INTEREST OF RS 1,00,000. IN THE STATE MENT OF SHRI SURESH SONI, SON OF THE ASSESSEE AND WHICH IS SUBSEQUENTLY CONFIRMED BY THE ASSESSEE IN HIS OWN STATEMENT, IT HAS BEEN MENTIONED THAT INVESTMEN TS MADE IN STOCK, CASH FOUND DURING SURVEY, ETC ARE OUT OF THE SAME BUSINE SS RECEIPTS AND TRADE DEBTORS. NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE IN TERMS OF ANY TANGIBLE EVIDENCE TO PROVE OTHERWISE. THE SURRENDE R OF RS 36,13,140 AND ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 16 ADDITIONS OF TRADE DEBTORS OVER ALL THESE YEARS AMO UNTING TO RS 9,19,191 HAVE THEIR ORIGIN IN TERMS OF STATEMENTS RECORDED OF SHR I SURESH SONI, THE ASSESSEE AS WELL AS SAME SET OF DOCUMENTS IN TERMS OF KATURI A NOTE BOOK AND LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY WHICH HAVE TO BE READ AND CONSIDERED IN ENTIRETY AND WHICH PROVE THAT THE QUA LITY OF TRADE DEBTORS IN ALL THESE YEARS AND SURRENDER OF STOCK AND CASH AND EVE N INVESTMENT IN HOUSE IS NOT DIFFERENT. IN THE ENTIRETY OF FACTS AND CIRCU MSTANCES OF THE CASE, WHERE THE REALISATION FROM SALES FOR THE YEAR AND PREVIOUS YE ARS HAVE BEEN INVESTED IN THE STOCK OF GOLD AND HOUSE PROPERTY AND WHICH HAVE ALREADY BEEN BROUGHT TO TAX AS SURRENDERED INCOME, THE SAME TRADE DEBTORS C ANNOT BE BROUGHT TO TAX AGAIN IN THE HANDS OF THE ASSESSEE. IN LIGHT OF TH AT AND RESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE SUPREME COURT IN CASE OF A NANTHARAM VEERASINGHAIAH (SUPRA) AND HONBLE RAJASTHAN HIGH COURT IN CASE OF TYARYAMAL BAL CHAND (SUPRA), WE DELETE THE ADDITIONS MADE BY THE AO IN ALL THESE YEARS TOTALLING TO RS 9,19,191. HENCE, GROUND TAKEN BY THE ASSESSEE I S ALLOWED IN ALL THE YEARS UNDER CONSIDERATION. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/0 8/2016. SD/- SD/- ( R.P TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 04/ 08/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ROSHANLAL SONI, KOTPUTILI (JAIP UR) 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-2, ALWAR 3. VK;DJ VK;QDR@ CIT ALWAR ITA NO. 640/JP/11 & ITA NOS. 677 TO 680/JP/11 SHRI ROSHANLAL SONI, KOTPUTLI VS. DCIT CIRCLE-2, A LWAR 17 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-ALWAR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.640/JP/2011 & ITA NOS. 677 TO 68 0/JP/11) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR