The ACIT, Circle-7, Surat V. Shri Satish Dayalal Shah, Surat

ITA 659/AHD/2010

• Counselvise Citation: 65920514 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV SRDR
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.659/AHD/2010 ASSESSMENT YEAR:2006-07 ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-7, SURAT V/S . SHRI SATISH DAYALAL SHAH, PROP. OF MAMTA IMPEX, A/98, SMRUTI SOCIETY, KATARGAM, FULPADA ROAD, SURAT PAN NO.AUHPS1877Q (APPELLANT) .. (RESPONDENT) /BY APPELLANT SHRI B.L. YADAV, SR-DR /BY RESPONDENT NONE /DATE OF HEARING 15-05-2012 /DATE OF PRONOUNCEMENT 18-05-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-V, SURAT DATED 06-11-2009 FOR THE ASSESSMENT YEAR 2006-07. THE NOTICE OF HEARING WAS ISSUED TO THE RESPONDENT/ASSESSEE THROUGH DEPARTMENTAL REPRESENTA TIVE ON 10-05-2012. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE AN D THE APPEAL IS TAKEN ITA NO.659/AHD/2010 A.Y. 2006-07 ACIT, CIR-7, SRT V. SH SATISH D SHAH PAGE 2 UP FOR HEARING IN THE ABSENCE OF ASSESSEE. THE REVE NUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DIRECTING TO TAX ONLY AN AMOUNT OF RS.50,000/- @ 2% ON THE UNACCOUNTED BUSINESS OF RS.25,00,000/-. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE SELF MADE W RITTEN STATEMENT OF THE ASSESSEE THAT HE HAS RECEIVED UNACCOUNTED BUSIN ESS INCOME OF RS.25,00,000/-. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE PAID A ADVANCE TAX OF RS.3 LAKHS AFTER FILING THE DISCLOSU RE LETTER WHICH LENDS CREDIBILITY TO THE ADDITIONAL DECLARED INCOME BEING RS.25 LAKHS. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/ S. 133A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WA S CARRIED OUT ON 17-03-2006 AT BUSINESS PREMISES OF THE ASSESSEE. THE STATEMENT OF THE ASSESSEE WAS RECORDED ON 20-03-2006. THE ASSESSEE IS ENGAGED IN DIAMOND TRADING COMMISSION AND ESTATE BROKER. THE ASSESSEE SUBMITTE D A LETTER DATED 31-03- 2006 BEFORE THE ASSESSING OFFICER. THE AO TREATING THE SAME AS VOLUNTARY ADMISSION TO RS.25 LAKH AS TAXABLE INCOME AND SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE FEELING AGGRIE VED BY THIS ORDER OF AO APPROACHED BEFORE LD. CIT(A) BY WAY OF APPEAL. 3. BEFORE LD. CIT(A) LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD NEVER MADE VOLUNTAR Y DISCLOSED OF RS.25 LAKH AS UNDISCLOSED INCOME. IT WAS SUBMITTED THAT T HE ASSESSEE HAD DISCLOSED RS.25 LAKHI AS UNDISCLOSED BUSINESS TURNOVER AND IN COME REPRESENTING COMMISSION @ 1% ON TOTAL UNDISCLOSED TURNOVER. THE AR SUBMITTED BEFORE LD. CIT(A) THAT AO HOWEVER TREATED TOTAL UNDISCLOSED TU RNOVER OF RS.25 LAKH AS ASSESSEES INCOME AND AFTER ADJUSTING DISCLOSED IN COME OF RS.25,000/- AND ITA NO.659/AHD/2010 A.Y. 2006-07 ACIT, CIR-7, SRT V. SH SATISH D SHAH PAGE 3 RS.24.75 LAKH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) CONSIDERING THE SUBMISSION MADE BY LD. AR OF THE AS SESSEE RESTRICTED ADDITION TO THE EXTENT OF 2% OF THE UNDISCLOSED TUR NOVER OF RS.25 LAKH AND THUS, PARTLY ALLOWED THE APPEAL. 4. LD. DR VEHEMENTLY ARGUED THAT LD. CIT(A) HAS ERR ONEOUSLY RESTRICTED THE ADDITION TO THE TUNE OF RS.50,000/- DESPITE THE FACT THAT ASSESSEE HAD HIMSELF ADMITTED THE UNDISCLOSED INCOME. 5. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIAL A VAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS DISCUSSED THIS ISSUE IN PARA-5 OF HIS ORDER, SAME IS REPRODUCED HEREINBELOW FOR THE SAKE OF CLARITY:- 5. I HAVE GONE THROUGH THE VIEWS OF THE ASSESSING OFFICER AS WELL AS THE SUBMISSIONS MADE BY THE A.R. ON GOING THROUGH THE I MPUGNED LETTER ADDRESSED TO THE ASSESSING OFFICE, IT IS CLEAR THAT THE ASSESSEE HAS MENTIONED BUSINESS TURNOVER OF S.25,00,000/- WHICH WAS NOT DISCLOSED TO THE DEPARTMENT. THEREFORE, RS.25,00,000/- REPRES ENTS UNDISCLOSED TURNOVER AND NOT UNDISCLOSED INCOME FOR THE YEAR. T HIS ADMISSION IS CONSEQUENT TO A SURVEY UNDER SECTION 133A IN ASSESS EES PREMISES ON17.03.2006. THERE IS NO AMBIGUITY AS TO THE FACT THAT THE ASSESSEE HAS CONFESSED IN WRITING ABOUT THE UNDISCLOSED TURN OVER OF BUSINESS AT RS.25 LAKHS. HE HAS ALSO MENTIONED THAT THE TAX ON SUCH AMOUNT WILL BE PAID IN TIME. IN THESE CIRCUMSTANCES EQUATING UN DISCLOSED TURNOVER WITH UNDISCLOSED INCOME IS NOT CORRECT. THE ASSESSE E HAS DECLARED 1% OF COMMISSION ON SUCH UNDISCLOSED TURNOVER. IN DIAM OND TRADING, THE COMMISSION IS LOW CONSIDERING THE LARGE TURNOVER. I T GENERALLY VARIES FROM 21% TO 2%. IN THIS CASE, SINCE THE ASSESSEE HA S NOT DISCLOSED THE TRANSACTION, THERE IS NO WAY TO ASCERTAIN THE EXACT COMMISSION RECEIVED. THEREFORE, THE COMMISSION INCOME IS ESTIMATED AT 2% I.E. RS.50,000/-. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTED THE ASSESSABLE INCOME CONSIDERING COMMISSION OF RS.50,000/- FROM THE UNDI SCLOSED TURNOVER OF RS.25,00,000/-. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT AS SESSEE IS ENGAGED IN THE BUSINESS OF DIAMOND TRADING COMMISSION AND ESTATE B ROKING. WE FIND NO INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A). IN V IEW OF THE FACT THAT REVENUE ITA NO.659/AHD/2010 A.Y. 2006-07 ACIT, CIR-7, SRT V. SH SATISH D SHAH PAGE 4 HAS NOT PLACED ANYTHING CONTRARY TO THE FINDING OF THE LD. CIT(A) THAT THE AMOUNT DISCLOSED DURING THE COURSE OF SURVEY WAS OT HER THAN THE BUSINESS TURNOVER AS TREATED BY LD. CIT(A). IN VIEW OF THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 6. I N THE RESULT, APPEAL FILED BY THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 18/05/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. *.3 , ,4 / CONCERNED CIT 4. , ,4- / CIT (A) 5. /67 ...3, , .3 , ()* / DR, ITAT, AHMEDABAD 6. 7:; <= / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ >/ ( ? , .3 , ()* + STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 15/5, 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO. 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 16/5, 4) DATE OF CORRECTION 16/5 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 16/05 7) ORDER UPLOADED ON 18/05 8) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 18/05