RAJESH GOYAL, Jaipur V. ACIT, Jaipur

ITA 690/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5334 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL JCIT DR DHK
• Keywords: Unexplained investment; Notional interest; Retraction

Judgement Text

ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, 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 YADA V, AM VK;DJ VIHY LA-@ ITA NO. 690/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI RAJESH GOYAL B-20, KRISHNAPURI OLD RAMGARH MODE, JAIPUR CUKE VS. THE ACIT CIRCLE- 5 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABUPG 0195 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SMT. RUNI PAL, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/04/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /05/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)- II, JAIPUR DATED 18-07-2014 FOR THE ASSESSMENT YEAR 2008-09 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE 1. RS. 1,90,000/- AS UNEXPLAINED INVESTMENT IN MO NEY LANDING BUSINESS BEING ALONG WITH THE WIFE SMT. PRATIBHA GOYAL. 2. RS. 84,390/- BEING NOTIONAL INTEREST FROM MONEY LENDING BUSINESS BEING ALONG WITH THE WIFE SMT. PRATIBHA GOYAL. ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 2 3. RS. 6,50,000/- AS UNEXPLAINED CASH THOUGH IN THE SURVEY STATEMENT THAT BOOKS OF ACCOUNTS OF DIFFERENT ENTITIES WERE NOT CO MPLETE AS ON THE DATE OF SURVEY AND RECONCILIATION WAS SUBMITTED LATER WHICH HAS BEEN ARBITRARILY REJECTED. 2.1 BRIEF FACTS ARE THAT SURVEY PROCEEDINGS WERE CA RRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 25-7-2007, CON SEQUENT THERETO ASSESSEE SURRENDERED TOTAL JOINT INVESTMENT OF RS. 80,80,000 /- IN MONEY LENDING BUSINESS CARRIED OUT ALONG WITH HIS WIFE SMT. PRATI BHA GOYAL. ACCORDINGLY RS. 40,40,000/- IN EACH HAND WAS OFFERED AS UNDISCL OSED INVESTMENT. SUBSEQUENTLY THE RECONCILIATION OF INVESTMENT WAS C ARRIED OUT AND A PEAK INVESTMENT OF RS. 38,50,000/- IN EACH CASE WAS OFFE RED IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT LD. AO HOWE VER ADOPTED RS. 40,40,000/- AS UNDISCLOSED INCOME IN EACH HAND RESU LTING IN RESPECTIVE ADDITION OF RS. 1,90,000/- IN EACH HAND. IN ADDITIO N LD. AO ALSO ADDED NOTIONAL INTEREST INCOME OF RS. RS. 84,390/- IN EAC H HAND. 2.2 BOTH THESE ISSUES CAME FOR HEARING IN THE CASE OF ASSESSEES WIFE SMT. PRATIBHA GOYAL BEFORE ITAT, VIDE ORDER DTD. 9-10-20 15 IN ITAT NO. 453/JP/2013; THESE TWO ADDITIONS HAVE BEEN DELETED BY FOLLOWING OBSERVATIONS:- 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. A PERUSAL OF PAPER B OOK PAGE 5 BEING ONE OF THE INCRIMINATING DOCUMENT CLEARLY INDICATE THAT SAID AMOUNT OF ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 3 RS. 1.90 LACS WAS ADVANCED FOR TWO MONTHS. IN VIEW THEREOF, A CLEAR PRESUMPTION MATERIALIZES IN FAVOR OF THE ASSESSEE T HAT SAID AMOUNT ADVANCED FOR TWO MONTHS WAS AVAILABLE FOR CIRCULATI ON IN AY 2008- 09. THUS THE FINDING OF THE LOWER AUTHORITIES THAT THE ASSESSEE FAILED TO PROVIDE ANY EVIDENCE IS ERRONEOUS INASMUCH AS THE I NCRIMINATING DOCUMENT ITSELF IS EVIDENCE TO THIS EFFECT, MORE SO IS RELIED ON BY THE LOWER AUTHORITIES WITHOUT ANY QUESTION. IT IS A TRI TE LAW THAT EVIDENCE CANNOT BE PARTLY RELIED ON AND PARTLY IGNORED. IN V IEW THEREOF, WE HOLD THAT THE AMOUNT OF RS. 1.90 LACS WAS AVAILABLE TO T HE ASSESSEE FOR AY 2008-09 AND WAS AVAILABLE FOR TELESCOPING IN AY 200 8-09. THUS THE ADDITION OF RS. 1,90,000/- CONFIRMED BY THE LD. CIT (A) IS DELETED. 2.8 COMING TO THE ISSUE OF NOTIONAL INTEREST, IT IS OBSERVED THAT NOTHING HAS BEEN BROUGHT ON RECORD TO SUGGEST ACCRUAL OF INTEREST INCOME OF RS. 84,390/- TO THE ASSESSEE. THE INCOME CANNOT BE HELD TO ACCRUE ON PRESUMPTIONS AND HYPOTHETICATIONS. IN VIE W THEREOF, WE DELETE THE NOTIONAL ADDITION OF RS. 84,390/- 2.3 APROPOS THE REMAINING ADDITION OF RS. 6,50,000/ - AS ALLEGED EXCESS CASH, LD. AO ASKED FOR RECONCILIATION OF CASH DIFFE RENCE OF RS. 6.50 LACS FOUND DURING THE COURSE OF SURVEY. ASSESSEE AT THE TIME OF SURVEY AND DURING ASSESSMENT PROCEEDINGS CONTENDED THAT THE TOTAL CAS H FOUND AT THE TIME OF SURVEY BELONGED TO ALL THE ASSOCIATED FAMILY CONCER NS, WHOSE BOOKS OF ACCOUNT WERE COMPUTERIZED BUT WERE NOT UP TO DATE A S ACCOUNTANT HAD NOT COME, THEREFORE, THE ASSESSEE WAS NOT IN A POSITION TO OFFER RECONCILIATION ON THE SPOT. SUBSEQUENTLY, THE BOOKS OF ACCOUNT HAVE B EEN UPDATED AND THE TOTAL CASH OF ALL CONCERNS INCLUDING PART REMAINING AT RE SIDENCE WAS RECONCILED AND UPDATED IN THE BOOKS. AS THE PROCEEDINGS WERE O F SURVEY, RESIDENTIAL PREMISES WERE NOT COVERED UNDER SURVEY. NO ADVERSE COMMENTS ON THE ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 4 ENTRIES OR CASH BALANCE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN MADE. THEREFORE, THERE IS NO REASON TO HOLD THAT CA SH WAS NOT RECONCILED SO AS TO MAKE IMPUGNED ADDITION. THE AO HOWEVER, DID N OT CONTROVERT THE EXPLANATION AND TREATED IT AS RETRACTION OF STATEME NT BY THE ASSESSEE AND MADE ADDITION IN SUMMARY MANNER BY FOLLOWING OBSERV ATION. THE REPLY OF THE ASSESSEE FOR RETRACTION MADE CAN NOT BE ACCEPTED AS DURING THE COURSE OF SURVEY STATEMENT O F THE ASSESSEE WAS RECORDED WHEREIN HE HAS CATEGORICALLY ACCEPTED THE EXCESS CASH FOUND REPRESENTS HIS UNDISCLOSED IN COME AND HAS SURRENDERED THE SAME WHICH IS CLEAR FROM THE ST ATEMENTS REPRODUCED AS ABOVE. 2.4 IN FIRST APPEAL, THE LD. CIT(A) ALSO CONFIRMED THE ADDITION. 2.5 AGGRIEVED THE ASSESSEE IS BEFORE US. THE LD. CO UNSEL FOR THE ASSESSEE CONTENDS THAT GROUND NO. 1 & 2 ARE SQUARELY COVERED BY THE ITAT JUDGMENT IN THE CASE OF THE ASSESSEES WIFE, FACTS BEING SAM E THE GROUNDS MAY BE ALLOWED. 2.6 APROPOS GROUND NO. 3 IT IS CONTENDED THAT DURIN G THE COURSE OF SURVEY, RELEVANT QUESTION ABOUT ALLEGED SPOT CASH WERE ANSW ERED IN QUESTION NO. 2 AND 3 OF THE STATEMENTS. THE ASSESSEE HAS CLEARLY M ENTIONED THAT THE CASH FOUND PERTAINS TO THE ALL FAMILY CONCERNS, SINCE TH E ACCOUNTANT HAS NOT COME TODAY AND THE ACCOUNTS ARE NOT UPDATE, ON THE SPOT RECONCILIATION CANNOT BE GIVEN. PROPER RECONCILIATION WILL BE GIVEN AFTER UP DATING ALL THE DOCUMENTS ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 5 AND UPDATING THE CASH BALANCE. IT IS SUBMITTED THAT THE ASSESSEE HAS NOT RETRACTED ANY STATEMENT AND RATHER CLEARLY EMPHASIZ ED IN THE STATEMENT THAT THE CASH WILL BE DULY RECONCILED AND EXPLAINED AFTE R UPDATING OF ACCOUNTS. THE BOOKS OF ACCOUNT HAVE BEEN ACCEPTED BY LD. AO A ND LD. CIT(A), THEY ARE NEITHER REJECTED NOR ANY DEFECTS THEREIN HAVE BEEN FOUND. 2.7 ON THE BASIS OF THE DOCUMENTARY EVIDENCE, CASH BOOK AND LEDGER, THE ASSESSEE HAS DEMONSTRATED THAT THERE WAS NO EXCESS CASH AS ALLEGED AND THE SAME STANDS DULY EXPLAINED BY BOOKS OF ACCOUNTS. LD . AO HAS MADE IMPUGNED ADDITION NOT ON MERITS BUT BY SUMMARILY HO LDING THAT THE ASSESSEE HAS RETRACTED FROM HIS STATEMENT. THE LD. AR FURTHE R CONTENDS THAT FROM ABOVE FACTS IT IS AMPLY CLEAR THAT NO RETRACTION OF STATEMENT VIS A VIS CASH WAS MADE. A PROPER RECONCILIATION AS UNDERTAKEN IN THE STATEMENT AT THE TIME OF SURVEY WAS COMPLIED WITH AND BOOKS OF ACCOUNT WERE ACCORDINGLY UPDATED, NO FAULT HAS BEEN FOUND THEREIN. THEREFORE, THE ADD ITION HAS BEEN CONFIRMED WITHOUT CONTROVERTING THE DOCUMENTARY EVIDENCE FURN ISHED BY THE ASSESSEE AND MERELY HOLDING THAT STATEMENT HAS BEEN RETRACTE D, WHICH IS AN ERRONEOUS FINDING NOT BORNE OUT FROM THE RECORD. IT IS SETTLE D LAW THAT STATEMENTS SHOULD BE READ IN ITS ENTIRETY AND NOT ON PIECE MEAL BASIS . BESIDES A SURVEY STATEMENT IS NOT A BINDING PIECE OF EVIDENCE AND CA NNOT OVERRIDE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. SINC E THE ASSESSEE BY ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 6 REQUISITE DOCUMENTARY EVIDENCE HAS DEMONSTRATED THA T THERE WAS NO EXCESS CASH, THEREFORE, THE ADDITION IS UNJUSTIFIED. 2.8 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE HAVE VERIFIED THE CONTENTS OF THE IMPUGNED QUESTIONS AND ANSWERS OF THE STATEMENT; WHILE ANSWE RING QUESTION NOS. 2, 3 AND 18. THE ASSESSEE CATEGORICALLY STATED THAT THE BOOKS OF ACCOUNT ARE NOT UPDATED DUE TO ABSENCE OF ACCOUNTANT, THE CASH FOUN D PERTAINED TO OTHER FAMILY CONCERNS ALSO. THE BOOKS OF ACCOUNT ARE MAIN TAINED ON COMPUTER AND THEY ARE NOT UPDATED. THE CORRECT POSITION OF THE C ASH CAN BE GIVEN ONLY AFTER COMPLETION OF ACCOUNTS. THE HARMONIOUS READING OF T HESE QUESTIONS AND ANSWERS INDICATE THAT THE ASSESSEE DID NOT ACCEPT A NY EXCESS CASH AND MADE IT SUBJECT TO VERIFICATION AFTER COMPLETION OF ACCOUNT S. THE ASSESSEE'S BOOKS OF ACCOUNT HAVE NEITHER BEEN REJECTED NOR HAVE ANY ADV ERSE COMMENTS BEEN MADE ON THE EXPLANATION OF THE ASSESSEE. THE EXPLAN ATION HAS BEEN REJECTED IN A SUMMARY MANNER BY WRONGLY HOLDING THAT THE ASS ESSEE HAS MADE RETRACTION FROM THE ADMISSION WHICH IS NOT A CORREC T OBSERVATION. IN VIEW OF THE FOREGOING, WE SEE NO JUSTIFICATION IN THE IMPUG NED ADDITION AS TO THE CASE OF THE ASSESSEE WHICH IS DELETED. GROUND NO 3 OF TH E ASSESSEE IS ALLOWED. 2.9 RESPECTFULLY FOLLOWING THE DECISION OF ITAT ON THESE ISSUES IN THE CASE OF ASSESSEE'S WIFE SMT. PRATIBHA GOYAL IN ITA NO. 453/JP/2013 DATED ITA NO. 690/JP/2014 SHRI RAJESH GOYAL VS. ACIT, CIR CLE- 5,JAIPUR 7 9-10-2015 FOR THE ASSESSMENT YEAR 2008-09, THE GROU ND NOS. 1 AND 2 OF THE ASSESSEE ARE ALLOWED. 3.0. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/05/201 6. SD/- SD/- AAFOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 /05/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJESH GOYAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 5, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.690/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR