DCIT, Chandigarh V. Shri Krishan Kumar Goyal, Chandigarh

ITA 718/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6151 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-05-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: ASHOK KUMAR GOEL
• Keywords: Unexplained expenditure
• Section: 69C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 718/CHD/2013 ASSESSMENT YEAR: 2010-11 THE D.C.I.T VS. SHRI. KRISHAN KUMAR GOYAL CC-II, # SCO 98-99, SUB CITY CENTRE CHANDIGARH SECTOR 34, CHANDIGARH PAN NO. AATPG9785F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI ASHOK KUMAR GOEL DATE OF HEARING : 22/05/2014 DATE OF PRONOUNCEMENT : 09/06/2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 18.3.2013 OF CIT (APPEALS), (CENTRAL), GURGAON. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS B Y DELETING THE ADDITION OF RS. 44,86,364/- MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C OF THE I.T. ACT, 19 61 BASED ON THE DOCUMENT MARKED AS A-4 (PAGES 119-125) FOUND AND SEIZED FROM THE OFFICE OF M/S. MODERN STEELS LTD., CHANDIGARH. 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY OBSERVING THAT THE UNEXPLAINED EXPENDITURE OF RS. 44,86,364/- WAS COVERED IN THE SURRENDER MADE BY TH E ASSESSEE U/S 132(4) OF THE I.T. ACT, 1961. 3. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT T HAT THE ASSESSEE HAD NOT MADE ANY SURRENDER ON THE BASIS OF THE 2 DOCUMENT A-4 (PAGES 119-125) FOUND AND SEIZED FROM THE OFFICE OF M/S MODERN STEELS LTD. CHANDIGARH. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT SEAR CH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 17.3.2010. DURING SEAR CH VARIOUS INCRIMINATING DOCUMENTS WERE FOUND. THE DOCUMENT A-4 WAS ALSO FOU ND CONTAINING PAGES 119 TO 125 WHICH SHOWED THAT CASH WAS PAID TO VARIOUS P ERSONS. THIS DOCUMENT WAS CONFRONTED TO THE ASSESSEE DURING THE SEARCH AND IN THIS REGARD THE RELEVANT QUESTION / ANSWERS ARE AS UNDER:- Q. I AM SHOWING YOU ANNEXURE A/4 PAGES 119-125 SEI ZED FROM OFFICE AT SECTOR-34. PLEASE EXPLAIN WHOSE HAND WRITING THIS IS. PLEASE ALSO EXPLAIN THE SOURCE OF AMOUNTS PAID TO VARIOUS PERSONS INCLUDING YOURSELF AND SH. ADITYA G OYAL. ALSO EXPLAIN ON WHAT ACCOUNTS WERE THESE PAYMENTS M ADE. ANS. THIS PAPER IS IN THE HANDWRITING OF SH. SATISH GUPTA WHO IS CASHIER IN OUR SECTOR 34 OFFICE. ON THIS PAP ER HE HAS MAINTAINED DAY TO DAY RECORDS OF CASH HANDLED BY HI M. ALL THE ENTRIES HAVE DULY BEEN RECORDED IN THE REGULAR BOOK S OF ACCOUNTS OF DIFFERENT COMPANIES OF OUR GROUP. IT WAS FURTHER FOUND THAT TOTAL EXPENSES SHOWN IN THIS DOCUMENT WAS TOTALING TO RS. 74,86,364/-. THE ASSESSEE HAD SURRENDERED A SU M OF RS. 8 CORES. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE HAD CONSIDERED ONLY EXPENSES OF RS. 30 LAKHS IN THIS SURRENDER THEREFORE, A SUM OF RS. 44,86,364 /- STILL REMAINS UNEXPLAINED AND ACCORDINGLY HE ADDED THIS AMOUNT TO THE INCOME OF THE ASSESSEE. 4. BEFORE CIT(A) IT WAS MAINLY SUBMITTED THAT ASSES SEE HAD SHOWN CERTAIN SPECIFIC ITEMS FOR SURRENDER IN ADDITION TO THE SPE CIFIC ITEMS. FURTHER AMOUNT OF RS. 421.96 LAKHS WAS ALSO SURRENDERED WHICH WOULD C OVER THIS AMOUNT. THE LD. CIT(A) FOUND FORCE IN THESE SUBMISSIONS AND DELETED THE ADDITION. 5. BEFORE US, LD. DR SUPPORTED THE ORDER OF ASSESSI NG OFFICER AND ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SUPPORT ED THE IMPUGNED ORDER. 3 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY THE LD. CIT(A) IN PARAS 6.1 TO 6.3, WHICH ARE AS UNDER:- 6.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE IMPUGNED ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PROVIDED A BREAKUP OF THE SURRENDER MADE O F RS. 8 CRS IN THE COURSE OF SEARCH, FOLLOWED BY SEPARATE LETTER TO TH E INVESTIGATION WING. THIS SURRENDER OF RS. 8 CRORES HAVE BEEN INCL UDED IN HIS RETURN OF INCOME FILED. PARA 4 OF THE IMPUGNED ORDER ELUCI DATES AS UNDER:- 1 CASH FOUND- THIS CASH BELONGS TO VARIOUS COMPANIES IN OUR GROUP CONCERNS AS SURRENDER HAS BEEN MADE AND THE SAME IS COVERED BY THE SURRENDERED MADE WHICH HAS BEEN EARN ED FROM THE FINANCIAL ACTIVITIES. 87.70 2 JEWELLERY-THE SAME IS COVERED BY THE SURRENDERED MADE WHICH HAD BEEN EARNED FROM THE FINANCIAL ACTIVITIES . 250.34 3 MISC - EXP- INCURRED AT PERSONAL LEVEL AND THE SA ME IS COVERED BY THE SURRENDERED MADE FROM THE INCOME FRO M THE FINANCIAL ACTIVITIES. 30.00 4 OTHER VARIOUS EXPENSES 10.00 5 BALANCE AMOUNT IS SURRENDERED VOLUNTARILY 421.96 800.00 6.2 THUS IT IS APPARENT FROM THE ABOVE THAT RS. 421 .96 LACS OUT OF RS. 8 CRS HAVE BEEN SURRENDERED VOLUNTARILY. THE TA X ON THE TOTAL SURRENDER IN HIS HANDS ALSO STOOD PAID AND THAT BES IDES CASH AND JEWELLERY, AN AMOUNT OF RS. 30 LACS WAS SURRENDERED SEPARATELY AS MISC EXPENSES APART FROM RS. 10 LACS TO COVER OTHER VARIOUS EXPENSES. SO IT WAS STRONGLY ARGUED THAT THE ADDITI ON MADE BY THE AO IS COVERED IN THE VOLUNTARILY SURRENDER OF RS. 4 21.96 LACS. 6.3 THE ASSESSEE NO DOUBT HAS FILED CONFIRMATIONS E TC AS ELUCIDATED IN HIS SUBMISSIONS IN SUPPORT OF ITS CON TENTION AS RAISED IN GROUND OF APPEAL NO. 5. BE THAT AS IT MAY, A VOL UNTARILY SURRENDER OF RS. 421.96 LACS HAS BEEN MADE WHICH HAS NOT BEEN LINKED/CORROBORATED WITH ANY INCRIMINATING DOCUMENT S DURING THE SEARCH OR POST SEARCH INVESTIGATIONS, NOR ASSESSMEN T PROCEEDINGS. THE ADDITION MADE BY THE AO ON ACCOUNT OF THE SEIZE D DOCUMENT 4 HERE IS TO THE TUNE OF RS. 44.8 LACS. THUS, WITHOUT GOING INTO THE MERITS OF THE DETERMINATION BY THE AO, I AM INCLINE D TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF RS. 4 4.8 LACS IS COVERED IN THE VOLUNTARY SURRENDER ON WHICH THE TAX ES HAVE ALSO BEEN PAID. IN ANY CASE ASSESSEE DESERVES TO GET THE BENEFIT OF TELESCOPY IN VIEW OF THE DECISION OF HONBLE SUPREM E COURT IN THE CASE OF ANANTHARAM VEERASIMGHIAH & CO. (123 ITR 457 ) AS THE ASSESSEE HAS ALREADY MADE A SURRENDER OF RS. 421.96 LACS DURING THE YEAR UNDER APPEAL VOLUNTARILY. 7. WE FIND NOTHING WRONG WITH THE ABOVE REASONING B ECAUSE ONCE ASSESSEE HAS SURRENDERED AS SUM OF RS. 421.96 LAKHS VOLUNTAR ILY THAT WOULD COVER THE OTHER DISCREPANCIES. ACCORDINGLY WE CONFIRM THE ORD ER OF LD. CIT(A),. 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.06.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 9THE JUNE, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR