Subhash Dattu Patil, Sangli V. Income-tax Officer,

ITA 728/PUN/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7680 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-02-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Business income
• Section: 133A; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S. 467 & 728 /P U N/201 4 / ASSESSMENT YEAR S : 20 0 9 - 10 & 2010 - 11 SUBHASH DATTU PATIL, BALAJI JEWELLERS, MANGALWAR PETH, JATH, SANGLI 416404 PAN : AGZPP8634N ....... / APPELLANT / V/S. INCOME TAX OFFICER, WARD 1(2), SANGLI / RESPONDENT ASSESSEE BY : S HRI SUNIL GANOO REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 03 - 05 - 2018 / DATE OF PRONOUNCEMENT : 09 - 0 5 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH ESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) , KOLHAPUR. IN ITA NO. 467/PUN/2014 THE ASSESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 19 - 12 - 2013 FOR THE ASSESSMENT YEAR 2009 - 10 AND ITA NO. 728/PUN/2014 IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 10 - 01 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11. SINCE, ISSUES INVOLVED IN THESE APPEALS ARE ARISING FROM SAME SET OF 2 ITA N OS. 467 & 728/PUN/2014, A.YS. 2009 - 10 & 2010 - 11 FACTS AND ARE SIMILAR, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AN D ARE DISPOSED OFF VIDE THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN TRADING OF GOLD AND SILVER ORNAMENTS UNDER THE NAME AND STYLE OF M/S. BALAJI JEWELLERS. A SURVEY ACTION U/S. 133A O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 10 TH AND 11 TH FEBRUARY, 2010. IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY , THE ASSESSEE VOLUNTARILY DECLARED AN ADDITIONAL I NCOME OF RS.80,30,460/ - FOR THE ASSESSMENT YEAR 2010 - 11. NO RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 U/S. 139(1) OF THE ACT FILED BY THE ASSESSEE TILL SURVEY. THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009 - 10 AFTER SURVEY ON 31 - 03 - 2010 DECLARING TOTAL INCOME OF RS.2,66,150/ - AND AGRICULTURAL INCOME OF RS.3,69,947/ - . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED NET PROFIT AT 9.89% ON ESTIMATED SALES OF RS.5 3,08,027/ - . TH E ASSESSING OFFICER COMPUTED TOTAL INCOME OF THE ASSESSEE AT RS.5,24,060/ - FOR THE ASSESSMENT YEAR 2009 - 10. 2.1 FOR THE ASSESSMENT YEAR 2010 - 11 THE ASSESSEE FILED RETURN OF INCOME ON 15 - 09 - 2010 DECLARING TOTAL INCOME AT RS.4,56,000/ - AND AGRICULTURAL INCOME OF RS.2,65,300/ - . THE ASSESSEE DID NOT OFFER RS.80,30,460/ - ADDITIONAL INCOME DECLARED DURING SURVEY PROCEEDINGS. THE ASSESSING OFFICER FURTHER ESTIMATED BUSINESS INCOME OF ASSESSEE AS RS.7,50,000/ - . THE ASSESSING OFFICER ASSESSED T OTAL INCOME AT RS.87,80,460/ - FOR THE ASSESSMENT YEAR 2010 - 11. 3 ITA N OS. 467 & 728/PUN/2014, A.YS. 2009 - 10 & 2010 - 11 AGGRIEVED BY THE ASSESSMENT ORDER FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE FILED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE APPEAL S OF ASSESSEE IN TOTO VIDE IMPUGNED ORDERS. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. 3. SHRI SUNIL GANOO APPEA RING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN ASSESSMENT YEAR 2009 - 10 THE ASSESSING OFFICER HAS ERRED IN ESTIMATING THE SALE OF ASSESSEE AT RS. 53,08,027/ - AS AGAINST RS.35,38,685/ - DECLARED BY THE ASSESSEE. THE LD. AR SUBMITTED THAT DURING THE COURSE O F SURVEY A CD WAS GIVEN TO THE SURVEY PARTY CONTAINING ACCOUNTS FOR THE PERIOD 01 - 04 - 2008 TO 31 - 03 - 2009 AND 1 - 04 - 2009 TO 31 - 03 - 2010. THE AUTHORITIES BELOW FAILED TO TAKE NOTE OF THE ACCOUNTS GIVEN IN CD , THEREFORE, THE TRADING ACCOUNT FURNISHED BY THE ASS ESSEE DURING THE COURSE OF ASSESSMENT COULD NOT BE RECONCILED. THE LD. AR SUBMITTED THAT IF AN OPPORTUNITY IS GRANTED TO THE ASSESSEE , THE ASSESSEE WOULD EXPLAIN AND RECONCILE THE ACCOUNTS FURNISHED DURING SURVEY WITH THE ACCOUNTS FURNISHED AT THE TIME OF ASSESSMENT. THE LD. AR TO FURTHER ASSERT HIS PRAYER TO RESTORE THE ISSUE BACK TO ASSESSING OFFICER TENDERED FOLLOWING WRITTEN SUBMISSIONS : 1 . THE APPELLANT ASSESSEE IS AN INDIVIDUAL AND CARRIES ON THE BUSINESS OF PURCHASE AND SALE OF GOLD ORNAMENTS AND S ILVER UTENSILS . 2 . THERE WAS A SURVEY ACTION ON THE APPELLANT ASSESSEE ON 11/02/2010 AND DURING THE SAID ACTION THE APPELLANT HAS DISCLOSED INCOME OF RS.80,30,460.00 ON ACCOUNT OF UNEXPLAINED CASH OF RS.6,48,300.00 AND EXCESS STOCK OF RS.73,82,160.00 [PLE ASE REFER PAGE NO.7 OF PAPER BOOK FILED FOR A.Y.2009 - 10] . 3 . DURING THE COURSE OF SURVEY ACTION THE CDS OF ACCOUNTS FOR THE PERIOD 01/04/2008 TO 31/03/2009 AND 01/04/2009 TO 31/03/2010 WERE HANDED OVER TO THE SURVEY PARTY.[PLEASE REFER PAGE NO.10 OF PAPER BOOK FILED FOR A.Y.2009 - 10] . 4 . THE TENTATIVE TRADING AND PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON DATE OF SURVEY FOR THE PERIOD 01/04/2008 TO 11/02/2009 WERE PREPARED. THE SAME IS R EPRODUCED BY THE LEARNED ASSESSING OFFICER IN THE IMPUGNED ORDER FOR A.Y.2009 - 10 ON PAGE NO.4 & 5. 4 ITA N OS. 467 & 728/PUN/2014, A.YS. 2009 - 10 & 2010 - 11 5 . UPON FINALIZATION OF ACCOUNTS THE APPELLANT ASSESSEE FILED HIS RETURN OF INCOME FOR THE A.Y.2009 - 10 ON 31/03/2010 . 6 . THE LEARNED ASSESSING OFFICER OBSERVED VAST VARIATIONS IN THE TENTATIVE ACCOUNTS AND ACCOUNTS PREPARED AT THE TIME OF SURVEY. 7 . THE LEARNED ASSESSING OFFICER NEVER COMPARED THE FINAL ACCOUNTS WITH THE ACCOUNTS GIVEN IN CDS, THE COPIES OF WHICH WERE HANDED OVER TO THE SURVEY TEAM . 8 . THE LEARNED ASSESSING OFFICER HAS ESTIMATED THE SALES AND N.P ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS . 9 . DURING THE COURSE OF ARGUMENTS IT WAS ARGUED ON BEHALF OF THE APPELLANT THAT THE LEARNED ASSESSING OFFICER OUGHT TO H AVE COMPARED THE FINAL ACCOUNTS WITH THE CDS IN HIS POSSESSION SO THAT THE ISSUES INVOLVED COULD HAVE BEEN PROPERLY APPRECIATED AND SETTLED. 10 . IT IS THEREFORE REQUESTED THAT IN THE INTEREST OF EQUITY AND JUSTICE THE MATTER MAY PLEASE BE RESTORED TO THE FILE OF THE LEARNED ASSESSING OFFICER TO COMPARE THE FINAL ACCOUNTS WITH THE ACCOUNTS COPIES IN CDS GIVEN TO THE DEPARTMENT. 4. ON THE OTHER HAND SHRI MUKESH JHA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX ( APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DR REFERRED TO TABLE IN PARA 2.3 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSING OFFICER HAS ALREADY TAKEN INTO CONSIDERATION THE TENTATIVE TRADING ACCOUNT SUBMITTED BY THE ASSESS EE AT THE TIME OF SURVEY AND TRADING ACCOUNT GIVEN DURING THE ASSESSMENT PROCEEDINGS. 4.1 THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE IN HIS STATEMENT RECORDED U/S. 133A OF THE ACT HAD MADE VOLUNTARILY DISCLOSURE OF RS.80,30,460/ - FOR THE ASSESSMENT YEAR 2010 - 11 BUT HAS NOT HONOURED THE SAME IN HIS RETURN OF INCOME. ITA NO. 467/PUN/2014 ( A.Y. 2009 - 10) 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2009 - 10 HAS ASSAILED THE ORDER OF 5 ITA N OS. 467 & 728/PUN/2014, A.YS. 2009 - 10 & 2010 - 11 COMMISSIONER OF INCOME TAX (APPEALS) IN CO NFIRMING THE ACTION OF ASSESSING OFFICER IN REJECTING OF BOOKS OF ACCOUNT AND ALSO ESTIMATING SALES WITHOUT THEIR BEING ANY SUPPORTING DOCUMENTS. THE LD. AR OF THE ASSESSEE STATED THAT THE ASSESSEE WOULD BE ABLE TO EXPLAIN AND RECONCILE THE ACCOUNTS FURNI SHED AT THE TIME OF SURVEY AND THE ACCOUNTS SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS. IT IS AN ADMITTED FACT THAT DURING SURVEY IT WAS FOUND THAT THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT AND NO RETURN OF INCOME FOR ASSESSMENT YEAR 20 09 - 10 WAS FILED. IT WAS ONLY AFTER SURVEY ACTION ON 11 - 02 - 2010 THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10. THE CONTENTION OF THE ASSESSEE IS THAT A CD CONTAINING TENTATIVE PROFIT AND LOSS ACCOUNTS WAS GIVEN TO THE SURVEY PART Y, H OWEVER, THE ASSESSING OFFICER HAS NOT TAKEN INTO CONSIDERATION THE CONTENTS OF CD AT THE TIME OF ASSESSMENT. THE LD. AR OF THE ASSESSEE HA S PRAYED FOR AN OPPORTUNITY TO EXPLAIN THE CONTENTS OF THE CD. WE OBSERVE THAT IN THE ASSESSMENT ORDER THER E IS NO REFERENCE TO CONTENTS OF CD. THUS, THE FACTS EMANATING FROM THE RECORDS AND THE SPECIFIC PRAYER MADE BY THE ASSESSEE TO GRANT OPPORTUNITY TO EXPLAIN THE CONTENTS OF CD WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE RAISED IN THE APPEAL BY THE ASSESSEE TO THE ASSESSING OFFICER FOR DE - NOVO ADJUDICATION. THE ASSESSING OFFICER BEFORE DECIDING THIS ISSUE AFRESH SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 728 /PUN/2014 (A.Y. 20 10 - 11 ) 6. SINCE, WE HAVE RESTORED THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 TO ASSESSING OFFICER, WE ARE OF CONSIDERED VIEW THAT APPEAL FOR ASSESSMENT YEAR 2010 - 11 SHOULD ALSO BE RESTORED TO ASSESSING OFFICER AS 6 ITA N OS. 467 & 728/PUN/2014, A.YS. 2009 - 10 & 2010 - 11 THERE CAN BE POSSIBILITY OF CHANGE IN CLOSING BALAN CES FOR THE FINANCIAL YEAR 2008 - 09 WHICH WOULD HAVE BEARING ON THE OPENING BALANCES OF FINANCIAL YEAR 2009 - 10 RELEVANT TO ASSESSMENT YEAR 2010 - 11 . THUS, WITHOUT GOING INTO THE MERITS OF APPEAL WE RESTORE THE APPEAL TO ASSESSING OFFICER FOR FINAL ADJUDICAT ION OF THE ISSUES. WE HOLD AND DIRECT ACCORDINGLY. THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WE DNESDAY, THE 09 TH DAY OF MAY, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 09 TH MAY, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) , KOLHAPUR 4. / THE CIT - I/II, KOLHAPUR/CIT(CENTRAL), PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE