Deputy Commissioner of Income-Tax, Central Circle 2(2), Pune V. Ishwarchand Goyal , Pune

ITA 744/PUN/2022

AI Insights

The case involves cross-appeals by the assessee, Ishwarchand Goyal, and the Revenue against the order of the CIT(A)-12, Pune, concerning additions made during the assessment year 2020-2021 under section 143(3) of the Income Tax Act, 1961. The primary contention in the assessee's appeal was the addition of Rs.25 lakhs as per section 69C, which was based on a seized document during a search operation. The Tribunal found that the document did not provide sufficient evidence to support the addition. In the Revenue's appeal, the issue was the CIT(A)'s grant of a telescoping benefit to the assessee, which the Tribunal upheld, noting that the on-money component had been declared in the hands of related entities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137291 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2023
• Appeal Filed By: Department
• Order Result: DismissedDismissed
• Bench Allotted: A
• Next Hearing Date: 28-03-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 13-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G.D. PADMAHSHALI, ACCOUNTANT MEMBER ITA No.701 & 744/PUN./2022 Assessment Year 2020-2021 Ishwarchand Goyal, Office 501/502, Fortune House, 117A Prabhat Road, Erandwane, Pune. Maharashtra PIN 411 004 PAN ADTPG5614N vs. The DCIT, Central Circle – 2 (2), Aayakar Bhavan, Bodhi Towers, Salisbury Park, Pune – 411 009. Maharashtra. Appellant Respondent & Cross Appellant Assessee by : Shri Nikhil S Pathak & Shri Kailash Agarwal Revenue by : Shri Ramnath P Murkunde Date of hearing : 29.03.2023 Date of pronouncement : 31.03.2023 आदेश / ORDER PER SATBEER SINGH GODARA, JM : These assessee’s and Revenue’s cross appeals ITA.Nos.701 & 744/PUN./2012 arise against the CIT(A)-12, Pune’s DIN & Order No.ITBA/APL/S/250/2022-23/1044117409 (1), dated 26.07.2022, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short "the Act"). Heard both the parties. Case files perused. 2. We straightaway come to the assessee’s appeal ITA.No.701/PUN./2022 first of all raising his sole substantive grievance challenging correctness of both the learned lower authorities action making sec.69C addition of Rs.25 lakhs in the 2 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. course of assessment herein dated 30.09.2021, as upheld in the CIT(A)'s order as follows : 3 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. 3. Both the learned representatives reiterated their respective stands against and in support of the impugned addition. It is an admitted fact that the learned lower authorities have made the impugned addition in assessee’s hands based on the alleged seized document i.e., paper no.3 of bundle no.1 during the course of search at his premises dated 22.11.2019. The Assessing Officer is fair enough in reproducing contents of this seized document at page no.12 of his assessment order. We note from a perusal thereof that this sum represents as cash component over and above the bill/ cheque amount of Rs.38,27,216/- as added by VAT @ 12.5% thereupon. Faced with the situation, we sought to know from the Revenue side as to whether the said other cheque component has 4 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. seen light of the day in any transaction between the parties or not. The reply received is in negative only. 4. Faced with the situation, Mr. Murkunde vehemently argued that it was the assessee’s onus only to rebut the statutory presumption u/s.292C of the Act by way of leading his cogent evidence throwing sufficient light on the above stated seized document’s contents. 5. All these Revenue’s arguments failed to evoke our concurrence. This is for the precise reason that not only the assessee’s as well as the concerned scribe Shri Sunil Shinde’s search statement, dated 09.01.2020 and 11.01.2020, respectively, have not indicated any such transaction but also there is no supporting evidence unearthed by the department regarding the same to have been executed between the parties which could also include the alleged on money component in issue. We, therefore, hold that even sec.292C statutory presumption also fails to support the Revenue’s case. We accordingly conclude that both the learned lower authorities have erred in law and on facts in making the impugned addition of Rs.25 lakhs based on a “dumb” document only. The same is directed to be deleted. The assessee’s instant sole substantive grievance as well as main appeal ITA.No.701/PUN./2022 succeed therefore. 5 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. 6. This leaves us with Revenue’s cross-appeal seeking to reverse the CIT(A)'s action granting telescoping benefit of Rs.67,11,124/- to the assessee vide following discussion : “Findings : 4.2. I have considered the facts of the case. Briefly, the facts are that during 6 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. 7 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. 8 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. 7. We have given our thoughtful consideration to the vehement rival stands regarding telescoping benefit denied to the assessee in course of assessment as reversed in the CIT(A)'s foregoing detailed discussion. We make it clear that there is no dispute between the parties regarding the alleged cash found of Rs.1,84,28,456/-, cash sum seized of Rs.1,50,00,000/- as well as cash in hand of Rs.1,17,17,332/- as on the date of search i.e., 22.11.2019. The sole issue herein is regarding the balance amount of Rs.67,11,124/- i.e., Rs.1,84,28,456/- (-) Rs.1,17,17,332/- only. The Revenue’s case before us is that the CIT(A)'s has erred in law and on facts in granting the impugned telescoping benefit of the alleged excess cash component of Rs.67,11,124/- in the hands of assessee’s group entities. Mr. Murkunde has also vehemently supported the assessment findings to this effect. He could hardly rebut the clinching fact that the alleged on money component of Rs.77,55,050/- had been duly declared in the hands of M/s. Yellow 9 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. Stone LLP and M/s. Prestine Developers to the tune of Rs.37 lakhs and Rs.46,55,050/-, respectively, as against the impugned unexplained cash of Rs.67,11,124/- in issue. At this stage, Mr. Murkunde sought to buttress the point that there is no live link between the foregoing declaration vis-à-vis the same in issue before us. We are of the view that once the impugned search has been conducted at the premises of all these group entities and due credit has been given to them to the extent of income declared in their returns, there is hardly any justification left with the department not to adopt the very course of action qua this remaining component of Rs.67,11,124/- as well which has been directed to be telescoped against the on money receipts of Rs.77,55,050/-. Faced with the situation, we uphold the CIT(A)'s directions under challenge. The Revenue fails in its sole substantive grievance. It’s appeal ITA.No.744/PUN./2022 is rejected. 8. No other ground or argument has been pressed before us. 9. To sum-up, assessee’s appeal ITA.No.701/PUN./2022 is allowed and the Revenue’s cross-appeal ITA.No.744/PUN./2022 is dismissed in above terms. A copy of this common order be placed in the respective case files. 10 ITA.No.701 & 744/PUN./2022 Ishwarchand Goyal, Pune. Order pronounced in the Open Court on 31.03.2023. Sd/- Sd/- (G.D. PADMAHSHALI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 31 st March, 2023 VBP/- Copy of the Order is forwarded to: 1. The Appellant; 2. The Respondent; 3. The CIT(A), Pune-12, Pune 4. 5. 6. The Pr. CIT, Central, Pune The DR ‘A’, ITAT, Pune Guard File BY ORDER, // True Copy // Senior Private Secretary ITAT, Pune