ACIT, Jaipur V. SATISH AGARWAL, Jaipur

ITA 745/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99546 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 23-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT LD
• Assessee Lawyers: S L PODDAR DHK
• Keywords: Search and seizure; Earning of tax free income; Additional evidence; Non compliance
• Section: 143(3); 142(1); 153A; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 745/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2003-04 THE ACIT CENTRAL CIRCLE -3 JAIPUR CUKE VS. SHRI SATISH AGARWAL 129-E, GOVIND NAGAR, DUSHERRA KOTHI, AMBER ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABSPA 0790 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT LD. DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/11/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A), CENTRAL, JAIPUR DATED 16-07-2013 FOR THE AS SESSMENT YEAR 2003-04 RAISING FOLLOWING SOLE GROUND OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ,JAIPUR HAS ERRED IN DELETING THE ADDITI ON OF RS. 11,08,277/- MADE U/S 68 BY IGNORING THE FACTS BROUG HT ON RECORD AND NOT GIVING AN OPPORTUNITY TO THE AO WHILE ACCEP TING ADDITIONAL EVIDENCE. ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 2 2.1 BRIEF FACTS ARE ASSESSEE IS REGULARLY ASSESSED TO TAX. ON 27-8-08, SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON A SSESSEE. NOTICE U/S 153A WAS ISSUED AND ASSESSMENT HAS BEEN FRAMED U/S 143(3) RWS 153A; THERE IS NO REFERENCE TO ANY NON COMPLIANCE OF NOTI CE OR NOT FURNISHING OF EXPLANATION BY THE ASSESSEE. QUA THE ISSUE IN QUEST ION, ASSESSEE FILED AN EXPLANATION ABOUT JUSTIFICATION OF CLOSING BALANCE OF RS. 11,08,277/- AS ON 31-3-2002 WHICH BECAME OPENING BALANCE AS ON 1-4-20 03 BY FILING A COPY OF ACCOUNTS FROM HIS REGULAR BOOKS AND RELEVAN T REPLY IS QUOTED BY LD. AO IN HIS ORDER AS UNDER; 6. THE ASSESSEE WAS REQUIRED TO FURNISHED EVIDENC E IN SUPPORT OF AVAILABILITY OF CASH OF RS. 11,08,277/- DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2003-04 VIDE NOT ICE U/S 142(1) OF THE ACT DATED 19-10-2010. SIMILAR QUERY W AS EARLIER RAISED VIDE ORDER SHEET NOTING DATED 04-09- 2010 ALSO. IN COMPLIANCE TO THIS, WRITTEN SUBMISSION WAS RECEI VED VIDE LETTER DATED 02-12-2010 STATING AS UNDER:- WITH REFERENCE TO ABOVE AND AS PER REQUIRED BY YOU IN YOUR QUERY LETTER DATED 19-10-2010, WE ARE S UBMITTING HEREWITH AS UNDER:- 1. THAT AS PER REQUIRED BY YOU EVIDENCE IN SUPPORT OF AVAILABLE OF CASH OF RS. 11,08,277.69 AS ON 01-04-2 002 IN THIS REGARD OUR SUBMISSION ARE AS FOLLOWS:- OPENING BALANCE AS ON 01-04-2001 724677.69 ADD: WITHDRAWAL FROM CARPET PALACE 270000.00 ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 3 ADD: WITHDRAWAL FROM SBBJ 209600.00 1204277.69 LESS: DRAWINGS FROM HOUSE HOLD EXP. 96000.00 1108277.69 WE ARE ENCLOSING HEREWITH COPY OF CASH BOOK FROM 01 -04- 2001 TO 31-03-2002 FOR YOUR KIND PERUSAL. 6.1 I HAVE CONSIDERED THE SUBMISSION OF THE ASSESSE E AND FIND THAT NO CORROBORATIVE EVIDENCE HAS BEEN FI LED IN SUPPORT OF CLAIMS MADE AS ABOVE. NO COPY OF ACCOUNT OF ASSESSEE IN THE BOOKS OF M/S. CARPET PALACE HAS BEE N FILED NOR HAS ANY EVIDENCE OF WITHDRAWAL OF CASH FROM BAN K DURING THE PRECEDING YEAR BEEN SUBSTANTIATED BY FIL ING COPY OF BANK STATEMENT. THE OPENING BALANCE CLAIMED AS O N 01- 04-2001 OF RS. 7,24,677.69 IS AGAIN WITHOUT CORROBO RATIVE EVIDENCE AND SUCH SATMENT IS TREATED AS ONLY SELF S ERVING EVIDENCE TO JUSTIFY THE AVAILABLE OF CASH DURING TH E PERIOD RELEVANT TO ASSESSMENT YEAR 2003-04. THEREFORE, THE CLAIM MADE IN THE LETTER DATED 2-12-2010 IN SUPPORT OF AV AILABILITY OF CASH DURING THE PERIOD RELEVANT TO ASSESSMENT YE AR UNDER CONSIDERATION IS THEREFORE, REJECTED. THE SUM OF RS . 11,08,277.69 RECORDED IN THE CASH BOOK ON 01-04-200 2 IS CHARGED TO INCOME TAX AS INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 U/S 68 OF THE I.T. ACT. PEN ALTY PROCEEDINGS U/S 271(1)(C ) OF THE I.T. ACT ARE INIT IATED FOR FILING OF INACCURATE PARTICULARS OF INCOME . 2.2 AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL WHERE ASSESSEE REITERATED HIS STAND CONTENDING THAT ALL THE ABOVE DETAILS ARE DULY MENTIONED IN HIS REGULAR BOOKS OF ACCOUNTS AND THE COPY OF HIS PARTN ERSHIP A/C FROM THE FIRM M/S CARPET PALACE WAS ALSO FILED AND WAS PART OF FIRMS REGULAR ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 4 ACCOUNTS. THERE WAS NO MERIT WHATSOEVER IN THE ALLE GATIONS OF LD. AO. LD. CIT(A) HAS MENTIONED IN DETAILS THE EXPLANATION AND DOCUMENTS FURNISHED BY THE ASSESSEE BEFORE LD. AO. AFTER CONS IDERING THE ISSUE, FACTS AND MATERIAL AVAILABLE ON RECORD, LD. CIT(A) DELETE D THE ADDITION BY FOLLOWING OBSERVATIONS:- 4.3 I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND SUBMISSIONS OF THE A.R. AND CONCUR WITH THE SUBMISS IONS OF THE A.R. ON THE FOLLOWING GROUND. (I) THE APPELLANT HAD BEEN FILING ITS RETURNS REGULARLY U/S 139(1). (II) THE RETURN FOR A.Y. 2002-03 WAS FILED U/S 139( 1) ON 31-03-2004 WHEREIN THE CAPITAL ACCOUNT AND BALANCE SHEET HAD ALSO BEEN FILED. (III) ON PERUSAL OF THE BALANCE SHEET FOR THE PERIO D 01-04-2001 TO 31-03-2002, IT IS SEEN THAT THE APPEL LANT HAD SHOWN CASH IN HAND OF RS. 11,08,277/- WHICH WAS DULY REFLECTED AS THE OPENING BALANCE OF THE CASH B OOK FOR A.Y. 2002-03. GIVEN THE ABOVE FACTS, IT IS HELD THAT THE OPENING CASH BALANCE OF RS. 11,08,277/- IS EXPLAINED AND VERIFIA BLE FROM THE REGULAR BOOKS OF THE APPELLANT. THEREFORE, THE ADDITION U/S 68 OF RS. 11,08,277/- IS DELETED. 2.3 LD. DR RELIED ON THE ORDER OF LD. AO AND CONTEN DS THAT THE COPY OF PARTNERSHIP A/C FROM THE FIRM M/S CARPET PALACE WAS NOT FURNISHED AND NO JUSTIFICATION OF OB AS ON 1-4-2003 WAS GIVEN BY THE ASSESSEE BEFORE AO. ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 5 LD. CIT(A) AWARDED THE RELIEF BY RELYING ON THIS EV IDENCE WITHOUT CONFRONTING IT TO LD. AO, THEREFORE THE ISSUE MAY B E SET ASIDE AND RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION. 2.4 LD. COUNSEL FOR THE ASSESSEE, VEHEMENTLY CONTEN DS THAT THERE IS NO MERIT IN THE ALLEGATION OF LD. AO AND DR. ASSESSEE IS REGULARLY ASSESSED TO TAX, THE CB AS ON 31-3-2003 AND OB AS ON 1-4-200 3 EMERGES FROM THE ASSESSEES OWN BOOKS. BESIDES IN THE RETURN OF INCO ME ASSESSEE HAS OFFERED EXEMPT INCOME AS A PARTNER FROM THE FIRM M/ S CARPET PALACE ALONG WITH A COPY OF THE RETURN. ATTENTION IS INVIT ED TO PAPER BOOK PAGES 1-7 FILED BY THE ASSESSEE WHICH WERE BEFORE LD. AO AS WELL AS LD. CIT(A). THUS THE FINDINGS GIVEN BY LD. AO THAT COPY OF A/C FROM THE FIRM M/S CARPET PALACE WAS NOT FURNISHED AND NO JUSTIFICATIO N OF OB AS ON 1-4- 2003 WAS GIVEN BY THE ASSESSEE IS ERRONEOUS AND CON TRARY TO RECORD. LD. COUNSEL MADE DETAILS SUBMISSIONS AND RELIES ON WRIT TEN SUBMISSIONS AND SUPPORTS THE ORDER OF LD. CIT(A) ON FOLLOWING LEGAL AND FACTUAL COUNTS: 1. THE FINDINGS OF LD. AO THAT COPY OF A/C FROM THE FI RM M/S CARPET PALACE WAS NOT FURNISHED AND NO JUSTIFICATIO N OF OB AS ON 1-4-2003 WAS FILED BEFORE HIM IS PATENTLY WRONG. ANY ADDITION BASED ON SUCH ERRONEOUS OBSERVATIONS IS LI ABLE TO BE DELETED. ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 6 2. NO NEW MATERIAL WAS PRODUCED BEFORE LD. CIT(A) AS A LLEGED IN THE GROUND OF REVENUE. ASSESSEE HAS DEMONSTRATED TH AT ALL THESE DOCUMENTS WERE BEFORE LD. AO AND COPIES ARE FILED W ITH PB. THE AOS FINDINGS ARE BASED ON NON APPRECIATION OF R ECORD. SINCE NO NEW MATERIAL WAS FILED BEFORE LD. CIT(A), THE REVENUE GROUND IS LIABLE TO BE DISMISSED ON THIS SCORE ALSO . 3. IT IS SETTLED LAW THAT IN SEARCH ASSESSMENT U/S 153 A NO ADDITION CAN BE MADE UNLESS THE SAME IS BASED ON ANY INCRIMI NATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR ANY I NFORMATION BASED ON SUCH INCRIMINATING MATERIAL. ASSESSEE IS R EGULARLY ASSESSED TO TAX COPY OF HIS PERSONAL A/C AND FROM T HE FIRM M/S CARPET PALACE BEING PART OF THE REGULAR BOOKS AND B ROUGHT FORWARD FROM PAST YEAR TO YEAR IS DISCLOSED RECORD. AMOUNTS COMING AS BROUGHT FORWARD ENTRIES FROM PAST RECORD CANNOT BE ADDED TO INCOME. RELIANCE IS PLACED ON:- (I) NUCHEM LTD. VS. DCIT (2004), 87 TTJ 166 (DEL.) (II) JINDAL UDYOG VS. ITO, (2003) 78 TTJ 820 (CHD.) (III) ITO VS. SHRI RADHA KRISHAN DISTRIBUTORS (1997 ) 58 ITD 47 (DEL.) (IV) OM STORES VS. ITO (1985) 22 TTJ 503 (ALL.) (V) ITO VS. MOKUL FINACNE (P) LTD. (2007) 110 TTJ 445 (DEL.) 4. THERE IS NO WHISPER OF ANY INCRIMINATING MATERIAL O R INFORMATION WHATSOEVER, FOUND DURING THE COURSE OF SEARCH IN THIS BEHALF. RELIANCE IS PLACED IN THE CASE OF JAI STEEL VS. ACIT, 259 CTR 281 (RAJ.). ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 7 LD. COUNSEL CONTENDS THAT NO NEW MATERIAL HAS BEEN FURNISHED AND IMPUGNED ADDITION HAS BEEN RIGHTLY DELETED BY LD. C IT(A), THE ORDER DESERVES TO BE UPHELD. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND CONSIDERED THE WRITTEN SUBM ISSIONS FILED BY THE ASSESSEE. FROM THE RECORD IT CLEARLY EMERGES THAT THE ALL THE RELEVANT PAPERS OF ASSESSEES IMPUGNED TRANSACTION INCLUDING COPIES OF HIS PERSONAL A/CS FOR AY 2002-03 & 03-04, PARTNERS A/C FROM THE FIRM M/S CARPET PALACE AND EXPLANATION OF OPENING BALANCE WE RE DULY FURNISHED BEFORE LD. AO. CONSEQUENTLY THERE IS NO MERIT IN TH E GROUND OF REVENUE THAT LD. CIT(A) ENTERTAINED NEW EVIDENCE. 2.5(1) ON MERITS ALSO ASSESSEE HAS DEMONSTRATED TH E BASIS AND JUSTIFICATION OF OB IN HIS PERSONAL A/C AS ON 1-4-2 003 BEING CB FROM 31- 3-2003, CONSEQUENTLY ADDITION HAS BEEN RIGHTLY DELE TED BY LD. CIT(A). 2.5(2) ON LEGAL ISSUE ALSO THE TRANSACTION IS DULY REFLECTED IN THE REGULAR BOOKS OF THE ASSESSEE. THERE IS NO REFERENC E BY LD. AO TO ANY INCRIMINATING MATERIAL OR INFORMATION WHATSOEVER, F OUND DURING THE COURSE OF SEARCH IN THIS BEHALF. IN THESE FACTS AND CIRCUMSTANCES THE ITA NO. 745/JP/2013 ACIT , CENTRAL CIRCLE- 3, JAIPUR VS. SHRI SATISH AG ARWAL . 8 JUDGMENT OF JURISDICTION HIGH COURT IN THE CASE OF JAI STEELS AND OTHER PRECEDENTS (SUPRA) ARE APPLICABLE TO ASSESSEES CAS E. 2.5(3) IN VIEW OF THE AFOREMENTIONED FACTS, CIRCUM STANCES AND LEGAL POSITION THE ORDER OF LD. CIT(A) IS UPHELD AND REV ENUE GROUND IS DISMISSED. 3.0 IN THE RESULT, THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /11/20 15 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CENTRAL CIRCLE- -3, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI SATISH AGARWAL, 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. 745/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR