Sh. Manjeet Singh, Agra V. Asstt. CIT (OSD), Agra

ITA 77/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0402 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-09-2010
• Assessment Year: 1994-1995
• Appeal Filed On: 25-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA BEFORE SHRI R.K. GUPTA, J. M. AND SHRI P.K. BANSAL, A.M. PAN NO. AKYPS 5098 N I.T.A.NO . 78/AGR/2010 A. Y. 1994-95 INCOME-TAX OFFICER, SHRI MANJEET SINGH, 1(3) VS. M. G. ROAD, AGRA AGRA APPELLANT RESPONDENT I.T.A.NO . 77/AGR/2010 A. Y. 1994-95 SHRI MANJEET SINGH, INCOME-TAX OFFICER, M. G. ROAD, VS. 1(3) AGRA AGRA APPELLANT RESPONDENT DEPARTMENT BY : SHRI VINOD KUMAR JR. DR ASSESSEE BY : SHRI RAJENDRA SHARMA, ADV. O R D E R PER R.K.GUPTA, J.M. THESE ARE TWO APPEALS BY THE ASSESSEE AND DEPARTME NT AGAINST THE ORDER OF LD. CIT(A) RELATING TO ASSESSMENT YEAR 199 4-95. 2. THE ASSESSEE IN HIS APPEAL IS OBJECTING RESTRICTING THE ADDITION OF RS. 90,705/- MADE ON ACCOUNT OF ESTIMATION OF NET P ROFIT ON SALE OF COUNTRY LIQUOR. THE LD.COUNSEL FOR THE ASSESSEE HAS STATED THAT THE ASSESSEE - 2 - 2 HAS SURRENDERED A SUM OF RS. 3 LAKHS BESIDES INCOME OF RS. 6.80 LAKHS. IT IS SUBMITTED THAT SINCE THE AMOUNT ADDITION SUSTAIN ED BY THE LD. CIT(A) IS MUCH LESS THAN THE INCOME SURRENDERED BY THE ASSESS EE, THEREFORE, TELESCOPING OF THE SAME SHOULD BE ALLOWED TO HIM. O N THE OTHER HAND, THE LD. SENIOR DR PLACED RELIANCE ON THE ORDER OF THE L D. CIT(A). 3. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE OTHER MATERIAL ON RECORD, WE FIND THAT THE CONTENTION OF THE ASSESSEE SEEMS TO BE CORRECT. THE ASSESSEE HAS SURRENDERED A SUM OF RS. 3 LAKHS ON ACCOUNT OF INCOME FROM OTHER SOURCES AS HAS NOT AVAILED THE BE NEFIT OF THE SAME IN ANY OF THE ASSETS OR OTHERWISE. THEREFORE, IF BY AN Y REASON ANY ADDITION IS SUSTAINED THAT SHOULD BE TELESCOPED AGAINST THE INC OME SURRENDERED BY THE ASSESSEE AS THAT AMOUNT IS AVAILABLE WITH THE ASSES SEE FOR TELESCOPING. IN VIEW OF THESE FACTS, WE DIRECT THE ASSESSING OFFICE R TO GIVE TELESCOPING TO THE ASSESSEE AFTER ASCERTAINING THE AMOUNT OF SURRE NDER WAS AVAILABLE WITH THE ASSESSEE. WE ORDER ACCORDINGLY. 4. IN APPEAL OF THE DEPARTMENT , THE DEPARTMENT IS OB JECTING ALLOWING THE TELESCOPING OF RS. 6.80 LAKHS AGAINST ESTIMATED INCOME OF RS. 28,82,802/-. THE ASSESSEE FILED INCOME DECLARIN G INCOME OF RS. 14,95,870/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT SHOWN THE INCOME PROPERLY. HE RECASTED THE PROFIT AND LOSS ACCOUNT BY TAKING INTO CONSIDER ATION THE FRESH PURCHASE PRICE OF THE LIQUOR, CAPSULING CHARGES AND ALSO TAK ING INTO CONSIDERATION - 3 - 3 OTHER FACTORS THAT THERE IS NO NEXUS BETWEEN THE BO RROWING AND INCOME UNDER OTHER HEADS AND SUM OF RS. 13.60 LAKHS HAS BE EN HELD AS UNEXPLAINED INCOME IN THE ORDER FOR ASSESSMENT YEAR 1991-92 ON WHICH INTEREST WAS ALSO DISALLOWED. BY OBSERVING THESE OB SERVATIONS, THE INCOME OF THE ASSESSEE WAS COMPUTED IN THE FOLLOWING MANNE R :- A. INCOME FROM LIQUOR BUSINESS AS COMPUTED ABOVE. 55,43,850/- B. INCOME FROM OTHER SOURCES, AS SHOWN A. INTEREST RECEIVED 2,08,262 B. INTEREST FDR SHOWN 2,48,535 C. INTEREST & DIV 1,043 D. INCOME SURRENDERED AT THE TIME OF SEARCH 6,80,000 E. OTHER INCOME 3,00,000 14,37,840/- C. INCOME FROM HOUSE PROPERTY RENTAL INCOME, AS SHOWN 42,667/- 70,24,357/- LESS : DEDUCTION UNDER SECTION 80L AS CLAIMED 10,0000/- 70,14,357/- OR 70,14,360/- 5. THIS ESTIMATION OF THE INCOME WAS TAKEN BY THE ASSE SSING OFFICER, WHO PASSED ASSESSMENT ORIGINALLY. THE ASSE SSEE FILED APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE APP EAL FOUND THAT THE ASSESSEE HAS HIMSELF, DECLARED PROFIT OF RS. 27,98, 097/- INCLUDING SURRENDER OF RS. 6.80 LAKHS AND, THUS, NO ADDITION WOULD BE CALLED FOR AND, ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFF ICER IS DELETED. THE DEPARTMENT FILED THE APPEAL BEFORE THE TRIBUNAL, W HO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORED THE MATTER TO THE FI LE OF THE ASSESSING OFFICER. THEREAFTER, THE REASSESSMENT PROCEEDINGS W ERE COMPLETED AND THE - 4 - 4 INCOME FROM IMFL WAS COMPUTED AT RS. 28,82,802/- AG AINST INCOME OF RS. 21,12,097/- SHOWN BY THE ASSESSEE, WHICH RESULT ED IN ADDITION OF RS. 6.80 LAKHS. IT WAS CONTESTED BEFORE THE LD. CIT(A) THAT THE COMPUTATION OF INCOME MADE BY THE ASSESSING OFFICER IS NOT CORRECT . IT WAS SUBMITTED THAT THE ASSESSEE HIMSELF HAS SHOWN INCOME OF RS. 1 2 LAKHS OR ODD AND THE ADDITIONAL AMOUNT OF RS. 6.80 LAKHS WAS SURREND ERED BY THE ASSESSEE AT THE TIME OF SEARCH, WHICH FORMS PART OF THE RETU RNED INCOME SHOWN EARLIER AT RS. 14,75,869/-. THEREFORE, THE ADDITION OF RS. 6.80 LAKHS MADE BY THE ASSESSING OFFICER AMOUNTED TO DOUBLE ADDITIO N. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD , THE LD. CIT(A) FOUND THAT THE SURRENDERED INCOME OF RS. 6.80 LAKHS IS LI ABLE TO BE TELESCOPED AGAINST THE ESTIMATED INCOME OF RS. 28,82,802/-. TH E LD. CIT(A) FURTHER NOTED IN HIS ORDER I.E. INCOME DECLARED BY THE ASSE SSEE AT RS. 21,12,096/- AND THE SURRENDERED AMOUNT OF RS. 6.80 LAKHS IS TAK EN INTO CONSIDERATION, THEN THE ADDITION OF RS. 90,705/- IS LIABLE TO BE S USTAINED. ACCORDINGLY, THE ADDITION OF RS. 90,705/- WAS SUSTAINED. THE DEP ARTMENT IS OBJECTING ALLOWING THE TELESCOPING OF RS. 6.80 LAKHS AND ASSE SSEE IS OBJECTING SUSTAINING THE ADDITION OF RS. 90,705/-. 6. ASSESSEES GROUND, WE HAVE ALREADY DISPOSED OF BY D IRECTING THE ASSESSING OFFICER TO ALLOW TELESCOPING IF THE AMOUN T OUT OF SURRENDER OF RS. 3 LAKHS ON ACCOUNT OF INCOME FROM OTHER SOURCES IS AVAILABLE WITH THE ASSESSEE. - 5 - 5 7. IN THE GROUND OF THE DEPARTMENT , WE FIND NO SUBSTA NCE AS LD. CIT(A) HAS ONLY ALLOWED TELESCOPING AGAINST THE INC OME SHOWN BY THE ASSESSEE. IF THE ESTIMATED INCOME BY THE ASSESSING OFFICER IS MORE THAN THE INCOME DECLARED BY THE ASSESSEE PLUS SURRENDERE D AMOUNT, THEN, OFCOURSE, TELESCOPING HAS TO BE ALLOWED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE SEE NO INFIRMITY IN THE FINDING O F THE LD. CIT(A) IN RESPECT OF GROUND OF THE DEPARTMENT . ACCORDINGLY, GROUND OF THE DEPARTMENT FAILS. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS DISPOSED OF AS INDICATED ABOVE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2010. SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA DATED : 17 TH SEPTEMBER,2010. CPU* 16179 COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) CONCERNED. THE D.R, ITAT AGRA. GUARD FILE BY ORDER, AR, I.T.A.T., AGRA.