DCIT, Central Circle - XXI, Kolkata, Kolkata V. Shri Pradeep Kumar Jhawar, Kolkata

ITA 779/KOL/2011

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6500 (ITAT-KOLKATA)
• Duration Of Justice: 7 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SAURAV KUMAR C IT N
• Keywords: Unexplained expenditure; Income from undisclosed sources; Search and seizure; Document seized; Additional evidence; Retraction; Documents seized

Judgement Text

ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C B ENCH, KOLKATA BEFORE : SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBE R I.T.A. NO. 779/KOL/2011 A.Y : 2006-07 DCIT, CENTRAL CIRCLE-XXI, KOLKATA 18, RABINDRA SARANI, PODDAR COURT, 5 TH FLOOR KOLKATA-1 AP PELLANT -VS- SHRI PRADEEP KUMAR JHAWAR C/O MODERN LATEX (I) LTD. PAN: ACPPJ 8809 B RESPONDENT APPEARANCES BY: FOR THE APPELLANT: SHRI SAURAV KUMAR, ADDL. C IT FOR THE RESPONDENT: NONE DATE OF HEARING : 07/01/ 2019 DATE OF PRONOUNCEMENT : 18/01/2019 SHRI. S.S.VISWANETHRA RAVI, JM: 1. THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 28.02.2011 PASSED BY THE LD. CIT(A), CENTRAL-2, KOLKATA FOR AS SESSMENT YEAR 2006-07. ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 2 2. THE APPELLANT REVENUE FILED THIS APPEAL ON 20.05 .2011. THE REGISTRY ISSUED 33 NOTICES TO THE ASSESSEE BY RPAD BY INTIMA TING THE DATES OF HEARING WHICH ARE AS FOLLOWS: SL. NO. DATE OF NOTICE DATE OF HEARING REMARKS I. 28.10.2011 20.12.2011 NO PROCEEDINGS II. 20.12.2011 02.04.2012 NO PROCEEDINGS III. 02.04.2012 31.07.2012 NO PROCEEDINGS IV. 31.07.2012 11.01.2013 AR REQUESTED FOR TIME V. 11.01.2013 11.07.2013 NO PROCEEDINGS VI. 11.07.2013 23.12.2013 AR REQUESTED FOR TIME VII. 23.12.2013 23.04.2014 AR SOUGHT TIME VIII. 23.04.2014 09.09.2014 AR REQUEST FOR TIME IX. 09.09.2014 17.12.2014 AR REQUEST FOR TIME X. 17.12.2014 24.02.2015 DR REQUESTED TIME XI. 24.02.2015 02.06.2015 NO PROCEEDINGS XII. 02.06.2015 22.07.2015 NO PROCEEDINGS. XIII. 22.07.2015 26.10.2015 NO PROCEEDINGS. XIV. 26.10.2015 30.12.2015 NO PROCEEDINGS. XV. 30.12.2015 22.02.2016 NONE APPEAR XVI. 22.02.2016 27.04.2016 DR REQUESTED FOR TIME XVII. 27.04.2016 30.06.2016 NONE APPEARED ON BEHALF OF ASSESSEE XVIII. 30.06.2016 13.09.2016 DR REQUESTED FOR TIME XIX. 13.09.2016 22.01.2016 NO PROCEEDINGS XX. 22.11.2016 25.01.2017 NONE APPEARED ON BEHALF O F ASSESSEE. XXI. 25.01.2017 29.03.2017 NONE APPEARED ON BEHALF OF ASSESSEE. XXII. 29.03.2017 07.06.2017 NONE APPEARED ON BEHALF OF ASSESSEE. XXIII. 07.06.2017 16.08.2017 NONE APPEARED ON BEHAL F OF ASSESSEE. XXIV. 16.08.2017 05.10.2017 NONE APPEARED ON BEHALF OF ASSESSEE. XXV. 05.10.2017 14.11.2017 NONE APPEARED ON BEHALF OF ASSESSEE. XXVI. 14.11.2017 28.12.2017 NONE APPEARED ON BEHALF OF ASSESSEE. XXVII. 28.12.2017 22.02.2018 NONE APPEARED ON BEHAL F OF ASSESSEE. XXVIII. 22.02.2018 24.04.2018 NONE APPEARED ON BEHALF OF ASSESSEE. XXIX. 24.04.2018 06.06.2018 NONE APPEARED ON BEHALF OF ASSESSEE. XXX. 06.06.2018 19.09.2018 NO PROCEEDINGS. XXI. 19.09.2018 25.09.2018 NONE APPEARED ON BEHALF OF ASSESSEE. XXII. 25.09.2018 22.11.2018 NO PROCEEDINGS. XXIII. 22.11.2018 07.01.2019 NONE APPEARED ON BEHAL F OF ASSESSEE. 3. ON PERUSAL OF THE RECORD AS REFLECTED ABOVE THE REGISTRY, ITAT KOLKATA BENCHES ISSUED MANY NOTICES AND SOME NOTICE S WERE RETURNED UNSERVED, LATEST NOTICE ISSUED ON 05.12.2018 BY INT IMATING THE ASSESSEE DATE FIXATION OF DATE OF HEARING ON 07.01. 2019 I.E. TODAY WAS ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 3 RETURNED UNSERVED AS NIL ENDORSEMENT. IT IS NOTED T HAT THE SAID NOTICES WAS ISSUED AT THE SAME ADDRESS GIVEN BY THE ASSESSE E BEFORE TWO AUTHORITIES BELOW I.E. C/O, MODERN LATEX (I) LTD., 4, FAIRLIE PLACE, KOLKATA-700001. THEREFORE IT IS CLEAR THAT THE NOT ICES HAVE BEEN ISSUED AT THE ADDRESS OFFERED BY THE ASSESSEE AND THE ASSESSEE IS VERY MUCH IN THE KNOWLEDGE OF PROCEEDINGS BEFORE TH IS TRIBUNAL AND WE HOLD THE NOTICES WERE PROPERLY SERVED ON ASSESSE E. THE RESPONDENT ASSESSEE CALLED ABSENT AND THEREFORE THE ASSESSEE I S SET EX PARTE. WE PROCEEDED TO HEAR THE LD. DR FOR APPELLANT REVENUE. 4. THE APPELLANT REVENUE RAISED FOLLOWING GROUNDS W HICH ARE READ AS UNDER: I) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,82,97,057/- MADE O N THE BASIS OF ENTRIES APPEARING IN SEIZED DOCUMENT YK/4,WHICH WAS ADMITTED BY THE AS SESSEE AS HIS UNDISCLOSED INCOME BUT WAS SUBSEQUENTLY RETRACTED. II) THAT IN FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE ENTRIES APPEARING IN SEIZED DOCUMEN T YKL4 PERTAIN TO M/S.DHAN DAULAT HOLDINGS LTD, WITHOUT APPRECIATING THAT AS PE R PROVISIONS OF SECTION 292C OF THE ACT THE DOCUMENT BELONGED TO THE ASSESSEE AS IT W AS FOUND FROM HIS POSSESSION DURING SEARCH AND THE ASSESSEE HAS FAILED TO BRING A NY EVIDENCE ON RECORD TO ESTABLISH THAT ALL THE ENTRIES INCLUDING 'PAKKA' AN D 'KACHCHA' ENTRIES AS APPEARING THEREIN PERTAINED TO THE SAID M/S DHAN DAULAT HOLDIN GS LTD. III) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD.CIT(A) HAS ERRED IN HOLDING THAT 'KACHCHA' RECEIPT APPEARING I N SEIZED DOCUMENT YK/4 PERTAINED TO M/S DHAN DAULAT HOLDING LTD, WHILE HOLDING THAT TH E ASSESSEE HAD INVESTED UNACCOUNTED CASH OF RS.38,26,500/-IN THE REAL ESTATE PROJECTS OF M/S DHAN DAULAT HOLDING LTD, AS APPEARING IN THE SEIZED DOCUMENTS AND WITHOUT APPRECIATING THAT THE UNACCOUNTED (KACHCHA) RECEIPTS WERE GENERATED OUT OF UNACCOUNTED EXPENSES MADE BY THE ASSESSEE. IV) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT (A) HAS ERRED IN HOLDING THAT, 'KACHCHA' RECEIPTS BELONGS TO M S DHAN DAULAT HOLDING LTD WITHOUT CONSIDERING THAT UNACCOUNTED RECEIPTS OUT OF THE PROJECTS OF THE COMPANY ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 4 WAS APPROPRIATED BY THE ASSESSEE WHO WAS A DIRECTOR THEREIN AND THE ASSESSEE HAD SUO MOTTO AND VOLUNTARILY DISCLOSED THE DIFFERENCE OF UN DISCLOSED RECEIPTS AND UNDISCLOSED EXPENDITURE, AS HIS INCOME. V)THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT (A) HAS ERRED IN HOLDING THAT RETRACTION OF DISCLOSURE OF INCOME, WHI CH WAS MADE SUO-MOTTO BY THE ASSESSEE ON THE BASIS OF ENTRIES APPEARING THE SEIZED DOCUMENT YK/4, WAS CORRECT. VI) ALTERNATIVELY, THAT IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN LAW THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,8 2,97,057/- IN THE HANDS OF THE ASSESSEE IN RESPECT OF KACHCHA RECEIPTS APPEARING IN YK/4 WITHOUT GIVING A DIRECTION THAT THIS INCOME SHOULD BE ASSESSED IN THE HANDS OF M/S DHAN DAULAT HOLDINGS LTD. VII) THAT THE DEPARTMENTAL CRAVES LEAVE TO ADD, MOD IFY OR ALTER ANY OF THE GROUND(S) OF APPEAL AND/OR ADDUCE ADDITIONAL EVIDENCE AT THE TIM E OF HEARING OF THE CASE. 5. THE ASSESSEE RAISED AS MANY GROUNDS AS ARE CHALL ENGING THAT THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION O N ACCOUNT OF ENTRIES MADE IN SEIZED DOCUMENTS YK/4, ON ACCOUNT OF INVEST MENT OF UNACCOUNTED CASH. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF SUPPLYING RAW JUT E TO DIFFERENT JUTE MILLS. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 18.01.2006. DURING THE SEARCH AND SEIZURE OPERATION CERTAIN DOCUMENTS WERE SEIZED. AC CORDING TO THE ASSESSING OFFICER THE ASSESSEE DISCLOSED INCOME OF RS. 2,83,00,000/- AND TREATING THE SAME AS UNDISCLOSED INCOME BASING ON THE SEIZED DOCUMENTS, ADDED THE SAID AMOUNT TO THE TOTAL INCOM E OF THE ASSESSEE VIDE HIS ORDER DATED 31.12.2007. ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 5 7. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESS ING OFFICER IN TREATING THE DISCLOSED INCOME AND UNDISCLOSED INCOM E BEFORE THE CIT(A). THE CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , THE ASSESSMENT ORDER AND DOCUMENTS FILED BEFORE HIM HEL D THAT THE RESPONDENT ASSESSEE IS AN INVESTOR OF UNACCOUNTED C ASH IN THE PROJECTS OF M/S DHAN DAULAT HOLDINGS LTD. AND DIRECTED THE A SSESSING OFFICER TO REDUCE UNACCOUNTED INCOME OF RESPONDENT ASSESSEE TO RS. 38, 26,500/- DELETED THE REMAINING AMOUNT OF RS. 24,479 ,557/- (2,82,97,057 38,26,500). THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW: THEREFORE, I FIND THAT FOR THE BENEFIT ACQUIRED BY T HE COMPANY M/S DHAN DAULAT HOLDINGS LTD. IN PURCHASE OF LAND AND CONSTRUCTION OF BUILDING ON SUCH LANDS, ON ACCOUNT OF PAYMENT OF UNACCOUNTED CASH, SHOULD BE TAXE D IN THE HANDS OF THE COMPANY AND TO THAT EXTENT THE CONTENTION OF APPELLANT IS ACCEPTABLE. IN THE SEIZED DOCUMENTS, AS REFERRED ABOVE, THERE IS AN ANOMALY IN RESPECT OF INCOMINGS UNDER THE HEAD 'KACHCHA' AND 'PAKKAA' TAKEN SEPARATELY AND TH E OUTGOINGS TAKEN SEPARATELY UNDER SUCH HEADS. IF THE INCOMINGS AND OUTGOINGS MEN TIONED IN 'KACHCHA' AND 'PAKKAA' ARE CONSIDERED SEPARATELY THEN IT IS FOUND THAT OUTGOINGS IN 'PAKKA' FAR EXCEED THE INCOMING IN 'PAKKA' AND THE OUTGOINGS IN 'KACHCHA' ARE FAR LESS THAN THE INCOMING IN 'KACHCHA'. THEREFORE, THERE IS AN OBVIOUS INFERENCE THAT SOMEWHERE IN BETWEEN THE 'KACHCHA' INCOMING MAINLY ON ACCOUNT OF R ECEIPT OF ADVANCE FROM FLAT OWNERS OF THE 70 DH HARBOUR PROJECT, HAS BEEN CONVER TED INTO 'PAKKA' TO BE APPLIED IN 'PAKKA' OUTGOINGS OF MAINLY PURCHASE OF LAND AND C ONSTRUCTION OF BUILDING, BY THE DEVELOPER M/S DHAN DAULAT HOLDINGS LTD. SUCH CONVERS ION MAY TAKE PLACE THROUGH CASH CREDITS IN THE COMPANY THROUGH INTRODUCTION OF S HARE CAPITAL OR SHARE APPLICATION MONEY OR UNSECURED LOANS OR CURRENT LIABILITIES. IN A NY CASE, THIS ISSUE IS AGAIN IN THE DOMAIN OF ASSESSMENT OF INCOME M/S DHAN DAULAT HOLDINGS LTD AND NOT IN THE ASSESSMENT OF INCOME OF APPELLANT. ASSESSING OFFICER DID NOT REPORT SPECIFICALLY WHETHER THE BOOKS OF ACCOUNT OF M/S DHAN DAULAT HOLDINGS LTD ACCOUNTED FOR ONLY THE 'PAKKA' RECEIPTS FROM THE FLAT OWNERS OF 70 DH HA RBOR PROJECT AS MENTIONED IN PAGE 11 & 12 OF YK-4 OR THE COMPANY M/S DHAN DAULAT H OLDINGS LTD INCORPORATED ALL THE RECEIPTS MENTIONED IN THESE SEIZED PAGES IN ITS ACCOUNTS OF FINANCIAL YEAR 2005- 06 BEFORE FILING THE RETURN OF INCOME FOR THE ASSESSME NT YEAR 2006-07 AFTER THE SEARCH WAS CARRIED OUT ON 18.01.2006. ASSESSING OFFI CER REPORTED SPECIFICALLY ONLY IN RESPECT OF 'PAKKA' OUTGOING OF PAGE-11 & 12 OF YK-4 REFLECTED IN PURCHASE OF LAND AND CONSTRUCTION OF PROJECT IN BOOKS OF M/S DHAN DAUL AT HOLDINGS LTD AND THEREFORE THIS COMPANY MAY BENEFIT TO THE EXTENT OF RS. 2,07,5 8,082 ON ACCOUNT OF 'KACHCHA' EXPENDITURE AS ALREADY MENTIONED ABOVE. HOWEVER, WHAT DIRECTLY CONCERNS THE APPELLANT IS THE UNACCOUNTED CASH A LIED OR INVESTED BY THE APPELLANT IN THE PROJECTS ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 6 OF M/S DHAN DAULAT HOLDINGS LTD. THE PAGE-12 OF THE SEIZED PAPER YK-4 CLEARLY SHOWS THAT APPELLANT, P.K.J., IE, PRADEEP KUMAR JHAW AR HAS APPLIED OR INVESTED UNACCOUNTED CASH OF RS. 38,26,500/- IN THE REAL ESTA TE PROJECTS OF M/S DHAN DAULAT HOLDINGS LTD AND THEREFORE I FIND THAT TO THIS EXTENT THE SEIZED PAPERS DEFINITELY SHOW THE EXISTENCE OF UNACCOUNTED INCOME OF APPELLANT. I FIND THAT APPELLANT HAD MADE A DISCLOSURE OF INCOME VIDE A WRITTEN LETTER WHICH HE R ETRACTED VIDE AN AFFIDAVIT LATER ON. THE FACTS AS APPEARING FROM THE SEIZED PAPERS SHOW THAT THE APPELLANT WAS NOT THE BENEFICIARY OF THE CASH RECEIPTS ON ACCOUNT OF AD VANCE RECEIVED IN CASH FROM THE FLAT OWNERS OF 70 DH HARBOUR ROAD PROJECT. MOREOVER , THERE IS NO SUCH LARGE SEIZURE OF CASH OR ANY OTHER .ASSET SUCH AS JEWELLERY OR OTHER INVESTMENT OF APPELLANT WHICH COULD SHOW THAT APPELLANT WAS A BENEFICIARY TO SUCH E XTENT. AT BEST, APPELLANT WAS AN INVESTOR OF UNACCOUNTED CASH IN THE PROJECTS OF THE C OMPANY M/S DHAN DAULAT HOLDINGS LTD AND THE BENEFICIARY OF SUCH CASH RECEIP TS OR UNACCOUNTED EXPENDITURE IN PURCHASE OF LAND AND EXPENDITURE IN CONSTRUCTION WAS T HE COMPANY M/S DHAN DAULAT HOLDINGS LTD. THEREFORE, RETRACTION OF THE INCOME OF AB OUT RS. 2.83 CRORE, WHICH WAS DISCLOSED BY APPELLANT ON BEHALF OF OTHER PERSON UND ER THE STATE OF DEPRESSION, AS CERTIFIED BY A DOCTOR, CANNOT BE HELD TO BE ENTIRELY I NCORRECT. I THEREFORE DIRECT THE ASSESSING OFFICER TO REDUCE THE UNACCOUNTED INCOME OF APPELLANT TO RS.38,26,500/- ,I.E., TO THE EXTENT IT REPRESENTS UNACCOUNTED CASH EMPLOYED BY APPELLANT AS ON 30.11.2005 IN THE REAL ESTATE PROJECTS OF M/S DHAN DAULAT HOLDINGS LTD AS APPARENT FROM PAGE-12 OF SEIZED DOCUMENT YK-4. 8. HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILA BLE ON RECORD. IT IS NOTED FROM THE IMPUGNED ORDER THE CIT(A) EXAMINED THE SEIZED DOCUMENTS I.E. YK/4 IN RESPECT OF PAKKA OUTGOING RE LATING TO PURCHASE OF LAND AND CONSTRUCTION AND HELD THE ASSESSEE IS N OT THE BENEFICIARY TO THE EXTENT OF RS. 2,07,58,082/- ON ACCOUNT OF KACCH A EXPENDITURE AS FOUND IN THE BOOKS OF M/S DHAN DAULAT HOLDINGS LTD. FURTHER HE HELD THAT THE RESPONDENT ASSESSEE HAS APPLIED UNACCOUNTE D CASH OF RS. 38,26,500/- AS INVESTMENTS IN THE REAL ESTATE PROJ ECTS OF M/S DHAN DAULAT HOLDINGS LTD. THEREBY THE CIT(A) DIRECTED THE ASSESSING OFFICER TO REDUCE THE SAID AMOUNT FROM THE ENTIRE A DDITION. IN THE PRESENT CASE, IN OUR OPINION THE RESPONDENT ASSESS EE HAS GOT SUBSTANTIAL RELIEF FROM THE CIT(A) AND IN ORDER T O CONFIRM THE SAME THE ASSESSEE SHOULD COME ON RECORD BY FILING SUCH E VIDENCES ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 7 SUPPORTING THE VIEW OF THE LD. CIT(A). IT IS NEEDLE SS TO SAY THAT IT IS THE RESPONSIBILITY AND ONUS IS ON THE RESPONDENT AS SESSEE TO COME ON RECORD AND PRODUCE THE RELEVANT DOCUMENTS IN EVIDEN CE CONTENDING THE ACTION OF THE CIT(A) IS CORRECT. AS DISCUSSED ABO VE, THE REGISTRY OF ITAT KOLKATA BENCHES ISSUED AS MANY AS NOTICES UNDE R RPAD AT THE ADDRESS AVAILABLE ON RECORD TO THE ASSESSEE. HOWEVE R HAVING SOUGHT ADJOURNMENT BY THE AR THEN CLEARLY SHOWS THE RESP ONDENT ASSESSEE IS IN THE KNOWLEDGE OF EVERY DATE OF HEARING BEFORE THIS TRIBUNAL. THEREFORE HAVING CONSIDERING THE SAME WE ARE UNABLE TO CONFIRM THE VIEW TAKEN BY THE CIT(A) IN THE ABSENCE OF ANY EV IDENCE SUPPORTING SUCH VIEW. THUS, THE ORDER OF CIT(A) IS SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-01-2019. SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 18-01-2019 SB,SR. PS COPIES TO : (1) APPELLANT/DEPARTMENT: DCIT, CENTRAL CIRCLE-XXI, KOLKATA (2) RESPONDENT/ASSESSEE: SHRI PRADEEP KUMAR JHAWAR ITA NO. 779/KOL/2011 SHRI PRADEEP KUMAR JHAWAR 8 (3)COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA