Anant Technocrats Pvt. Ltd., Nashik V. Income-tax Officer,

ITA 852/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1010 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 28-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Business income; Search and seizure

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NOS.852 TO 854/PN/2016 % % / ASSESSMENT YEARS : 2006-07 TO 2008-09 ANANT TECHNOCRATS PVT. LTD., G-3, CROWN COMMERCIAL COMPLEX, OPP. RAJIV GANDHI BHAVAN, SHARANPUR ROAD, NASHIK 422 002 PAN : AACCA8702C . / APPELLANT V/S ITO, CENTRAL - I, NASHIK . / RESPONDENT / APPELLANT BY : NONE (WRITTEN SUBMISSION) / RESPONDENT BY : SHRI S.K. RASTOGI, CIT / ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 10-02-2016 OF THE CIT(A)-12, P UNE RELATING TO THE ASSESSMENT YEARS 2006-07 TO 2008-09 RESPECTIVELY . SINCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ALL THESE APPEA LS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISP OSED OF BY THIS COMMON ORDER. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, A WRITTEN SUBMISSION HAS BEEN FILED. THEREFORE, THESE APPEALS ARE BEI NG DECIDED / DATE OF HEARING :09.08.2016 / DATE OF PRONOUNCEMENT:31.08.2016 2 ITA NOS.852 TO 854/PN/2016 ON THE BASIS OF THE WRITTEN SUBMISSION FILED AND AFTER HEARI NG THE LD. DEPARTMENTAL REPRESENTATIVE. 3. FIRST WE TAKE UP ITA NO.852/PN/2016 FOR A.Y. 2006-07 AS THE LEAD CASE. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE BUSINESS O F ARCHITECTURAL CONSULTANCY PROVIDING ENGINEERING AND ARCHITE CTURAL SERVICES AND CARRYING ON BUSINESS. THE ORIGINAL RETURN WAS FILED U/S.139 ON 24-09-2007 SHOWING TOTAL INCOME OF RS.74,720/- . A SEARCH AND SEIZURE ACTION U/S.132 OF THE I.T. ACT WAS CO NDUCTED IN THE SUYOJIT GROUP OF CASES ON 17-09-2010. THE ASSESSEE BE LONGS TO THE SAME GROUP. IN RESPONSE TO NOTICE U/S.153A OF THE ACT ISSUED ON 10- 01-2012 THE ASSESSEE FILED ITS RETURN OF INCOME ON 12-03- 2012 DECLARING TOTAL INCOME OF RS.74,720/-. 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT A RED EXECUTIVE DIARY WAS FOUND AT THE RESIDENTIAL P REMISES OF SHRI ANANT KESHAV RAJEGAONKAR DURING THE COURSE OF SEA RCH WHICH IS PLACED AT ANNEXURE A8 OF THE PANCHNAMA. HE OBSERVED T HAT THE FOLLOWING ENTRIES WERE FOUND IN THE NAME OF THE ASSESSEE COMPANY : SR. NO. PAGE NO. OF DIARY DA TE AMOUNT 1 10 BACKSIDE 12 - 01 - 2006 10,000 2 11 BACKSIDE 06 - 02 - 2006 40,000 3 11 BACKSIDE 14 - 03 - 2006 2,00,000 4 11 28 - 01 - 2006 7,000 4. THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED TH E ABOVE MENTIONED AMOUNTS. HOWEVER, THE SAID AMOUNTS ARE NOT R EFLECTED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. HE THER EFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHETHER THESE TRANSACTIONS A RE RECORDED IN 3 ITA NOS.852 TO 854/PN/2016 THE REGULAR BOOKS OF THE ASSESSEE COMPANY. IT WAS REPL IED BY THE ASSESSEE THAT THESE ENTRIES ARE ONLY A MEMORANDUM AN D THE AMOUNT SHOWING IN THE ENTRIES IS TAKEN BY THE OFFICE STAFF OF ASSE SSEE FROM THE RESIDENCE OF SHRI ANANT RAJEGAONKAR WHO IS ONE OF THE D IRECTORS IN THE ASSESSEE COMPANY AND SOME AMOUNT IS USED BY SHRI ANAN T RAJEGAONKAR FOR BUSINESS TRIP. THE ASSESSEE FILED AFFIDAVIT OF RESPECTIVE PERSONS AND LEDGER ACCOUNT OF CASH BOOK ON THE DATE O F NOTINGS IN THE DIARY FOR THE RELEVANT PERIOD. 5. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ABOVE EXPLA NATION OF THE ASSESSEE. HE OBSERVED THAT IT IS ONLY A DEFENSE FOR NAME SAKE AS IT IS FALSE, INCORRECT AND DEVOID OF ANY SUBSTANCE. HE FURTHER OBSERVED THAT WHILE RECORDING THE STATEMENT ON OATH U/S.131 OF TH E I.T. ACT OF SHRI ANANT RAJEGAONKAR ON 09-11-2010 HAS ACCEPTED TH AT MOST OF THE TRANSACTIONS IN THE DIARY ARE UNDISCLOSED RECEIPTS AND EX PENDITURES. THUS, ADMITTED FACT NEED NOT BE PROVED. HE OBSERVED TH AT THE LEGAL PRINCIPLE IS THAT PROOF IS NOT AT ALL REQUIRED WHEN THERE IS ADMISSION. IN VIEW OF THE ABOVE, THE AO HELD THAT THE ASSESSEE HAS RECEIVED THE AMOUNT OF RS.2,57,000/- WHICH IS NOT REFLECTED IN REGULAR BOO KS OF ACCOUNT OF THE ASSESSEE. HE, THEREFORE, MADE ADDITION OF RS.2,57,000/- BEING UNACCOUNTED RECEIPTS OF THE ASSESSEE. 6. SIMILAR ADDITION OF RS.3,70,000/- HAS BEEN MADE BY THE AO FOR A.Y. 2007-08 AND RS.20,000/- IN A.Y. 2008-09. 7. BEFORE CIT(A) IT WAS SUBMITTED THAT THE RED COLOUR DIAR Y WAS WRITTEN AND MAINTAINED BY MRS. JAYSHREE ANANT RAJEGAONK AR WHO WAS ALSO DIRECTOR OF THE COMPANY. THE SAID DIARY CONTAINED DE TAILS OF TRANSFER OF CASH TO AND FRO FROM THE ASSESSEE COMPANY FO R STAFF AND OTHER PARTIES AND ALSO INCLUDED DETAILS OF HOUSEHOLD EXPENS ES, 4 ITA NOS.852 TO 854/PN/2016 PERSONAL TRAVELLING EXPENSES, PETTY CASH EXPENSES, LABOUR PAYMENTS ETC. THE DIARY ALSO RECORDED AMOUNTS RECEIVED FROM VARIO US PARTIES IN THE NORMAL COURSE OF BUSINESS. IT WAS SUBMITTED THAT AS PER POLICY OF THE ASSESSEE COMPANY PART OF THE CASH IN HAND OF THE A SSESSEE COMPANY AS WELL AS M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. W AS KEPT AT THE RESIDENCE OF THE DIRECTOR FOR THE SAKE OF CONVENIENCE AND SAFETY. THEREAFTER ASSESSEE CONTENDED THAT ALL THE TRANSACTIONS RECORDED IN THE DIARY WERE DULY REFLECTED IN THE BOOKS OF ACCOUNT OF THE COMPANY AND NONE OF THE TRANSACTIONS WERE OUTSIDE THE BOOKS OF ACCO UNT. IT WAS CONTENDED THAT SHRI ANANT RAJEGAONKAR NEVER STATED T HAT MOST OF THE TRANSACTIONS IN THE DIARY WERE UNDISCLOSED RECEIPTS AND E XPENDITURE. NAME OF THE PERSONS WRITTEN ON THE DIARY WHO HAD RECEIV ED THE CASH WERE EMPLOYEES ACTING AS COURIER OF THE MONEY AND THE P AYMENTS WERE MADE FOR THE PURPOSE OF BUSINESS WHICH WERE RECORDED IN THE BOOKS OF THE ASSESSEE. CONFIRMATIONS OF THE COURIERS WERE ALSO FILE D. SINCE THE ASSESSEE DID NOT FILE COMPLETE STATEMENT OF SHRI ANANT RA JEGAONKAR RECORDED ON 09-11-2010 THE CIT(A) SPECIFICALLY ASKED THE ASSESSEE VIDE ORDER SHEET DATED 29-10-2015 TO FILE THE COPY OF T HE STATEMENT ON NEXT DATE OF HEARING 18-11-2015. HOWEVER, THE ASSES SEE NEITHER ATTENDED THE HEARING NOR FILED THE COPY OF THE STATEMENT. 8. THE CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION GIVEN B Y THE ASSESSEE AND UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 3.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISSION S FILED BY THE APPELLANT. APPELLANT HAS NOT BEEN CONSISTENT IN IT S EXPLANATION REGARDING CONTENTS OF THE DIARY. THE APPELLANT TOOK SHIFTING STANDS DURING THE SEARCH, ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDI NGS. AT THE TIME OF SEARCH, IT WAS STATED THAT TRANSACTIONS RELATED TO P AYMENTS GIVEN TO LABOUR, PERSONAL EXPENSES, DETAILS OF RECEIPTS PREVIOUSL Y OWNED BY THE DIRECTOR AND RELATIVES DEPOSIT AMOUNT WERE RECORDED. IT WAS ADMITTED THAT MOST OF THE UNDISCLOSED RECEIPTS AND BUSINESS TRANSACTIONS OF MR. BADGUJAR WERE RECORDED IN THE DIARY. LATER BEFORE THE AO, AP PELLANT SUBMITTED ENTRIES RECORDED WERE MONEY TAKEN BY OFFICE STAFF TO BE USED BY SHRI ANANT 5 ITA NOS.852 TO 854/PN/2016 RAJEGAONKAR FOR BUSINESS TRIP. FINALLY DURING THE COUR SE OF APPELLATE PROCEEDINGS, IT WAS CLAIMED THAT ALL TRANSACTIONS RECOR DED IN THE DIARY WERE THE PAYMENTS MADE TO THE EMPLOYEES OR OTHER PART IES WERE RELATED TO THE BUSINESS OF THE COMPANY AND RECORDED IN THE BOO KS OF ACCOUNTS OF THE COMPANY. THE APPELLANT NOWHERE MENTIONED AT THE TIME OF SEARCH THAT ENTRIES RECORDED IN THE DIARY WERE THE REGULAR BUSINE SS TRANSACTIONS APPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. ON THE CONTRARY IT WAS ADMITTED THAT MOST OF THE UNACCOUNTED TRANSACTIONS AND UNDISCLOSED RECEIPTS WERE RECORDED IN THE DIARY. APPELLANT LATER ON PREPARED THE CASH BOOK OF THE COMPANY AND TRIED TO LINK THAT PAYMENTS RECORDED IN THE DIARY WERE REGULAR TRANSACTIONS OF THE COMPANY. CASH BOOK SO PREPARED AFTER THE SEARCH IS NOT CREDIBLE AND THEREFORE I UPHOLD THE ADD ITION MADE BY AO OF RS.2,57,000/- BEING UNDISCLOSED BUSINESS RECEIPTS FOR THE YEAR UNDER CONSIDERATION. GROUND RAISED BY THE APPELLANT IS HEREB Y DISMISSED. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 10. IT HAS BEEN MENTIONED IN THE WRITTEN SUBMISSION THAT THE AO HAS MADE THE IMPUGNED ADDITION IN ALL THE CASES BASED ON THE SAME DIARY, I.E. ANNEXURE NO.A8 OF THE SEIZED RECORD AND IN RESPE CT OF VERY SIMILAR TRANSACTIONS IN RESPECT OF WHICH THE SPECIFIC FINDING IS RECORDED BY CIT(A) IN THE CASES OF M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. THE TRANSACTIONS OF WHICH THE AO HAS MADE ADDITION ARE MAINLY TRANSFER OF CASH OUT OF THE CASH ON HAND OF THE COMPANIES AS PER R ESPECTIVE AUDITED BOOKS OF ACCOUNT. THE ENTRIES MADE IN THE DIARY SHOWING THE CASH PAYMENTS MADE TO OFFICE STAFF OR ANY OTHER PERSONS WHO WERE IN FACT ONLY CARRIERS OF THE CASH BELONGING TO THE ASSESSEE COMPANY AS WELL AS M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. FROM THE RESID ENCE OF THE DIRECTORS TO THE OFFICES OF THE COMPANIES. IT HAS BEEN M ENTIONED IN THE WRITTEN SUBMISSION THAT WITHOUT PREJUDICE TO ABOVE, THE S OURCE OF PAYMENT IS NOT IN DISPUTE I.E. AMOUNT RECEIVED FROM BADGU JAR FAMILY, ETC. WHICH WAS SUBJECT MATTER OF ITA NO. 1683 TO 1685/2013. 11. IT HAS FURTHER BEEN MENTIONED THAT THE AO IS NOT JU STIFIED IN MAKING THE IMPUGNED ADDITION WHEN THE IMPUGNED TRANSACTIO NS ARE 6 ITA NOS.852 TO 854/PN/2016 NOT PAYMENTS TO OUTSIDERS. IT IS JUST GIVING MONEY OUT OF THE CASH ON HAND AS PER AUDITED BOOKS OF ACCOUNTS, TO STAFF OF THE AS SESSEE OR ASSOCIATE CONCERNS TO HAND OVER THE SAME TO OFFICE. THE EXTRACTS OF CASH BOOK SHOWING OPENING AND CLOSING BALANCE OF CASH ON HAND ON THE DATES WHEN CASH WAS CARRIED BY THE KNOWN PERSONS FROM THE RESIDENCE OF THE DIRECTOR OF THE ASSESSEE COMPANY AS W ELL AS M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. SHOWS PROOF OF AVAILABILITY OF CASH TO THAT EXTENT IN THE BOOKS OF M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 12. IT HAS FURTHER BEEN MENTIONED IN THE SAID WRITTEN SU BMISSION THAT THE FACTS OF THE IMPUGNED APPEALS ARE IDENTICAL TO T HE DECISION IN THE CASE OF MR. ANANT KESHAV RAJEGAONKAR AND M/S. SUYO JIT INFRASTRUCTURE PVT. LTD. WHERE THE ADDITIONS MADE BY T HE AO ON THE BASIS OF THE SAID RED DIARY WHICH WAS ANNEXED AS A8 TO T HE PANCHNAMA WERE DELETED BY THE APPELLATE AUTHORITIES. IT HAS BEEN MENTIONED THAT THE CONFIRMATIONS AS WELL AS AFFIDAVITS OF ALL T HE ABOVE PERSONS WHO HAVE TAKEN CASH FROM THE RESIDENCE OF THE ASSESSEE DESCRIBING THE FACT THAT THEY WERE JUST CARRIERS FOR THE CASH ARE PLACED IN THE PAPER BOOK. FURTHER, THE EVIDENCE OF CASH COMMEN T AS PER AUDITED BOOKS OF ACCOUNT ARE ALSO ENCLOSED IN THE PAPER BOOK. 13. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SI DES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE ORDE R OF THE TRIBUNAL IN THE CASE OF SHRI ANANT KESHAV RAJEGAONKAR. T HERE IS NO DISPUTE TO THE FACT THAT DURING THE COURSE OF SEARCH IN THE SUYOJIT GROUP OF CASES ON 17-09-2010 A RED DIARY WAS SEIZED AS PER ANNEXURE 7 ITA NOS.852 TO 854/PN/2016 A8 TO THE PANCHANAMA. IN THE SAID RED DIARY, IN THE BAC KSIDE OF PAGES 10 AND 11 AND ON PAGE 11, AN AMOUNT OF RS.2,57,00 0/- WAS MENTIONED AGAINST THE NAME OF THE ASSESSEE ON VARIOUS D ATES. SINCE THE ABOVE AMOUNTS WERE NOT REFLECTED IN THE BOOKS OF A CCOUNT OF THE ASSESSEE THE AO MADE ADDITION IN THE ORDER PASSED U/S.1 43(3) R.W.S.153A WHICH HAS BEEN UPHELD BY THE CIT(A). IT IS THE SUBMISSION OF THE ASSESSEE IN THE WRITTEN SUBMISSION THAT SIMILAR ADDIT ION WAS DELETED IN THE HANDS OF SHRI ANANT KESHAV RAJEGAONKAR B Y THE CIT(A) AND ON FURTHER APPEAL BY THE REVENUE THE TRIBUNAL HAS D ISMISSED THE APPEAL FILED BY THE ASSESSEE AND THEREFORE THIS ADDITION SH OULD ALSO BE DELETED. HOWEVER, WE DO NOT FIND ANY MERIT IN THE ABOVE SUBMISSION OF THE ASSESSEE. IN THE CASE OF SHRI ANANT KESHAV RAJEGA ONKAR THE SEIZED DOCUMENT CONTAINED CASH RECEIPTS ISSUED BY THE A SSESSEE TO MR. GULAB AND MRS. YOGITA BADGUJAR AMOUNTING TO RS.19 LAK HS. IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID AMOUNT WAS RECEIVED BY HIM IN HIS CAPACITY AS DIRECTOR OF SUJOYIT INFRASTRUCTURE P VT. LTD. ON BEHALF OF THE PARTNERSHIP FIRM M/S. SUYOJIT BAUG AS ADVANCE AGAINST SALE OF SHOPS L1 AND L2 IN THE PROPOSED PROJECT OF M/S. SUYOJIT BAUG. BEFORE THE TRIBUNAL THE ASSESSEE HAS PROVED THE EXISTE NCE OF THE PARTNERSHIP FIRM CALLED M/S. SUYOJIT BAUG WHICH WAS DISBELIEVE D BY THE AO ON THE GROUND THAT M/S. SUYOJIT BAUG DID NOT FILE ANY RETURN OF INCOME. UNDER THOSE CIRCUMSTANCES, THE TRIBUNAL HAD UPHE LD THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.19 LAKHS MADE IN THE HANDS OF THE ASSESSEE. HOWEVER, HERE THE FACTS ARE COM PLETELY DIFFERENT. AN AMOUNT OF RS.2,57,000/- HAS BEEN SHOWN AGAIN ST THE NAME OF THE ASSESSEE ON VARIOUS DATES WHICH HAS NOT BE EN DISCLOSED BY HIM. FURTHER, THE SAID DIARY WAS IN THE HAND-WRITING O F THE ASSESSEES WIFE. THEREFORE, THE DECISION OF THE TRIBUNAL IN T HE CASE OF 8 ITA NOS.852 TO 854/PN/2016 SHRI ANANT KESHAV RAJEGAONKAR RELIED ON BY THE ASSESSE E IN THE WRITTEN SUBMISSION IS OF NO USE. IN VIEW OF THE ABOVE DISC USSION AND IN VIEW OF THE DETAILED REASONINGS BY THE CIT(A) WE FIND NO IN FIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUN DS RAISED BY THE ASSESSEE ARE DISMISSED. 15. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ITA NOS. 856/PN/2016 AND 857/PN/2016 FOR A.YRS. 2007-08 AND 200 8-09 RESPECTIVELY. FACTS BEING SIMILAR, THEREFORE, FOLLOWING THE REA SONINGS GIVEN ABOVE, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 16. IN THE RESULT, ALL THE 3 APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31-08-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 31 ST AUGUST , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-12, PUNE 4. % S / THE CIT-12, PUNE 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , ( + //TRUE COPY// 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE