ACIT, Jaipur V. ROOP CHAND MAHESHWARI, Jaipur

ITA 873/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99594 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Tax effect
• Section: 143(3); 153A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 873/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. ROOP CHAND MAHESHWARI, C-21, CHOMU HOUSE, SARDAR PATEL MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ADAPM 3668 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLEE AGARWAL (CIT) ADJ. APPLICATION REJECTED. FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/12/2015 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/12/2015 VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING OUT OF AGAINST THE ORDER DATED 14/10/2014 OF THE LEARNED C.I.T.(A), CENTRAL, JAIPUR FOR A.Y. 2007-08. THE EFFECTIVE GROUNDS OF APPEAL ARE REPRODUCED AS UN DER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN THE LAW, THE ORDER OF THE LD CIT(A)(C), 2 ITA NO. 873/JP/2014 ACIT VS ROOP CHAND MAHESHWARI JAIPUR IS JUSTIFIED IN DENYING REJECTION OF BOOKS O F ACCOUNT BY INVOKING PROVISIONS U/S 145(3) OF THE AC T. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE ORDER OF THE LD CIT(A)(C), JAIPUR IS JUSTIFIED IN DELETING TRADING ADDITION OF RS. 15,00,000/- MADE BY THE A.O. AFTER REJECTING BOOKS OF ACCOUNTS. 2. BOTH THE GROUNDS OF THE REVENUES APPEAL ARE AGA INST NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 145(3) OF THE IN COME TAX ACT, 1961 (IN SHORT THE ACT) AND DELETING THE TRADING ADDITION OF RS. 15.00 LACS MADE BY THE ASSESSING OFFICER. THE ASSESSEE DERIVED INCOME F ROM BUSINESS OF ADVERTISEMENT MAKING AND PUBLICITY WORK IN PROPRIETO RY CONCERN M/S N.S. PUBLICITY. HE FILED HIS RETURN ON 31/10/2007 DECLA RING TOTAL INCOME OF RS. 55,84,450/-. THE CASE WAS SCRUTINIZED U/S 153A READ WI TH SECTION 143(3) OF THE ACT. THERE WAS A SEARCH AND SEIZURE OPERATION CON DUCTED BY THE DEPARTMENT ON 06/08/2008 IN THE CASE OF SHAKUN GR OUP OF JAIPUR TO WHICH THE ASSESSEE BELONGS. VARIOUS ASSETS/BOOKS OF ACCOU NT AND DOCUMENTS WERE FOUND AND SEIZED AS PER ANNEXURE PREPARED DURING TH E COURSE OF SEARCH. ACCORDINGLY, NOTICE U/S 153A WAS ISSUED ON 30/01/20 09 FOR ASSESSMENT YEAR 2003-04 TO 2008-09. THE ASSESSEE IN THIS COMPLIANCE, FILED RETURN DECLARING INCOME OF RS. 55,84,450/- ON 30/03/2009. THE LD ASSE SSING OFFICER EXAMINED THE BOOK RESULT FROM A.Y. 2005-06 TO 2007-08. THE LD ASSESSING OFFICER ASKED 3 ITA NO. 873/JP/2014 ACIT VS ROOP CHAND MAHESHWARI TO GIVE THE DETAILS OF EXPENSES DEBITED IN THE P&L ACCOUNT, WHICH WAS FURNISHED AND ALSO PRODUCED THE RELEVANT RECORD FOR EXAMINATION OF ASSESSING OFFICER. THE ASSESSING OFFICER HELD THAT THE ASSESSE E HAS NOT MAINTAINED STOCK REGISTER AS PER ALL THE ITEMS AND SITEWISE. SO ME OF THE PAYMENTS WERE NOT FOUND JUSTIFIABLE WITH REFERENCE TO SERVICE REND ERED. THE PURCHASES WERE MADE ON SELF MADE VOUCHERS. ON THE BASIS OF THESE D ISCREPANCIES, THE LD ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. DURING THE COURSE OF SEARCH, STATEMENT OF SHRI BALLABH DAS MAHESHWARI WAS RECORDED U/S 132(4) OF THE ACT ON 07/08/2008, WHO H AD ADMITTED INFLATED EXPENDITURE IN THEIR CONCERNED NAMELY M/S SHAKUN AD VERTISING PVT. LTD., M/S N.S. PUBLICITY AGENCY, M/S S.G.M. COMMUNICATION AND M/S LEAD ETC.. THE STATEMENT RECORDED HAS BEEN REPRODUCED BY THE ASSES SING OFFICER AT PAGE NO. 4 AND 5 OF THE ASSESSMENT ORDER. THE GROUP HAS D ISCLOSED RS. 9 CRORES AS UNDISCLOSED INCOME DURING THE COURSE OF SEARCH. THEREFORE, HE REJECTED THE BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. HE FURT HER RELIED ON THE FOLLOWING CASE LAWS:- (I) LACHMINARAYAN MADAN LAL VS. CIT 86 ITR 436 (SC). (II) SWADESHI COTTON MILLS CO. LTD. VS. CIT (1967) 6 3 ITR 57 (SC). 4 ITA NO. 873/JP/2014 ACIT VS ROOP CHAND MAHESHWARI (III) ASSAM PESTICIDE AND AGRO CHEMICALS VS. CIT 22 7 ITR 846 (GAU). THEREFORE HE ESTIMATED THE INCOME AND DISALLOWED THE EXPENSES CLAIMED AT RS. 15 LACS. HE FURTHER REFERRED THE SEIZED MATERIA L ON PAGE NO. 7 OF THE ASSESSMENT ORDER AND TOTAL AMOUNT OF EXPENDITURE AS CALCULATED AT RS. 3,30,28,806/-. THIS DISALLOWANCE HAS BEEN MADE AS DIS CLOSURE MADE DURING THE COURSE OF SURVEY BY SHRI BALLABH DAS MAHESHWARI AT RS. 25 LACS ON ACCOUNT OF UNACCOUNTED INVESTMENT IN HOUSE PROPERTY , THEREFORE, HE MADE ADDITION OF RS. 15 LACS IN THE INCOME OF THE ASSESS EE. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DELE TED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAS NOT SURRENDERED ANY AMOUNT DURING THE COURSE OF SEARCH ON ACCOUNT OF INFLATED EXPENDITURE . THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANY EVIDENCE FOUND DURING THE SEARCH OR FOUND SUBSEQUENTLY DURING ANY INQUIRY CONDUCTED BY HIM, WH ICH SHOWS THAT THE ASSESSEE HAD INFLATED EXPENSES. SHE ALSO REMANDED C ERTAIN VERIFICATION TO THE ASSESSING OFFICER REGARDING PAYMENTS MADE, WHICH WAS SUBMITTED BY THE ASSESSING OFFICER AND HE ACCEPTED THE PAYMENT AS GE NUINE. ACCORDINGLY SHE HELD NOT JUSTIFYING THE INVOCATION OF PROVISIONS OF SECTION 145(3) OF THE ACT. 5 ITA NO. 873/JP/2014 ACIT VS ROOP CHAND MAHESHWARI THE ASSESSEES NP RATE HAS BEEN IMPROVED COMPARED TO PRECEDING YEAR ON IMPROVED TURNOVER, THEREFORE, SHE DELETED THE ADDIT ION OF RS. 15 LACS. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD CIT DR HAS SOUGHT ADJOURNMENT, WHICH WAS REJECTED. FROM THE SIDE OF ASS ESSEE, NO ONE HAS APPEARED. THE CASE WAS HEARD ON THE BASIS OF LATEST C IRCULAR ISSUED BY THE CBDT BEING CIRCULAR NO.21 OF 2015 DATED 10.12.2015(F NO. 279/MISC. 142/2007-ITJ(PT). ACCORDING TO THIS CIRCU LAR, THE MONETARY LIMIT FOR FILING THE REVENUES APPEAL HAS BEEN INCREASED FROM 4.00 LACS TO 10.00 LACS. THE TOTAL ADDITION WA S RS. 15 LACS, THE TAX EFFECT IS LESS THAN 10 LACS, THEREFORE, THE CASE WAS HEARD BY THE BENCH. 5. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD . AS PER CIRCULAR NO.21 OF 2015 DATED 10.12.2015(F NO. 279/MISC. 142/ 2007- ITJ(PT)., THE TAX EFFECT HAS BEEN PRESCRIBED BY THE CBDT FOR FILING OF REVENUES APPEAL NOT EXCEEDING THE MONETARY LIMI T OF RS. 10 LACS. WE HAVE VERIFIED THAT ON TOTAL ADDITION OF RS . 15 LACS, TAX EFFECT IS NOT EXCEEDING RS. 10 LACS, THEREFORE, CBD T CIRCULAR IS SQUARELY APPLICABLE. AS PER THIS CIRCULAR, THE REVE NUE HAS BEEN DIRECTED BY THE CDBT EITHER REVENUE WITHDRAW THE AP PEAL OR NOT 6 ITA NO. 873/JP/2014 ACIT VS ROOP CHAND MAHESHWARI PRESSED BEFORE THE APPELLATE AUTHORITY AND THIS CIR CULAR WAS RETROSPECTIVE IS APPLICABLE ON PENDING APPEAL ALSO. THEREFORE, WE DISMISS THE REVENUES APPEAL ON THE BASIS OF NEW CB DT CIRCULAR. 6. IN THE RESULT, THE REVENUES APPEAL IS NOT MAINT AINABLE AND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/12/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 TH DECEMBER, 2015. RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-2, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI ROOP CHAND MAHESHWARI, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 873/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR