Sujit Kumar Thakur, Hyderabad V. DCIT, New Delhi

ITA 886/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5947 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 13-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Income from undisclosed sources; Search and seizure; Retraction; Revised return
• Section: 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI G BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA ACCOUNTANT MEMBER ITA NO. 886 /DEL/201 5 [ASSESSMENT YEAR: 20 12 - 13 ] SHRI SUJIT KUMAR THAKUR VS. THE D . C .I.T 7 - 1, 235/22, BALKAMPET CENTRAL CIRCLE 26 HYDERABAD NEW DELHI PAN : A BVPT 8412 B [APPELLANT] [RESPONDENT] DATE OF HEARING : 2 3 .0 5 .2018 DATE OF PRONOUNCEMENT : 2 5 .0 5 .2018 ASSESSEE BY : SHRI VED JAIN , ADV SHRI ASHISH GOEL, CA SHRI RIDHI KARAN AGGARWAL, ADV REVENUE BY : SHRI S.S RANA , CIT - DR ORDER PER N.K. BILLAIYA , ACCOUNTANT MEMBER, T HIS APPEAL FILED BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE CIT(A) - 29 , NEW DELHI DATED 09 . 0 1.201 5 PERTAINING TO A.Y 20 12 - 13 . 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER ERRED IN ASSESSING THE INCOME AT RS. 2.13 CRORES AS AGAINST THE INCOME OF RS. 63.11 LAKHS DECLARED BY THE ASSESSEE. IN DOING SO, THE ASSESSING OFFICER FAILED TO APPRECIATE THAT THE ALLEGED SURRENDER OF RS. 1.50 CRORE S WAS DEHORS ANY INCRIMINATING MATERIAL/ EVIDENCE INDICATING ANY SUCH UNDISCLOSED INCOME OF THE ASSESSEE AND WITHOUT APPREC IATING THE CONTENTS OF THE SURRENDER MADE BY THE ASSESSEE. 3. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. HAVING HEARD THE RIVAL CONTENTIONS, WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WITH THE ASSISTANCE OF THE LD. COU NSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 18(6) OF ITAT RULES AND HAVE ALSO PERUSED THE JUDICIAL DECISIONS RELIED UPON BY BOTH THE SIDES. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE TH AT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF HDPE/PP BAGS ETC. AND IS HAVING MANUFACTURING UNITS/UNDERTAKINGS LOCATED IN THE STATE OF ANDHRA PRADESH. ORIGINAL RETURN OF INCOME WAS FILED ON 28.09.2012 DECLARING INCO ME OF RS. 38,89,481/ - . A SEARCH AND 3 SEIZURE OPERATION U/S 132 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 20.01.2012. DURING THE COURSE OF SEARCH PROCEEDINGS, THE ASSESSEE SURRENDERED AN AMOUNT OF RS. 1.5 CRORES ON ACCOUNT OF INFLATED PURCHASES FOR THE PURPOSE OF COVERING OF EXPENSES OF SALES INCENTIVES @ RE. 1 PER BAG PAID TO PARTIES RELATED TO DALMIA CEMENT BHARAT LIMITED. 5. RELEVANT QUESTION ASKED DURING THE STATEMENT R ECORDED AT THE TIME OF SEARCH READS AS UNDER: QUESTION NO. 8 : WITH REGARDS TO THE BAGS SUPPLIED TO THE DALMIA CEMENT BHARAT LTD, HOW IS THE RATE PER BAG FIXED AND WHEN DO YOU RECEIVE THE PAYMENT FROM DALMIA CEMENT? ANSWER THE RATE OF EACH BAG SUPPLIED TO DALMIA CEMENTS IF FIXED BASED ON THE MARKET VALUE PLUS RS. L/ - EXTRA BASED ON THE BUSINESS TRANSACTIONS AND THE PURCHASE ORDER RAISED IN THIS BEHALF. THE PAYMENTS ARE MADE BY DALMIA CEMENTS INCLUDING THE EXTRA RS.L/ - AMOUNT IS WITHDRAWN AND GIVEN IN CASH TO MR. PODDAR, MD, MR. MOHAN KUMAR (MOB. NO.09381063420) OF PODDAR PIGMENTS PVT. LTD., 303, 3 RD FLOOR, ROSY TOWERS, NO.8, NH ROAD, NUNGAMBAKKAM, CHENNAI - 34. SOME TIMES THEIR 4 OFFICIALS COME TO HYDERABAD AND COLLECT THIS EXTRA AMOUNT CREDIT IN TO MY BANK ACCOUNT. THIS EXTRA AMOUNT IS WITHDRAWN AND HANDED OVER TO PODDAR/MOHAN KUMAR BY ME PERSONALLY. I HAVE PERSONALLY MET MOHAN KUMAR 3 - 4 TIMES AT CHENNAI IN PODDARS OFFICE FOR HANDING OVER THE CASH MEANT FOR DALMIA CEMENTS AND TH IS HAS ALSO BEEN AGREED BY MOHAN KUMAR HIMSELF WHEN I SPOKE TO HIM OVER THE PHONE. THE LAST I MET HIM WAS AROUND 4 - 5 MONTHS BACK IN PODDARS OFFICE. I CANNOT PRODUCE ANY EVIDENCE IN THIS REGARD. QUESTION NO. 12 DO YOU HAVE ANYTHING TO SAY? ANS WER SIR, I AGREE THAT THERE ARE SOME DISCREPANCIES IN MAINTAINING MY BOOKS OF ACCOUNT BE IT WITH REGARD TO PURCHASES OR WITH REGARD TO SCRAP SALES. IN ORDER TO PURCHASE PEACE WITH THE DEPARTMENT AND TO COVER UP THESE DISCREPANCIES I VOLUNTARILY ADMIT AND ADDIT IONAL INCOME OF RS.L.5 CR. APART FROM THE CASH SEIZED FROM MY PREMISES TODAY. I KINDLY REQUEST YOU NOT TO LEVY ANY PENAL PROCEEDINGS DUE TO THE ABOVE ADMISSION. I .WILL SUBMIT THE DETAILS OF ADMISSION ASSESSEE WISE ASSESSMENT YEAR WISE AND THE HEAD OF ADMI SSION IN COUPLE OF DAYS. 6. STATEMENT OF SHRI SUJIT THAKUR WAS ONCE AGAIN RECORDED ON 30.4.2012 AND 1.5.2012. THE SAME READ AS UNDER: 5 QUESTION NO. 2 DURING THE COURSE OF SEARCH AT YOUR RESIDENTIAL PREMISES 7 - 1 - 235/22 PRASHANT COLONY, BALKAMPET , HYDERABAD - 500016, YOU HAVE STATED UNDER OATH THAT THE RATE OF EACH BAG SUPPLIED TO DALMIA CEMENT IS FIXED BASED ON THE MARKET VALUE PLUS RS.L/ - EXTRA BASED ON THE BUSINESS TRANSACTIONS AND THE PURCHASD ORDER RAISED IN THIS BEHALF. THE PAYMENTS ARE MADE B Y DALMIA CEMENT INCLUDING THIS EXTRA RS.L? - THROUGH CHEQUE. AFTER RECEIVING THE MONEY THIS EXTRA RS.L/ - AMOUNT IS WITHDRAWN AND GIVEN IN CASH TO MR. PODDAR, MD, MR. MOHAN KUMAR (MOB. NO.09381063420) OF M/S PODDAR PIGMENTS PVT. LTD., 303, 3 RD FLOOR, ROSY TO WERS, NO.8 NH ROAD, NUNGAMBAKKAM, CHENNAI - 34. SOMETIMES THEIR OFFICIALS COME TO HYDERABAD AND COLLECT THIS EXTRA AMOUNT CREDIT IN TO MY ACCOUNT. THIS EXTRA AMOUNT IS WITHDRAWN AND HANDED OVER TO PODDAR/MOHAN KUMAR BY ME PERSONALLY. KINDLY CONFIRM THE SAME. ANS WER YES, I CONFIRM THE SAME THAT THE ABOVE STATEMENT IS GIVEN BY ME AND I STILL STAND BY MY OWN STATEMENT . 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER RAISED THE FOLLOWING QUERY AND THE ASSESSEE REPLIED ACCORDINGLY: 6 DURING THE COURSE OF SEARCH CONDUCTED U/S 132 ON 20.1.2012 IN YOUR STAT ED RECORDED U/S 132(4) OF THE INCOME TAX ACT, 1961, YOU HAVE ADMITTED THAT YOU WERE ENGAGED IN THE PRACTICES OF INFLATING THE PRICE OF CEMENT BAGS AND ALSO ADMITTED THAT THERE ARE SOME DISCREPANCIES IN MAINTAINING THE BOOKS OF ACCOUNTS AND DUE TO THIS YOU DISCLOSED INCOME TO THE TUNE OF RS.L.50 CRORES AS YOUR UNDISCLOSED INCOME. THIS WAS ALSO CONFIRMED BY YOU IN YOUR STATEMENT RECORDED ON 01.05.2012. PLEASE SHOW CAUSE AS TO WHY THE SAME AMOUNT OF RS.L.50 CRORES MAY NOT BE ADDED IN YOUR INCOME FOR THE PERIOD RELEVANT TO ASSESSMENT YEAR 2012 - 13 AS YOUR INCOME FROM UNDISCLOSED SOURCES. IN RESPONSE TO THE SAID SHOW CAUSE THE ASSESSEE FILED REPLY ON 18.3.2012 THE EXTRACT OF THE SAME IS REPR ODUCED AS UNDER: YES. I DID ADMI T THAT 1 WAS OVER INVOICING M/S . DALMIA CEMENT BHARAT LTD., FOR THE PP WOVEN SACKS I HAD SUPPLIED IN THE F.Y. 2010 - 11 AND 2011 - 12. I HAVE ACCEPTED THAT RS. L/ - PER BAG WAS OVER INVOICED AND NOT RS.L.50 AS MENTIONED IN YOUR ABOVE LETTER L AM ENCLOSING THE COPIES OF THE INVOICES RAISED BY ME ON M/S DALMIA CEMENT BHARAT LTD. 1 AM ALSO ENCLOSING THE FEW OF THE INVOICES RAISED TO OTHER CUSTOMERS WITH SAME OR MORE OR LESS SAME SPECIFICATION. THE PRICE OF BAG VARIES DEPENDING ON TH E SIZE, WEIGHT PRINTING, COLOUR AND THE TOTAL QUANTITY OF THE 7 ORDER ETC. SO IT IS VERY DIFFICULT TO COMPARE THE PRICES WE OFFER TO ONE PARTY WITH THE OTHER. 7. DURING THE COURSE OF SEARCH, AT ONE STAGE, THE SEARCH PARTY IN SISTED THAT I SHOULD SURRENDER THE AMOUNT OF CASH I HAVE RETURNED TO M/S DALMIA CEMENT (BHARAT) LTD. AS UNDISCLOSED INCOME. AS I DID NOT HAVE THE CORRECT FIGURES OF THE SALES MADE TO M/S DALMIA CEMENT (BHARAT) LTD. READILY AT THAT TIME, I TOLD THE SEARCH P ARTY THAT IT WAS DIFFICULT FOR ME TO WORK OUT HOW MUCH CASH I HAVE RETURNED TO THEM. THEN THEY SUGGESTED THAT IF I SURRENDER RS.150 LACS, THEY WOULD STOP FURTHER SEARCH OPERATIONS AND GO AWAY. THOUGH I HAVE PLEADED THAT EXCEPT THE RETURN OF RE. 1 PER BAG B ACK TO MR. PODDAR (MOHAN KUMAR OF M/S PODDAR PIGMENTS PVT. LTD, 303, LOSI TOWER, NUNGUMBUKKAM, CHENNAI) ON BEHALF OF DALMIA CEMENT (BHARAT) LTD I HAD NOT DONE ANYTHING WRONG IN MY BUSINESS. STILL THEY FORCED ME TO DISCLOSE RS.150 LACS AS OTHER INCOME AND P UTTING ME UNDER TREMENDOUS MENTAL PRESSURE BEFORE MY FAMILY LADIES. THEY THREATENED THAT UNLESS I SURRENDERED, THEY WOULD IMPOSE ALL SORTS OF PENALTIES AND TOLD ME THAT GOD ONLY CAN SAVE ME 1 WAS TOTALLY SHAKEN AND GOT FRIGHTENED AND I WAS ABOUT TO BURST I NTO TEARS. UNDER PRESSURE I WAS FORCED TO SIGN THE DECLARATION OF SURRENDER. LATER ON 01.05.2012,1 WAS CALLED TO NEW DELHI, INVESTIGATION CELL AND A STATEMENT WAS RECORDED BY DR. VIKRAM SINGH - SHARMA, ADIT , UNIT - VI (I) , WHERE I WAS ASKED TO EXPLAIN FOR 8 WHICH ASSESSMENT YEAR AND UNDER WHICH HEAD THE DISCLOSER OF RS. 1.50 CRORES TO BE ADJUSTED. AS I DID NOT CARRY THE DETAILS, 1 TOLD THAT I SHALL PREPARE THE DETAILS AND SUBMIT IT. HERE ALSO I DID NOT ACCEPT THE FIGURE OF RS. 1.50 CRORES. I ONLY SAID THAT 1 SHALL WORK OUT THE DETAILS AND COME OUT WITH THE AMOUNT 1 WANT TO SURRENDER. LATER DUE TO SOME FAMILY AND BUSINESS PROBLEMS, I COULD NOT WORK OUT THE DETAILS. NOW I HAVE WORKED OUT THE DETAILS AND ADMITTED INCOME OF RS.23,90,100 / - FOR THE ASST. YEAR 2011 - 12 AND RS.24,21 ,660/ - FOR THE ASST. YEAR 2012 - 13 . THESE FIGURE ARE ARRIVED FROM THE NUMBER OF BAGS SOLD TO M/S. DALMIA CEMENT (BHARAT) LTD, AND I HA VE ALREADY PAID THE TAX ALONG WITH INTEREST ON THE ADMITTED INCOME AND FILED TH E REVISED RETURNS. 8. THE BONE OF CONTENTION IS THAT THE SURRENDERED AMOUNT OF RS. 1.50 CRORES WHICH WAS NOT FOUND TO BE OFFERED IN THE RETURN OF INCOME. 9. THE REVENUE ALLEGES THAT THE SEARCH OPERATION WAS CONDUCTED ON 20.1.2012 AND THE ASSESSEE HAS RE TRACTED ON 18.3.2014. THE LD. DR HAS STRONGLY STATED THAT THE ASSESSEE DID NOT GIVE ANY TIME TO THE ASSESSING OFFICER FOR MAKING ANY FURTHER ENQUIRY SINCE THE ASSESSMENT WAS GETTING BARRED BY LIMITATION . WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE LD. DR. EXHIBIT 63 IS THE COMPUTATION OF TAXABLE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IT CAN BE 9 SEEN FROM THIS COMPUTATION THAT THE ASSESSEE HAS ADDED INCOME ADMITTED AT RE. 1/ - ON 23,90,100 BAGS SOLD TO DALMIA CEMENT BHARAT LTD AMOU NTING TO RS. 2421660/ - . IT IS CLEAR FROM THIS COMPUTATION OF INCOME THAT THE ASSESSEE DID ADD THE INCOME ADMITTED IN HIS STATEMENT DURING THE SEARCH PROCEEDINGS. IT IS NOT A CASE OF RETRACTION OF ADMISSION BUT IS A CASE OF CORRECTION OF THE ADMISSION. 10. FROM THE ANSWER TO QUESTION NO. 12 MENTIONED ELSEWHERE, WE FIND THAT THE ASSESSEE HAS SPECIFICALLY STATED THAT THE DETAILS OF ADMISSION ASSESSEE - WISE AND ASSESSMENT YEAR - WISE WILL BE SUBMITTED IN DUE COURSE OF TIME. FROM THIS, IT CAN BE SAFELY CONCLUDED T HAT AT THE TIME OF SEARCH PROCEEDINGS ITSELF, THE ASSESSEE HAD MADE IT CLEAR THAT THE ADMISSION OF RS. 1.50 CRORES WAS NOT RESTRICTED TO THE ASSESSEE ITSELF BUT TO VARIOUS OTHER PERSONS AND PERTAINING TO DIFFERENT ASSESSMENT YEARS. EXHIBIT NO. 65 IS THE C OMPUTATION OF INCOME FOR ASSESSMENT YEAR 2011 - 12. THERE ALSO, THE ASSESSEE HAS ADDED INCOME ADMITTED AMOUNTING TO RS. 23,90,1 0 0/ - . THIS MEANS THAT IN TWO ASSESSMENT YEARS, THE ASSESSEE HAS ADDED RS. 48 LAKHS. 11. THE COMPUTATION OF INCOME CLEARLY SHOWS T HAT THE ASSESSEE HAS QUANTIFIED THE NUMBER OF BAGS WHICH HE COULD NOT QUANTIFY AT THE TIME 10 OF STATEMENT RECORDED DURING THE COURSE OF SEARCH OPERATIONS. WE FIND THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT/ERROR IN THE QUANTIFICATION OF ALLEG ED SALE OF BAGS TO DALMIA CEMENT NOR THE ASSESSING OFFICER HAS BROUGHT ANY COGENT MATERIAL OR EVIDENCE ON RECORD. THE ASSESSING OFFICER HAS NOT DONE ANY INVESTIGATION OR COLLECTED ANY EVIDENCE. EVEN THE CBDT IN ITS CIRCULAR DATED 10.03.2003 DIRECTED THEI R OFFICERS TO BASE THEIR ASSESSMENTS ON THE EVIDENCES COLLECTED DURING THE COURSE OF SEARCH AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS SPECIFICALLY DIRECTED THAT NO ADDITION SHOULD BE BASED SOLELY ON THE CONFESSION OR DISCLOSURES MADE AT THE T IME OF SEARCH. THE BOARD VIEWED THAT CONFESSION RECORDED DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DID NOT SERVE ANY USEFUL PURPOSE. THUS, THE BOARD INSISTED THE ASSESSING OFFICER TO RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING T HE SEARCH OPERATION AND THAT THE ASSESSMENT COULD NOT REST SIMPLY ON THE CONFESSION/STATEMENTS MADE. 12. IT IS ALWAYS OPEN TO A PERSON WHO MADE THE ADMISSION TO SHOW THAT THE STATEMENT TO OFFER INCOME IS INCORRECT AND HAD MATERIAL TO SUBSTANTIATE. SO, W E FIND THAT NOT ONLY THE ASSESSEE HAD MADE IT CLEAR IN HIS STATEMENT RECORDED AT THE TIME OF SEARCH THAT THE PARTY - 11 WISE/ASSESSMENT YEAR - WISE DETAILS WOULD BE FURNISHED DURING THE COURSE OF TIME, BUT THE ASSESSEE HAS OFFERED THE INCOME EARNED OUTSIDE THE BO OKS ON THE SALE OF BAGS AS IS EVIDENT FROM THE COMPUTATION OF INCOME MENTIONED ELSEWHERE. 13. L ET US CONSIDER A REVERSE SITUATION. SUPPOSE THE ASSESSEE ADMITTED UNDISCLOSED INCOME OF RS. 2 CRORES IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AND THE ASSESSING OFFICER FINDS THAT THE UNDISCLOSED INCOME AS PER MATERIAL AVAILABLE ON RECORD AMOUNTS TO RS. 5 CRORES, WOULD THE ASSESSING OFFICER MAKE ADDITION OF RS. 2 CRORES ONLY SINCE IT WAS OFFERED IN HIS STATEMENT OR MAKE ADDITION OF RS. 5 CRORES WHICH WAS BASED UPON THE MATERIAL AVAILABLE ON RECORD? THE ANSWER IS OBVIOUS. HE WOULD MAKE ADDITION OF RS. 5 CRORES . BY THE SAME ANALOGY, IF THE ASSESSEE CAN DEMONSTRATE THAT THE AMOUNT ADMITTED AT THE TIME OF SEARCH WAS, IN FACT, LESS ER ON THE BASIS OF MATERIAL EVIDENCE, THEN THE ASSESSEE CAN RIGHTLY DO SO. CARDINAL POINT IS THAT THERE SHOULD BE SOME BASIS FOR MAKING THE ADMISSION. IN THE CASE IN HAND, WE FIND THAT IN THE COMPUTATION OF INCOME NOT ONLY THE ASSESSEE CORRECTED THE ADMITTED FIGURE BUT ALSO QUANTIFIED THE ADMITTED INCOME. 12 14. ON THE PECULIAR FACTS OF THE CASE IN HAND, WE DO NOT FIND ANY MERIT IN THE ADDITIONS MADE BY THE ASSESSING OFFICER. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 1.50 CRORES. 15. BEFORE PARTING, THE LD. DR HAS INSISTED TO CONSIDER THE JUDICIA L DECISIONS RELIED UPON BY THE A O AND THE LD. CIT(A). WE FIND THAT ALL THOSE DECISIONS ARE ON DIFFERENT SET OF FACTS AND, THEREFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSION MADE BY THE LD. DR. 16 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER IS PR ONOUNCED IN THE OPEN COURT ON 2 5 .0 5 .2018. SD/ - SD/ - [ H.S. SIDHU ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 5 T H MAY, 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI