SHRI SUMAN SOMANI, JAIPUR V. DEPUTY COMMISSIONER OF INCOME, JAIPUR

ITA 906/JPR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3355 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA DHK
• Keywords: Search and seizure; Document seized; Peak credit; Corroborative evidences; Documents seized
• Section: 143(3); 153A; 132; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO , JM VK;DJ VIHY LA-@ ITA NO. 906 & 907/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 & 2011-12 SUMAN SOMANI, VASUNDHARA, 158, JANGID BHAWAN, MI ROAD, JAIPUR. CUKE VS. D.C.I.T., CENTRAL CIRCLE-1 JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AHUPS 7512 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/02/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 19/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE COMPOSITE ORDER OF THE LD. CIT(A)-4, JAIPUR DATED 19 /09/2017 FOR THE A.Y. 2010-11 AND 2011-12 RESPECTIVELY. 2. BOTH THESE APPEALS ARE ARISING FROM THE ASSESSME NT ORDERS PASSED U/S 143(3) READ WITH SECTION 153A OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) AND THE ADDITIONS MADE BY THE ASSESSING OF FICER ARE ALSO IN PURSUANT TO THE SEARCH AND SEIZURE ACTION U/S 132 O F THE ACT. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THESE APPEALS: ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 2 GROUNDS FOR THE A.Y. 2010-11 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.5,47,815/- MADE BY ASSESSING OFFICE R ON ACCOUNT OF PEAK WORKING BY NOT CONSIDERING THAT SOURCE OF SUCH PEAK IS THE AVAILABILITY OF CASH BALANCE IN THE REGULAR CAS H BOOK OF M/S SHUBHAM, PROPRIETOR CONCERN OF THE ASSESSEE. HE HAS FURTHER ERRED IN NOT DIRECTING THE AO TO ALLOW SET OFF OF R S.3 LACS INCORRECTLY OFFERED BY ASSESSEE IN AY 2012-13 AGAIN ST THE ADDITION IF ANY SUSTAINED IN THE ASSESSMENT YEAR UNDER CONSI DERATION. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. GROUNDS FOR THE A.Y. 2011-12 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.78,263/- MADE BY ASSESSING OFFICER ON ACCOUNT OF PEAK WORKING BY NOT CONSIDERING THAT SOURCE OF SUCH PEAK IS THE AVAILABILITY OF CASH BALANCE IN THE REGULAR CAS H BOOK OF M/S SHUBHAM, PROPRIETOR CONCERN OF THE ASSESSEE. HE HAS FURTHER ERRED IN NOT DIRECTING THE AO TO ALLOW SET OFF OF R S.3 LACS INCORRECTLY OFFERED BY ASSESSEE IN AY 2012-13 AGAIN ST THE ADDITION IF ANY SUSTAINED IN THE ASSESSMENT YEAR UNDER CONSI DERATION. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 3. THERE WAS A SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE U/S 132 OF THE ACT ON 31/01/2012. IN THE COURSE OF SEARCH AND SEIZURE ACTION, CERTAIN INCRIMINATING MATERIAL WERE FOUND CO NTAINING ENTRIES OF CASH RECEIPTS AND PAYMENTS RELATING TO THE PERIOD FROM 0 9/09/2009 TO 31/01/2012 FALLING IN THE A.Y. 2010-11 TO 2012-13. IN RESPONSE TO NOTICE ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 3 U/S 153A OF THE ACT, THE ASSESSEE FILED RETURN OF I NCOME FOR THE A.Y. 2010- 11 AND 2011-12 DECLARING INCOME OF RS. 2,03,400/-, 29,19,780/- RESPECTIVELY. THE INCOME DECLARED BY THE ASSESSEE FO R THESE TWO ASSESSMENT YEARS INCLUDES RS. 33.00 LACS OFFERED BY THE ASSESSEE DURING THE SEARCH AND SEIZURE ACTION. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U/S 143(3) READ WITH SECTION 153A OF THE ACT, PICKED UP THE PEAK DEBIT AND CREDIT AND FOUND THAT FOR THE A.Y. 2 010-11, THE AMOUNT OF RS. 7.00 LACS IS PEAK CREDIT AND FOR THE A.Y. 2011- 12, A PEAK DEBIT WAS TAKEN AT RS. 30,78,263/-. AFTER ALLOWING THE INCOME DECLARED BY THE ASSESSEE. THE ASSESSING OFFICER MADE THE ADDITION O F RS. 5,47,815/- AND RS. 78,263/- RESPECTIVELY FOR THESE TWO ASSESSMENT Y EARS. 4. THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT A S PER WORKING OF PEAK BALANCES, THE PAYMENT IS MORE THAN THE RECEIPT AND SOURCE OF SUCH PAYMENT IS OUT OF CASH BALANCE AVAILABLE IN THE BOO KS OF M/S SHUBHAM, A PROPRIETORSHIP CONCERN OF THE ASSESSEE. THE LD AR H AS FURTHER POINTED OUT THAT THE CASH BALANCE IN THE ACCOUNTS WAS AVAILABLE ON ACCOUNT OF WITHDRAWAL FROM BANK ACCOUNT AND THE ASSESSEE PRODUCE D SUPPORTING EVIDENCE INCLUDING CASH BOOK OF M/S SHUBHAM AS WELL AS BANK DETAILS. THE ASSESSEE HAS ALREADY OFFERED RS. 3.00 LACS ON ACCOU NT OF PEAK CREDIT FOR THE A.Y. 2010-11 AND RS. 30.00 LACS FOR THE A.Y. 20 11-12. FURTHER THE ASSESSEE HAS ALSO OFFERED RS. 3.00 LACS IN THE A.Y. 2012-13 AND HENCE A ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 4 TOTAL INCOME OF RS. 36.00 LACS WAS OFFERED BY THE AS SESSEE FOR THREE YEARS WHICH WERE COVERED UNDER THE SEIZED DOCUMENTS. HENCE, THE LD AR HAS SUBMITTED THAT THE ASSESSEE HAS ALREADY OFFERED THE ENTIRE INCOME FOR THESE THREE YEARS AND ALSO EXPLAINED THE SOURCE OF THE PAYMENT WHICH IS EXCESS THEN THE RECEIPT AS PER THE DOCUMENTS FROM T HE BOOKS OF M/S SHUBHAM, A PROPRIETORSHIP CONCERN THEN NO FURTHER A DDITION IS CALLED FOR. THERE IS NO DISPUTE ON THE WORKING OF THE PEAK AMOUNT BUT THE DISPUTE IS ONLY WITH REGARD TO THE AVAILABILITY OF CASH BALANCE IN THE REGULAR CASH BOOK OF M/S SHUBHAM. THE ASSESSING OFFICER HAS NOT ALLOWED SUCH SET OFF ON THE GROUND THAT M/S SHUBHAM WAS NOT SUBJECTED TO SEARCH. THUS, THE LD AR HAS SUBMITTED THAT ONCE THE ASSESSEE HAS PRODUCED A LL THE SUPPORTING DOCUMENTS REGARDING THE AVAILABILITY OF THE CASH TH EN THE ADDITION IS NOT JUSTIFIED. 5. ON THE OTHER HAND, THE LD CIT-DR HAS SUBMITTED T HAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME U/S 139 OF THE AC T AND ONLY IN RESPONSE TO NOTICE U/S 153A OF THE ACT, THE RETURNS WERE FILE D BY THE ASSESSEE. THE CASH BOOK OF M/S SHUBHAM IS NOT AUTHENTICATED DOCUM ENT AS IT WAS NOT DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SEAR CH AND SEIZURE ACTION. THE ASSESSING OFFICER HAS TAKEN THE PEAK BALANCES WHI CH IS NOT IN DISPUTE AND THEREFORE, ONCE THE ASSESSEE HAS FAILED TO EXPL AIN THE AVAILABILITY OF CASH THEN THE ADDITION MADE BY THE ASSESSING OFFICE R OF THE DIFFERENTIAL ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 5 AMOUNT IS JUSTIFIED. HE HAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS ALREADY ALLOWED THE SET OFF OF THE PEAK BALANCE OF ONE YEAR AGAINST THE NEXT YEAR. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. DURING THE SEARCH AND SEIZURE A CTION, SOME DOCUMENTS WERE SEIZED WHICH CONTAINS THE ENTRIES OF RECEIPTS AN D PAYMENTS. THE ASSESSING OFFICER HAS TAKEN THE PEAK RECEIPT AND PE AK PAYMENT WHICH SHOWS THE PEAK CREDIT AND DEBIT AS PER THE SEIZED MA TERIAL. THE SUMMARIZED DETAILS OF THE WORKING OF THESE THREE YEA RS AS UNDER: AY DATE CUMULATIVE CREDIT PEAK (IN RS.) CUMULATIVE DEBIT PEAK (IN RS.) TOTAL PEAK FOR THE YEAR (IN RS.) ADDITION TO BE MADE (IN RS.) 2010-11 10/12/2009 7,00,000/- - 7,00,000/- 8,47,815 /- 19/12/2009 - (1,47,815) (1,47,815/-) 2011-12 23/03/2011 - (30,78,263/-) (29,30,948/-) (2 9,30,9,48/-) 2012-13 29/08/2011 _ 29,78,763/-) NIL NIL THUS, THE PEAK CREDIT FOR THE A.Y. 2010-11 IS RS. 7. 00 LACS WHEREAS THE PEAK DEBIT FOR THE A.Y. 2011-12 IS RS. 30,78,260/- WHICH REMAINS SAME IN THE NEXT YEAR AS THERE IS NO INCREASE IN THE PEAK D EBIT. THE ASSESSING OFFICER HAS TAKEN THE BALANCE AMOUNT AFTER GIVING A DJUSTMENT OF THE INCOME OFFERED BY THE ASSESSEE IN THE RETURN OF INC OME FOR THE A.Y. 2010- 11 AND 2011-12 AND MADE THE ADDITION OF THE BALANCE AMOUNT OF RS. 5,47,815/- FOR THE A.Y. 2010-11 AND RS. 78,263/- FO R THE A.Y. 2011-12. THERE IS NO DISPUTE THAT THE ASSESSEE HAS OFFERED TH E TOTAL INCOME OF RS. 36.00 LACS WHILE FILING THE RETURN OF INCOME IN RESP ONSE TO THE NOTICE U/S 153A OF THE ACT FOR THESE THREE ASSESSMENT YEARS I. E. A.Y. 2010-11 TO ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 6 2012-13. THE ASSESSING OFFICER THOUGH CONSIDERED TH E RETURN OF INCOME FOR THESE TWO ASSESSMENT YEARS BUT HAS NOT ALLOWED THE CR EDIT OF THE INCOME OFFERED BY THE ASSESSEE FOR THE A.Y. 2012-13. FURTH ER THE ASSESSEE HAS ALSO PRODUCED THE CASH BOOK OF M/S SHUBHAM WHICH IS A PROPRIETORSHIP CONCERN OF THE ASSESSEE AND EXPLAINED THE AVAILABIL ITY OF CASH FOR THE PEAK DEBIT FOR THE A.Y. 2011-12. THE ASSESSING OFFICER D ID NOT ACCEPT THE CASH BOOK ON THE GROUND THAT IT WAS NOT SUBJECTED TO SEAR CH, HOWEVER, ONCE THE BUSINESS ACTIVITY OF M/S SHUBHAM IS NOT IN DISPUTE AND THE INCOME OFFERED BY THE ASSESSEE IS ALSO COMPRISING OF THE ACTIVITY OF M/S SHUBHAM, A PROPRIETORSHIP CONCERN OF THE ASSESSEE THEN THE AVA ILABILITY OF THE CASH IN THE PROPRIETORSHIP CONCERN IS VERY MUCH AVAILABLE T O EXPLAIN THE SOURCE OF PEAK DEBIT I.E. THE PAYMENT REFLECTED IN THE SEIZED MATERIAL OVER THE RECEIPTS IN THE SAID SEIZED DOCUMENTS. THEREFORE, TH OUGH, THE SEIZED MATERIAL IS A RELEVANT MATERIAL FOR MAKING THE ASSE SSMENT AND ADDITION, HOWEVER, ONCE THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE AVAILABILITY OF CASH WHICH IS OTHERWISE NOT DISTURBED BY THE ASSESSI NG OFFICER BUT REFUSED TO ACCEPT ON TECHNICAL GROUND THEN THE ADDITION CAN NOT BE MADE IGNORING THE AVAILABILITY OF CASH IN THE BOOKS OF THE ASSESS EE. SINCE THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS OUGHT TO HAVE EXAMINED ALL THE RECORDS, THEREFORE, THE CASH BOOK PRODUCED BY THE A SSESSEE CANNOT BE REJECTED ON TECHNICAL GROUNDS RATHER THE CORRECTNES S OF THE SAME WAS ITA 906 & 907/JP/2017_ SUMAN SOMANI VS. DCIT 7 REQUIRED TO BE EXAMINED. ONCE THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING ON THE CORRECTNESS OF THE CASH PEAK FILED B Y THE ASSESSEE AND FURTHER THE ASSESSEE HAS ALSO OFFERED THE TOTAL AMO UNT OF RS. 36.00 LACS AS INCOME FOR THESE THREE YEARS THEN THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. THE SAME IS DELETED FOR BO TH THE YEARS. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2019. SD/- SD/- JES'K LH 'KEKZ FOT; IKY JKO (RAMESH C SHARMA) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19 TH FEBRUARY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI SUMAN SOMANI, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CENTRAL CIRCLE-1, JAIPU R. 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. 906 & 907/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR