DCIT, Chandigarh V. Sh. Jagdish Rai Goyal, Panchkula

ITA 939/CHANDI/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9792 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Document seized; Peak credit; Documents seized
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 939/CHD/2013 ASSESSMENT YEAR: 2009-10 THE DCIT, VS SHRI JAGDISH RAI GOYAL, CENTRAL CIRCLE-II, HOUSE NO. 109, CHANDIGARH. SECTOR 8, PANCHKULA PAN: ACIPG5588M & ITA NO. 985/CHD/2013 ASSESSMENT YEAR: 2009-10 SHRI JAGDISH RAI GOYAL, VS THE ACIT, HOUSE NO. 109, CENTRAL CIRCLE-II, SECTOR 8, CHANDIGARH. PANCHKULA PAN: ACIPG5588M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUSHIL KUMAR ASSESSEE BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 07.07.2016 DATE OF PRONOUNCEMENT : 13.07.2016 O R D E R PER BHAVNESH SAINI, JM BOTH THE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), CENTRAL, GURGAON DATED 29.07.2013 FOR ASSESSMENT YEAR 2009-10. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. 3. BOTH THE APPEALS ARE DECIDED TOGETHER BECAUSE IS SUE IS COMMON. 4. THE REVENUE IN ITS APPEAL CHALLENGED THE ORDER O F LD. CIT(APPEALS) IN DELETING THE ADDITION OF RS. 40,12, 951/- MADE BY ASSESSING OFFICER ON THE BASIS OF PAGE 89, ANNEXURE A-1, SEIZED FROM THE RESIDENCE OF ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INC OME TAX ACT. THE ASSESSEE ON THE SAME ISSUE, CHALLENGE D THE ORDER OF LD. CIT(APPEALS) ON GROUND NO. 1 SUSTAININ G THE ADDITION OF RS. 28,81,499/- OUT OF TOTAL ADDITION O F RS. 68,94,450/- MADE ON ACCOUNT OF PEAK CREDIT ON THE B ASIS OF THE SAME SEIZED DOCUMENT. 5. IN THIS CASE, A SEARCH UNDER SECTION 132(1) OF T HE INCOME TAX ACT WAS CONDUCTED ON 16.01.2009 AT THE RESIDENCES AND OFFICES OF THE INDIVIDUALS AND GROUP CONCERNS OF M/S A.P.SHRESTHA (GOYAL) GROUP OF CASES , INCLUDING THE ASSESSEE. IN RESPONSE TO NOTICE UNDE R SECTION 142(1), ASSESSEE HAD FILED HIS RETURN OF IN COME ON 31.03.2010 SHOWING TOTAL INCOME OF RS. 1,04,71,120/ - UNDER SECTION 139(4) OF THE ACT. THE ASSESSEE IS A DIRECTOR OF M/S A.P.PAPER MILLS LTD. AND RECEIVED T HE SALARY OF RS. 7,20,000/- BESIDES DECLARING INCOME F ROM OTHER SOURCES OF RS. 99,86,124/-. THE GROUP SURREND ERED RS. 4.50 CR UNDER SECTION 132(4) OF THE ACT. THE 3 ASSESSEE HAS SURRENDERED RS. 99,15,000/- IN HIS RET URN FOR ASSESSMENT YEAR 2009-10 UNDER APPEAL. THE ASSESSING OFFICER MADE ADDITION OF RS. 68,94,450/- ON THE BASIS OF PAGE NO. 89 ANNEXURE 1-A SEIZED FROM T HE RESIDENCE OF THE ASSESSEE WHICH CONTAINED CERTAIN E NTRIES RELATED TO RECEIPTS AND PAYMENTS, DETAILS ARE REPRO DUCED IN THE ASSESSMENT ORDER. DURING THE SEARCH OPERATI ON, THE ASSESSEE WAS CONFRONTED WITH THE DOCUMENT SEIZE D AND IN RESPONSE TO THAT, HE HAD SUBMITTED THAT DOCU MENT FOUND IN THE COURSE OF SEARCH OPERATION, REPRESENTS UNEXPLAINED TRANSACTION. THE ASSESSING OFFICER AFT ER CONSIDERING EXPLANATION OF THE ASSESSEE AND THAT SE IZED DOCUMENT IS FOUND FROM THE POSSESSION OF THE ASSESS EE, APPLIED PROVISIONS OF SECTION 292C OF THE ACT AND M ADE THE ABOVE ADDITION. 6. THE ADDITION OF RS. 68,94,450/- WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER IN WH ICH THE ASSESSEE EXPLAINED THAT THE SEIZED PAPER ABOVE WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE. ON PERU SAL OF THE DOCUMENT, IT COULD BE SEEN THAT THERE ARE ROUGH JOTTING ON THESE PAPERS WITHOUT ANY INTELLIGIBLE AN D COMPREHENDIBLE NARRATION. THE ASSESSEE IS IN THE BUSINESS OF SALE AND PURCHASE OF WASTE PAPER AND COMMISSION INCOME FROM SALE/PURCHASE OF PROPERTY. ALL THE ENTRIES APPEARING ON THESE PAPERS ARE ONLY ENQUIRIES/REFERENCES MADE IN RESPECT OF VARIOUS 4 PROPERTIES BY THE CLIENTS. THE ASSESSEE WAS WRITIN G THE SAME FOR MEMORY PURPOSE AND NO TRANSACTIONS HAVE BE EN CONDUCTED THROUGH THESE SEIZED PAPERS. FURTHER, NO DOCUMENT OR AGREEMENT WAS FOUND, THEREFORE, IT WAS LOOSE DUMB DOCUMENT. THE ASSESSEE, ALTERNATIVELY SUBMITT ED THAT ASSESSEE HAS FILED A SURRENDER LETTER AND IT C OULD BE SEEN THAT RS. 40,12,951/- HAS BEEN SURRENDERED TO C OVER UP ANY LOOSE PAPER/DOCUMENT SEIZED DURING THE COURS E OF SEARCH, THEREFORE, ATLEAST ADDITION TO THE EXTENT O F RS. 40,12,951/- MAY BE DELETED. THE LD. CIT(APPEALS), ON PERUSAL OF THE SEIZED PAPER, SURRENDER LETTER OF TH E ASSESSEE AND MATERIAL ON RECORD, DELETED THE ADDITI ON OF RS. 40,12,951/-. THE FINDINGS OF LD. CIT(APPEALS) IN PARA 6.1 OF THE ORDER ARE REPRODUCED AS UNDER : 6.1. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE IMPUGNED ORDER. THE ADDITION OF RS. 68,94,450/- EMA NATES FROM PAGE NO. 89 OF ANNEXURE A-1 SEIZED FROM THE RESIDENCE FROM T HE ASSESSEE. THE AO OBSERVED THAT THE DOCUMENT DEPICTED OPENING BALA NCE, RECEIPTS, PAYMENTS AS WELL AS CLOSING BALANCE. IT WAS ALSO OB SERVED BY THE AO THAT THE ASSESSEE HAD ADMITTED WHILE RECORDING STATEMENT U/S 132(4), THAT THE LOOSE DOCUMENTS RELATED TO HIS UNEXPLAINED TRANSACT IONS. CONSEQUENTLY, THE AO MADE A PEAK CREDIT ADDITION. THE CLAIM OF TH E ASSESSEE IS THAT THE SAID DOCUMENT CONTAINED ROUGH JOTTINGS/ESTIMATE S OF HIS BUSINESS OF SALE/ PURCHASE OF PROPERTY AND THAT THE DOCUMENT WA S LOOSE AND DUMB TO WARRANT ANY ADDITION. ALTERNATIVELY, IT WAS ALSO PLEADED THAT AT MOST ONLY THE COMMISSION AMOUNT COULD BE ADDED. FURTHER ATTENTION WAS DRAWN TO THE LETTER DATED 08.10.2010, WHEREBY A BRE AKUP OF THE SURRENDER WAS PROVIDED, WHEREIN AN AMOUNT OF RS. 40 ,12,951/- WAS OFFERED TO COVER UP ANY DISCREPANCY ARISING FROM AN Y-LOOSE PAPER/ DOCUMENTS SEIZED. THIS WAS A JOINT SURRENDER MADE A LONGWITH HIS SON SHRI SANDEEEP GOYAL FOR THE AY 2009-10. IT WAS THER EFORE PUT FORTH 5 THAT THE ADDITION TANTAMOUNT TO DOUBLE ADDITION TO THE EXTENT OF RS. 40,12,951./-. ON A PERUSAL OF THE DOCUMENT COPY OF REPRODUCED IN THE IMPUGNED ORDER, IT IS SEEN THAT OPENING AND CLOSING BALANCES AS WELL AS OF THE INCOMINGS AND OUTGOINGS ARC CLEARLY INDICATE D. THE NARRATIONS ARC CLEAR SO AS TO REPRESENT TRANSACTIONS AND BY NO STRETCH OF IMAGINATION CAN THE SAME BE SAID TO BE DUMB. THE PE AK CREDIT OF THE RECEIPTS AND PAYMENTS WAS WORKED OUT TO RS. 68,94,4 50/- WHICH IS ONLY REASONABLE. HOWEVER THE OTHER CONTENTION OF THE ASSESSEE IS THA T CREDIT FOR SURRENDER OF RS. 40,12,951./- MADE IN THE SURRENDER LETTER TO COVER UP ANY DISCREPANCIES FOUND MAY BE GIVEN. AS STATED EAR LIER THIS SURRENDER HAS BEEN MADE TOGETHER WITH HIS SON SHRI SANDEEP GOYAL. THE AO OBSERVES AT PARA 3.1 OF THE IMPUGNED ORDER A S UNDER : 3.1 THE ASSESSEE HAS FURTHER SUBMITTED IN HIS LETTE R DATED 08-10-2010 THAT HE AND HIS SON SRI SANDEEP GO YAL HAS ALSO SURRENDERED TOGETHER AN AMOUNT OF RS. 40,1 2,951 /- IN A.Y. 2009-10 TO COVER UP ANY DISCREPANCY FOUN D IN ANY LOOSE PAPER/DOCUMENTS SEIZED DURING THE COURSE OF SEARCH FROM HOUSE NO. -109, SEC-8, PANCHKULA AND II .NO. 604, B BLOCK, 6 TH FLOOR, CHS-86, SURYA COOP HOUSING SOCIETY, SEC-20, PANCHKULA FURTHER PAGE NO. 89 OF ANNEXURE A-L IS NOT PART OF THE SURRENDER AS PER BREAK-UP OF THE DISCLOSURE DESCRIB ING THE RELEVANT DOCUMENTS SO CONSIDERED. I ALSO FIND THAT THE SON S HRI SANDEEP GOYAL HAS NOT TAKEN ANY CREDIT FOR THIS ADDITIONAL SURREN DER TO COVER-UP ANY DISCREPANCIES IN HIS APPEAL FILED FOR AY 2009-10. T HUS IN ALL FAIRNESS THE ASSESSEE DESERVES TO GET THE BENEFIT OF RS. 40,12,9 5L/-. CONSEQUENTLY THE ADDITION ON ACCOUNT OF PAGE 89 OF A-L IS RESTR ICTED TO RS. 28,81,499/-. THE ASSESSEE GETS PART RELIEF IN THIS GROUND OF APPEAL. 7. THE REVENUE AS WELL AS ASSESSEE ARE IN APPEAL. 6 8. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THE GROUND OF APPEAL RAISED BY BOTH TH E PARTIES IN THEIR APPEALS. IT IS NOT IN DISPUTE THA T THE SEIZED PAPER NO. 89 OF ANNEXURE A-1 WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT THE SEIZED PAPER DEPICTED OPENING BAL ANCE, RECEIPT, PAYMENT AS WELL AS CLOSING BALANCE. THE ASSESSING OFFICER ALSO NOTED THAT ASSESSEE HAD ADMI TTED THE CONTENTS OF THE SAME BY RECORDING STATEMENT UND ER SECTION 132(4) OF THE ACT THAT THE LOOSE DOCUMENT R ELATED TO UNEXPLAINED TRANSACTIONS OF THE ASSESSEE. THERE FORE, ASSESSING OFFICER RIGHTLY APPLIED PROVISIONS OF SEC TION 292C OF THE INCOME TAX ACT RAISING A PRESUMPTION TH AT THE SEIZED DOCUMENT BELONGS TO THE ASSESSEE AND CONTENTS OF THE SEIZED DOCUMENTS ARE TRUE. THEREFO RE, BURDEN WOULD BE UPON ASSESSEE TO DISPROVE THE CONTE NTS OF THE SEIZED DOCUMENT. HOWEVER, ASSESSEE MERELY CONTENDED THAT IT IS A DUMB DOCUMENT AND CONTAINED JOTTINGS ETC. WHICH HAVE NOT BEEN PROVED THROUGH AN Y COGENT OR RELIABLE EVIDENCE. THEREFORE, THE AUTHOR ITIES BELOW IN PRINCIPLE WERE JUSTIFIED IN MAKING ADDITIO N AGAINST THE ASSESSEE. 9. THE LD. COUNSEL FOR THE ASSESSEE, DURING THE COU RSE OF ARGUMENTS HAS NOT BEEN ABLE TO REBUT THE FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW. HOWEVER, T HE ASSESSEE CLAIMED BEFORE THE LD. CIT(APPEALS) THAT ASSESSEE HAD ALREADY SURRENDERED RS. 40,12,951/- TO 7 COVER UP LOOSE PAPER/DOCUMENT SEIZED DURING THE COU RSE OF SEARCH. THE LD. CIT(APPEALS) FOUND THAT ASSESSE E AND HIS SON SHRI SANDEEP GOYAL HAVE SURRENDERED THIS AMOUNT AND THAT THE SON OF THE ASSESSEE SHRI SANDEE P GOYAL HAS NOT TAKEN ANY CREDIT FOR THIS ADDITIONAL SURRENDER TO COVER UP ANY DISCREPANCY IN HIS APPEAL FILED FOR ASSESSMENT YEAR 2009-10. THE LD. CIT(APPEALS) WAS, THEREFORE, JUSTIFIED IN EXTENDING A BENEFIT OF RS. 40,12,951/- IN FAVOUR OF THE ASSESSEE ON ACCOUNT OF ADDITIONAL INCOME SURRENDERED TO COVER UP THE SEIZE D PAPER. OTHERWISE, IT WOULD AMOUNT TO DOUBLE ADDITI ON. 9(I) THE LD. DR CONTENDED THAT IT BEING A JOINT SURRENDER, NO BENEFIT SHOULD BE GIVEN TO THE ASSESS EE. HOWEVER, THE LD. CIT(APPEALS) HAS SPECIFICALLY NOTE D THAT SHRI SANDEEP GOYAL, SON OF THE ASSESSEE HAS NOT TAK EN ANY CREDIT FOR THIS AMOUNT IN HIS APPEAL FILED FOR THE SAME ASSESSMENT YEAR. THEREFORE, ASSESSEE WAS RIGH TLY GRANTED BENEFIT OF THE SAME. 10. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT LD. CIT(APPE ALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 40,12 ,951/- AND WAS ALSO JUSTIFIED IN RESTRICTING ADDITION TO R S. 28,81,499/- THUS, THE GROUND OF APPEAL RAISED ON T HIS ISSUE BY BOTH THE PARTIES HAS NO MERIT. BOTH THE A PPEALS ON THESE GROUNDS ARE ACCORDINGLY, DISMISSED. 8 11. ON GROUND NO. 2, ASSESSEE CHALLENGED THE UPHOLD ING OF ADDITION OF RS. 7,24,185/- MADE ON ACCOUNT OF PE AK CREDIT RELATING TO PAGES 3-19 OF ANNEXURE A-4 SEIZE D FROM THE RESIDENCE OF THE ASSESSEE TREATING IT AS UNEXPL AINED CASH CREDIT UNDER SECTION 68 OF THE ACT. THE ASSES SING OFFICER NOTED THAT IN THE COURSE OF SEARCH OPERATIO N, DOCUMENT MARKED A-4 WAS FOUND AND SEIZED FROM THE RESIDENCE OF THE ASSESSEE. THE PAGE NOS. 3-19 OF T HE SAID DOCUMENT A-4 CONTAINED ENTRIES RELATING TO RECEIPT AND PAYMENT WITH CLOSING BALANCES. THE ASSESSEE WAS CONFRONTED WITH THIS SEIZED PAPER DURING THE COURSE OF SEARCH AND ASSESSEE HAD SUBMITTED THAT ENTRIES REPR ESENT UNEXPLAINED TRANSACTIONS. THE STATEMENT OF THE ASS ESSEE WAS RECORDED UNDER SECTION 131 OF THE ACT WHEREIN H E HAD SUBMITTED THAT ENTRIES MENTIONED IN THESE DOCUM ENTS ARE ACTUAL TRANSACTIONS NOT CODED FIGURES. THE ASS ESSING OFFICER DID NOT ACCEPT CONTENTION OF THE ASSESSEE A ND ON PERUSAL OF THE ENTRIES CONTAINED IN THE SEIZED PAPE R, MADE THE ADDITION OF RS. 7,24,185/-. 12. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT ASSESSING OF FICER CONSIDERED ENTRIES APPEARING ON THOSE DOCUMENTS TO BE CODED FIGURES, MULTIPLIED ALL THE FIGURES BY 100 AN D AFTER TAKING THE PEAK CREDIT OF THESE FIGURES, MADE THE ADDITION. THE ENTIRE ADDITION IS MADE ONLY ON THE BASIS OF CONJECTURES AND SURMISES. THEREFORE, NO ADDITIO N COULD BE MADE. THE LD. CIT(APPEALS), CONSIDERING 9 EXPLANATION OF THE ASSESSEE, DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 7.1 O F THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 7.1. I HAVE CONSIDERED THE SUBMISSIONS OF THE AS SESSEE AND THE IMPUGNED ORDER. I FIND THAT THE AO, AFTER SCRUT INIZING THE ENTRIES CAME TO A DEFINITE FINDING THAT THE FIGURES WERE CO DED. THE CONCLUSION WAS DRAWN AS AGAINST VIZ. SCHOOL FEE- 47.00 IS WRIT TEN; SHOPPING SEC 17- 170.00; VISA FEE- 170.00 AND LOGICALLY SUCH AMO UNTS AS FEES OR SHOPPING ARE ABSURD. THE AO ALSO CORROBORATED THE S EIZED PAGES WITH OTHER SEIZED DOCUMENTS. THUS, BY MULTIPLYING T HE PEAK CREDIT OF THE CLOSING BALANCE, THE SAME WAS TAKEN AT RS. 7,31 ,500/- AND THE ADDITION WAS WORKED OUT TO RS. 7,24,185/-. ASSESSEE HAS NO CASE AT ALL. CONSIDERING THE ELUCIDATION GIVEN BY THE A.O. IN THE IMPUGNED ORDER, I UPHOLD THE ACTION OF THE A.O. THE ASSESSE E FAILS IN THIS GROUND OF APPEAL. 13. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHOR ITIES BELOW. IT IS NOT IN DISPUTE THAT SEIZED DOCUMENT W AS SEIZED FROM THE POSSESSION OF THE ASSESSEE AND ASSE SSEE IN HIS STATEMENT ADMITTED THAT THESE ENTRIES REPRES ENT UNEXPLAINED TRANSACTIONS. THEREFORE, PRESUMPTION U NDER SECTION 292C OF THE ACT ARISES AGAINST THE ASSESSEE . THE ASSESSEE HAS FAILED TO REBUT THE PRESUMPTION AROSE AGAINST THE ASSESSEE THROUGH ANY COGENT OR RELIABLE EVIDENCE. THE ASSESSING OFFICER HAS ALREADY GIVEN BENEFIT BY APPLYING PEAK OF THE SAME. DURING THE COURSE OF ARGUMENTS, LD. COUNSEL FOR THE ASSESSEE WAS NOT ABL E TO POINT OUT ANY ERROR IN THE ORDERS OF THE AUTHORITIE S BELOW. 10 IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHORITIE S BELOW. THE GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS DISMI SSED. 14. ON GROUND NO. 3, ASSESSEE CHALLENGED THE CHARGI NG OF INTEREST UNDER SECTION 234A, B AND C OF THE ACT. THE CHARGING OF INTEREST IS MANDATORY AND COMPENSATORY. THIS GROUND IS, THEREFORE, DISMISSED. 15. IN THE RESULT, THE DEPARTMENTAL APPEAL AS WELL AS APPEAL OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCUONTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JULY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD