SHRI BAJRANG LAL BADAYA, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, JAIPUR

ITA 949/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3592 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DR DHK
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Income from undisclosed sources; Search and seizure; Corroborative evidences

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 FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 949/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2014-15 SHRI BAJRANG LAL BADAYA C-16, VIJAY NAGAR COLONY VIDHYADHAR NAGAR, NAYA KHERA, JAIPUR CUKE VS. THE ACIT CENTRAL CIRCLE - 1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AARPG 4449 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI K.L. MOOLCHANDANI, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY:SMT. SEEMA MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/05/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 18 /05/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A)-4, JAIPUR DATED 25-09-2017 FOR THE ASSESSMEN T YEAR 2014-15. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 20-03-2014. THE ASSESSEE DISCLOSED THE BROKERAGE RE CEIPT OF RS. 6.40 LACS. THE CASH OF RS. 5,67,300/- WAS FOUND AT THE RESIDEN TIAL PREMISES OF THE ASSESSEE OUT OF WHICH RS. 5.00 LACS WAS SEIZED. THE ASSESSEE HAS ALSO SURRENDERED THIS AMOUNT AS UNACCOUNTED INCOME. THE ASSESSEE SUBMITTED ITA NO.949/JP/2017 SHRI BAJRAN G LAL BADAYA VS ACIT, CENTRAL CIRCLE -1 ,JAIPUR 2 THE RETURN OF INCOME ON 7-01-2015 DECLARING TAXABLE INCOME OF RS. 3,45,940/-. THE SOURCE OF INCOME WAS SALARY FRO M M/S. SHANKAR LAL BADAYA, BROKERAGE INCOME, BANK INTEREST AND PROFIT FROM SALE OF PLOTS. THE AO MADE THE ADDITION OF RS. 43,800/- OUT OF VAR IOUS EXPENSES CLAIMED BY THE ASSESSEE AND RS. 5.00 LACS FOR UNEXP LAINED CASH FOUND DURING THE COURSE OF SEARCH. THE ASSESSMENT WAS FIN ALIZED AT RS. 8,89,740/-. THE LD. CIT(A) HAS CONFIRMED THE AD DITIONS. NOW THE ASSESSEE IS IN APPEAL TAKING THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS FACTUALLY AND LEGALLY ERRED IN PASSING T HE WELL-REASONED AND LOGICAL ORDER. THE LD. CIT(A) HAS PASSED THE APPEAL ORDER WITHOUT ADDRESSING THE POINTS AT ISSUE RAISED IN THE WRITTE N SUBMISSION. THUS THE APPEAL ORDER SO PASSED IS BAD IN LAW AND DESERVES T O BE QUASHED SUMMARILY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED IN MAKING AN D CONFIRMING THE ADDITION OF RS. 43,800/- MADE ON ACCOUNT OF THE DIS ALLOWANCE OF CERTAIN EXPENSES DEBITED TO INCOME AND EXPENDITURE A/C WITH OUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THE ADD ITION SO MADE DESERVES TO BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED IN MAKING AN D CONFIRMING THE ADDITION OF RS. 5,00,000/- MADE ON ACCOUNT OF THE A LLEGED UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH OPERATIONS W ITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THUS TH E ADDITION SO MADE AND CONFIRMED BY THE AUTHORITIES BELOW IS FACTUALLY AND LEGALLY INCORRECT AND THE SAME DESERVES TO BE DELETED SUMMARILY. ITA NO.949/JP/2017 SHRI BAJRAN G LAL BADAYA VS ACIT, CENTRAL CIRCLE -1 ,JAIPUR 3 3.1 IN GROUND NO. 1, THE ASSESSEE HAS NOT RAISED AN Y SPECIFIC GROUND. IT HAS BEEN SIMPLY PLEADED THAT THE LD. CIT(A) HAS FAC TUALLY AND LEGALLY ERRED IN NOT PASSING WELL REASONED AND LOGICAL ORDE R, HOWEVER, IT IS NOT SPECIFIED HOW THE ORDER OF THE LD. CIT(A) WAS NOT WELL REASONED AND ILLOGICAL. NO PLEADINGS WERE MADE ON THIS GROUND DU RING THE COURSE OF HEARING OF APPEAL. NO SPECIFIC POINT WAS MENTIONED WHICH HAS NOT BEEN CONSIDERED OR ADDRESSED BY THE LD. CIT(A). IN VIEW OF THESE FACTS, THIS GROUND IS TREATED AS GENERAL GROUND AND THE SAME IS THEREFORE, DISMISSED. 4.1 IN THE GROUND NO. 2, THE ASSESSEE HAS CHALLENGE D THE CONFIRMATION OF ADDITION OF RS. 43,800/-. THE LD. CIT(A) HAS DEA LT WITH THIS ISSUE IN PARA 5 OF HIS ORDER. THE ASSESSEE HAS DISCLOSED THE BROKERAGE INCOME OF RS. 6.40 LACS. THE ASSESSEE HAS ALSO CLAIMED SALARY OF RS. 15,000/- PER MONTH WHICH HAS BEEN CLAIMED TO HAVE BEEN PAID TO SHRI PREM KARAN. THE ASSESSEE HAS ALSO CLAIMED CONVEYANCE EXPENSES OF RS. 27,000/- AND TELEPHONE EXPENSES OF RS. 1,000/- PER MONTH. THE AO DISALLOWED 20% OF THE EXPENSES ON ADHOC BASIS. THE LD. CIT(A) HAS CON FIRMED THE ADDITION BY HOLDING AS UNDER:- 5. I HAVE SEEN THE ORDER OF THE AO AND SUBMISSION IN THIS REGARD. I FIND AO IS CATEGORICALLY POINTED OUT THAT NO SUPPORTING EVIDENCES WERE PRODUCED FOR THE EXPENSES CLAIMED. N O ANY REGULAR BOOKS OF ACCOUNTS ARE MAINTAINED. ACCORDINGLY, THE DISALLOWANCE OF 20% OF SUCH EXPENSES IS JUSTIFIED BY THE AO. FURTHE R THE ARGUMENT OF ITA NO.949/JP/2017 SHRI BAJRAN G LAL BADAYA VS ACIT, CENTRAL CIRCLE -1 ,JAIPUR 4 THE APPELLANT THAT NO INCRIMINATING MATERIAL IS FOU ND IS NOT CORRECT AS THIS IS A SEARCH YEAR AND LEGAL GROUND TAKEN BY THE APPELLANT IS NOT VALID FOR THE SEARCH YEAR. APPELLANT APPEAL IN GROUND NO. 1 IS FAILS. 4.2 WE HAVE HEARD BOTH SIDES SUBMISSIONS. THERE IS NO SUPPORTING EVIDENCES REGARDING CLAIM OF THESE EXPENSES. NO REG ULAR BOOKS OF ACCOUNTS WERE MAINTAINED. IN SUCH A SITUATION, WE A RE OF THE VIEW THAT DISALLOWANCE OF 20% OF THE EXPENSES IS QUITE REASON ABLE AND DESERVES TO BE SUSTAINED. HENCE, WE CONFIRM THE ORDER OF THE LD . CIT(A) BY DISMISSING THE GROUND NO. 2 OF THE ASSESSEE. 5.1 THE GROUND NO. 3 OF THE ASSESSEE IS REGARDING C ONFIRMING THE ADDITION OF RS. 5.00 LACS OF CASH FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERATION. THE ASSESSEE HAS DISCLOSED BROKER AGE INCOME OF RS. 6.40 LACS. HOWEVER, IN THE RETURN, THE INCOME DISCL OSED WAS ONLY OF RS. 3,45,940/- BY THE ASSESSEE. THE LD. CIT(A) HAS CONF IRMED THE ADDITION BY HOLDING AS UNDER:- 7. WITH REGARD TO GROUND NO. 1, I HAVE PERUSED THE ORDER BY THE AO AND SUBMISSIONS MADE IN THIS REGARD. I FI ND NO FORCE IN THE ARGUMENT OF THE APPELLANT THAT UNEXPLAINED CASH OF RS. 5 LAKH WAS INCLUDED IN THE GROSS BROKERAGE SHOWN IN THE P & L ACCOUNT. IT IS PERTINENT TO REFER TO Q/A 29 RECORDED DURING THE CO URSE OF SEARCH (REFER PG 4 OF AOS ORDER) WHERE IN THIS FACT [THAT CASH O F RS. 5 LAKH IS UNEXPLAINED] WAS ADMITTED BY THE APPELLANT. NOWHERE IN THE STATEMENT IS IT MENTIONED THAT SUCH UNEXPLAINED CASH IS PART OF THE BROKERAGE INCOME. IN FACT SUCH CASH WAS NOT REFLECTED ANYWHER E IN THE BOOKS OF ACCOUNTS. UNDER THE STATED FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT A PLEA TAKEN BY THE APPELLANT IS WIT HOUT MERIT AND IS REJECTED. APPELLANT APPEAL IN GROUND NO. 2 IS DISMI SSED. ITA NO.949/JP/2017 SHRI BAJRAN G LAL BADAYA VS ACIT, CENTRAL CIRCLE -1 ,JAIPUR 5 5.2 WE HAVE HEARD BOTH SIDES SUBMISSIONS. WE HAVE A LSO CONSIDERED VARIOUS OTHER FACTUAL ASPECTS. THE ASSESSEE HAS DIS CLOSED BROKERAGE INCOME OF RS.6.40 LACS DURING THE COURSE OF SEARCH OPERATION. HOWEVER, WHILE FILING RETURN OF INCOME, VARIOUS EXPENSES HAV E BEEN CLAIMED. ON PERUSAL OF CERTAIN DETAILS OF EXPENSES, WE FIND THA T SALARY HAS BEEN CLAIMED OF RS. 15,000/- PER MONTH AND FROM THE RECO RDS WE NOTICED THAT SALARY FOR 11 MONTHS HAVE BEEN PAID PRIOR TO THE DA TE OF SEARCH I.E. 20-03- 2014. ONLY SALARY FOR THE MONTH OF MARCH HAS BEEN P AID ON 30-03-2014 THAT IS AFTER SEARCH. THUS NO DEDUCTION CAN BE GIV EN TOWARDS SALARY EXPENSES FROM THE CASH FOUND DURING THE COURSE OF S EARCH. THE ASSESSEE HAS ADMITTED THAT THIS CASH IS UNACCOUNTED IN THE S TATEMENT RECORDED U/S 132(4) OF THE ACT WHILE ANSWERING TO QUESTION NO. 2 9. THE ASSESSEE HAS DISCLOSED THE INCOME OF RS. 3,45,940/- IN THE RETUR N OF INCOME. THUS THE ASSESSEE HAD NOT FULLY DISCLOSED INCOME EARNED IN P ERIOD PRIOR TO THE SEARCH. IN ANY CASE NET INCOME CANNOT BE LESS THAN THE CASH FOUND IN SEARCH. CONSIDERING THIS ASPECT, WE FIND THAT EVEN AFTER GIVING BENEFIT OF TELESCOPING FOR CASH AVAILABLE FROM THE BROKERAGE INCOME THEN ALSO IT SHALL BE MORE THAN THE INCOME DISCLOSED. THE SALAR Y OF RS. 1.65 LACS HAS BEEN PAID PRIOR TO THE DATE OF SEARCH. CONSIDERING THE TOTALITY OF THE FACTS ITA NO.949/JP/2017 SHRI BAJRAN G LAL BADAYA VS ACIT, CENTRAL CIRCLE -1 ,JAIPUR 6 AND CIRCUMSTANCES OF THE CASE, AT LEAST ADDITION OF RS. 3.15 LACS DESERVES TO BE SUSTAINED EVEN AFTER GIVING BENEFIT OF TELESC OPING FOR BROKERAGE INCOME. THUS GROUND NO. 3 OF THE ASSESSEE IS PARTLY ALLOWED. 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-05-2018 . SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 /05/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BAJRANG LAL BADAYA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE 1, JAI PUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.949/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR