DCIT, Jaipur V. RADHA GOVIND BUILD ESTATE P LTD., Jaipur

ITA 957/JPR/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4825 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DHK
• Keywords: Loose papers; Document seized; Retraction; Documents seized
• Section: 143(3); 133A; 147; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPU R BENCHES, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 957/JP/12 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE DCIT, CIRCLE-3, JAIPUR CUKE VS. M/S RADHA GOVIND BUILD ESTATE PVT. LTD. GANESHAM TOWER, G- 4, AMRAPALI CIRCLE, VAISHALI NAGAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADCR 0186 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI ( CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15.12.2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/12/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-I, JAIPUR DATED 19.10.2012 FOR AY 2009-10 WHEREIN THE REVENUE HAS TAKEN FOLLOWING GROUND OF APPEAL: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 3,35,31,259/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E ENGAGED IN THE BUSINESS OF REAL ESTATE HAD FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING NIL INCOME. ON 18.11.2009, A SURVEY U/S 133A OF TH E IT ACT, 1961 WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY AND S TATEMENTS OF THE DIRECTOR OF ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 2 ASSESSEE COMPANY I.E. SHRI RAMESH CHAND DANGAYACH W ERE RECORDED ON OATH DURING THE COURSE OF SURVEY AND SEVERAL LOOSE/ROUGH PAPERS WERE FOUND AND IMPOUNDED. SUBSEQUENTLY, ASSESSMENT WAS COMPLETED U/S 143(3) O F THE IT ACT, 1961 AT TOTAL INCOME OF RS. 3,55,31,260/- BY MAKING ADDITION OF R S. 3,55,31,259/- ON THE BASIS OF ADMISSION OF ONE OF THE DIRECTORS OF ASSESSEE COMPA NY DURING THE COURSE OF SURVEY AND IGNORING THE CONTENTION OF THE ASSESSEE THAT NO NE OF THE PAPERS FOUND AND IMPOUNDED DURING THE COURSE OF SURVEY PERTAINED TO THE YEAR UNDER APPEAL AND THEREFORE, NO ADDITION ON BASIS OF SUCH PAPERS COUL D HAVE BEEN MADE IN THE YEAR UNDER APPEAL. 2.1 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE HER IMPUGNED ORDER D ATED 19.10.2012 IN ITA NO. 585/11-12 PARTLY ALLOWED THE APPEAL OF ASSESSEE AND DELETED THE ENTIRE ADDITION OF RS 3,55,31,260 AFTER NOTING THE FACT THAT NONE OF T HE PAPERS FOUND DURING THE COURSE OF SURVEY PERTAINED TO THE ASSESSMENT YEAR UNDER AP PEAL, THEREFORE, NO ADDITION COULD HAVE BEEN MADE ON THE BASIS OF SUCH PAPERS IN THE YEAR UNDER APPEAL. AGAINST THE ORDER OF THE LD CIT(A), THE REVENUE IS IN APPEA L BEFORE US. 3. BEFORE WE PROCEED TO CONSIDER THE ARGUMENTS OF B OTH OF THE PARTIES, IT WOULD BE RELEVANT TO REFER TO THE RELEVANT FINDINGS OF TH E LD. CIT(A) WHICH ARE REPRODUCED AS UNDER: 7. REGARDING THE SUBMISSION THAT THE STATEMENT REC ORDED U/S 133A IS NOT EVIDENCE AND THAT THE RETRACTION OF THE ASSESSEE IS JUSTIFIED. I DO NOT CONCUR WITH THE SUBMISSION. IT IS USUAL PRACTICE T O CLAIM THAT THE ASSESSEE WAS FRIGHTENED OR UNDER STRESS AT THE TIME OF RECOR DING THE STATEMENTS. IN FACT, ON PERUSAL OF THE STATEMENT IT IS SEEN THAT F ROM THE VERY BEGINNING HE WAS TRYING TO MISLEAD THE PERSONNEL OF THE DEPARTM ENT BY STATING THAT THE BOOKS OF ACCOUNTS OF THE COMPANY WERE WITH HIS ACCOUNTANT. WHEN THE ACCOUNTANT WAS CONTACTED ON PHONE HE COMPLETELY DEN IED HAVING THE BOOKS OF ACCOUNTS OF THE COMPANY. WHEN CONFIRMED WITH TH IS INFORMATION MR. DANGAYACH FAMILY BROUGHT ALL THE PAPERS PERTAINING TO THE LAND TRANSACTION OF THIS COMPANY FROM HIS RESIDENCE. SIMILARLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS HE REFUSED TO TAKE THE NOTICES AND DELA YED FILING SUBMISSIONS BY ONE AND A HALF MONTHS AND THUS TRIED TO OBSTRUCT TH E COURSE OF JUSTICE IN DETERMINING THE CORRECT INCOME. ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 3 THIS COURSE OF ACTION HARDLY INDICATES A PERSON OPE RATING UNDER FRIGHT OR STRESS . GIVEN THE SPECIFIC EVIDENCE FOUND/BROUGHT BY HIM BY WAY OF PAPERS AND HIS DETAILED EXPLANATION OF THE NOTINGS THEREIN IT BECOMES VERY CLEAR THAT UNACCOUNTED TRANSACTION OF PURCHASE AND SALE OF LAN D HAD BEEN UNDERTAKEN BY THE COMPANY IN THE PAST SEVERAL YEARS AND A RECO RD OF THIS HAD BEEN KEPT BY HIM IN HIS PERSONAL CUSTODY. THEREFORE THE STAT EMENTS OF THE DIRECTOR MADE ON THE BASIS OF THE PAPERS IS HELD TO BE VALID EVIDENCE IN SO FAR AS HIS EXPLANATION REGARDING THESE TRANSACTION IS CONSIDER ED. HOWEVER, SINCE HE DID NOT HAVE KNOWLEDGE OF THE IT LAW THE SURRENDER WAS MADE IN ONE A.Y ONLY, RATHER THAN IN RESPECTIVE A.YS IN WHICH THE TRANSAC TIONS TOOK PLACE. ON PERUSAL OF ALL THE PAPERS IT WAS SEEN THAT ONLY PAGE 56 HAS THE DATE 25.02.2009 MENTIONED ON IT AND SEEMS TO BE AN ACCOU NT OF SHRI RAMESH DANGAYACH REGARDING PAYMENT OF CAR LOANS, TDS CERTI FICATES ETC. THIS DOES NOT SEEMS TO HAVE BEEN FINANCIAL IMPLICAT IONS AS FAR AS THE INCOME OF THE APPELLANT COMPANY IS CONCERNED. A CHART HAS BEEN PREPARED REGARDING THE DATES OF THE PAGES IMPOUNDED AND THE A.YS TO WHICH THEY PERTAIN. THE AO MAY CONSIDER TAKING NECESSARY ACTION IN THE RESP ECTIVE A.YS AS PER ANNEXURE-D TO THIS ORDER AFTER DUE VERIFICATION OF ALL THE FACTS ON RECORD AND EVIDENCE FILED BY THE AR IN VIEW OF THE ABOVE OBSER VATIONS. CONSIDERING THAT THE PAYMENTS OF PURCHASE OF LAND W ERE NOT MADE IN THIS YEAR AS PER THE EVIDENCE BY WAY OF PAPERS IMPOUNDED DURING THIS A.Y. NOR WERE ANY PAPERS SHOWING RECEIPTS DURING A.Y. 2009-1 0 ON SALE OF THESE PLOTS FOUND DURING THE COURSE OF SURVEY THE ADDITION OF R S.3,55,31,259/- MADE IN THIS A.Y. IS DELETED. 4. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AD DITION MADE BY THE AO WERE SOLELY BASED ON THE ADMISSION OBTAINED DURING THE C OURSE OF SURVEY ON THE BASIS OF ROUGH ENTRIES APPEARING ON THE LOOSE PAPERS FOUND A ND IMPOUNDED DURING THE COURSE OF SURVEY. HOWEVER, THE LD. AO HAS COMPLETE LY BRUSHED ASIDE THE CRUCIAL FACT THAT NONE OF THE LOOSE PAPER SO FOUND PERTAINED TO THE YEAR UNDER APPEAL. THAT IS TO SAY, THAT NONE OF THE ALLEGED TRANSACTIONS OF PURC HASE/SALE ALLEGEDLY FOUND NOTED ON SUCH PAPERS TOOK PLACE DURING THE FINANCIAL YEA R 2008-09 RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL I.E. A.Y. 2009-10 AND THAT BEING SO, NO ADDITION ON THE BASIS OF SUCH PAPERS COULD HAVE BEEN MADE IN T HE YEAR UNDER APPEAL. IT IS SUBMITTED THAT NOT A SINGLE TRANSACTION OF ALLEGED PURCHASE/SALE OF LAND HAS TAKEN PLACE IN THE YEAR UNDER APPEAL AS PER THE PAPERS FO UND AND IMPOUNDED. ON MOST OF THE PAPERS FOUND, DATES HAVE CLEARLY BEEN SPECIFIED AND THE SAME DO NOT FALL WITHIN THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDE R APPEAL. IN CASE OF UNDATED ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 4 PAPERS WITHOUT PREJUDICE TO THE MERITS OF THE CASE, IT IS SUBMITTED THAT ADDITION COULD HAVE BEEN ONLY IN THE YEAR IN WHICH SURVEY TOOK PLA CE SINCE IT CANNOT BE ASCERTAINED AS TO WHICH YEAR THEY PERTAIN. HOWEVER THE LD. AO HAS MADE THE ADDITION IN THE YEAR UNDER APPEAL MERELY ON THE GROUND THAT IN THE STATEMENTS OF DIRECTOR OF ASSESSEE COMPANY SHRI RAMESH CHAND DANGAYACH RECORD ED DURING THE COURSE OF SURVEY, THE ABOVEMENTIONED AMOUNT HAS BEEN ADMITTED AS UNDISCLOSED INCOME OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. IN THIS REGARD IT IS SUBMITTED THAT ADMISSION HAS BEEN OBTAINED BY THE D IRECTOR IN THE YEAR UNDER APPEAL WITHOUT REFERRING TO THE BOOKS OF ACCOUNTS MAINTAIN ED IN THE REGULAR COURSE AND ON THE BASIS OF SUCH STATEMENTS, ADDITION COULD NOT HA VE BEEN MADE IN THE YEAR UNDER APPEAL IN AS MUCH AS THE STATEMENTS ARE IN CONTRADI CTION TO THE LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY WHERE THE DATES MENTION ED DO NOT PERTAIN TO THE YEAR UNDER APPEAL. THESE FACTS WERE CONSIDERED BY THE L D. CIT(A) WHO AFTER APPRECIATING THE SAME DELETED THE ENTIRE ADDITIONS. A BARE PERU SAL OF THE ABOVE OBSERVATIONS OF LD. CIT(A) WOULD CLEARLY SHOW THAT THE ORDER OF LD. CIT(A) IS VERY WELL REASONED ORDER, PASSED AFTER THE DUE EXAMINATION OF ACTUAL F ACTS AND CIRCUMSTANCES OF THE CASE AND AFTER GIVING DUE REGARD TO THE ESTABLISHED LAW AND THUS, LEAVES NO SCOPE FOR INTERFERENCE ON ANY GROUNDS. 4.1 THE LD AR FURTHER SUBMITTED THAT AS PER THE DIR ECTIONS GIVEN BY THE LD. CIT(A), THE ASSESSMENT FOR A.Y. 2006-07 TO 2008-09 WERE REO PENED AND ASSESSMENT ORDERS STOOD PASSED, COPY OF RE-ASSESSMENT ORDER FOR A.Y. 2006-07 AND A.Y. 2010-11 HAVE ALREADY BEEN SUBMITTED BEFORE THE HONBLE BENCH. F URTHER THE ORDERS PASSED FOR A.Y. 2007-08 AND 2008-09 ARE SUBMITTED HEREWITH FOR READY REFERENCE AND RECORD. 4.2 FURTHER, A CHART CONTAINING THE YEAR-WISE ADDIT IONS MADE IN SUCH REASSESSMENT / ASSESSMENT ORDERS WHICH ARE BEING MA DE ON THE BASIS OF STATEMENTS RECORDED AND THE PAPERS IMPOUNDED DURING THE SURVEY AS AGAINST THE ADDITION OF RS. 3,55,31,259/- MADE IN THE YEAR UNDER APPEAL (BASED ON THE ALLEGED ADMISSION BY ONE OF THE DIRECTOR OF APPELLANT COMPANY SHRI RAMES H DANGAYACH) IS SUBMITTED AS UNDER: ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 5 A.Y. ADDITION MADE REMARKS 2006-07 2,00,000.00 ORDER U/S 147 / 144 OF THE INCOME TAX ACT, 1961 2007-08 1,03,35,750.00 ORDER U/S 148 / 147 OF THE INCOME TAX ACT, 1961 2008-09 3,62,32,413.00 ORDER U/S 147 / 143(3) OF THE INCOME TAX ACT, 1961 2010-11 17,25,36,322.00 ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 21,93,02,485.00 FROM THE PERUSAL OF THE CHART ABOVE, YOUR HONOURS W OULD APPRECIATE THE FACT THAT AS AGAINST THE ADDITION OF RS. 3,55,31,259/- MADE AS A RESULT OF SURVEY IN THE YEAR UNDER APPEAL, TOTAL ADDITION OF RS. 21,93,02,485/- STOOD MADE IN VARIOUS ASSESSMENT YEARS BASED ON THE SAME SET OF PAPER BY MAKING ASSU MPTIONS AND PRESUMPTIONS AS PER THE SWEET WILL OF THE ASSESSING AUTHORITIES. 4.3 IT WAS FURTHER SUBMITTED THAT BESIDES THESE ASS ESSMENT / REASSESSMENTS, ADDITIONS OF AROUND RS. 10.00 CRORES WERE ALSO MADE IN THE HANDS OF THEIR DIRECTORS NAMELY SHRI RAMESH DANGAYACH, SHRI LAXMI RAM KHANDE LWAL AND SHRI GIRRAJ AGARWAL BASED ON THE SAME ENTRIES CONTAINED IN THE PAPERS WHICH WERE IMPOUNDED DURING THE SURVEY AND CONSIDERED IN COMPANY IN VARI OUS ASSESSMENT YEARS. ALL SUCH ORDERS ARE CHALLENGED BEFORE LD. CIT(A) AND THE SAM E HAVE NOT YET BEEN DECIDED. 4.4 IT WAS FINALLY SUBMITTED THAT BASED ON THE DIRE CTIONS OF LD. CIT(A), DEPARTMENT HAS ALREADY TAKEN APPROPRIATE ACTIONS U/S 148 AND C OMPLETED THE ASSESSMENT AFTER CONSIDERING THE LOOSE PAPERS IN RESPECTIVE ASSESSME NT YEARS TO WHICH THE ENTRIES ARE ACTUALLY BELONGED THUS THERE SHOULD NOT BE ANY GRIE VANCE TO THE DEPARTMENT IN RESPECT TO THE DELETION MADE IN THE YEAR UNDER APPE AL. 5. THE LD CIT DR HAS VEHEMENTLY ARGUED THE MATTER A ND TOOK US THROUGH THE STATEMENTS RECORDED DURING THE COURSE OF SURVEY, VA RIOUS SEIZED DOCUMENTS AND THE ASSESSMENT ORDER TO ESTABLISH THAT THE IMPUNGED ADD ITION MADE BY THE AO AMOUNTING TO RS 3,55,31,259 IN RESPECT OF UNEXPLAIN ED INVESTMENT IN PURCHASE OF LAND AND PROFIT ON SALE OF LAND PERTAINS TO THE YEA R UNDER CONSIDERATION. ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 6 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION RELATES TO A DDITION MADE BY THE AO AMOUNTING TO RS 1,00,00,000 IN RESPECT OF UNEXPLAIN ED INVESTMENT IN PURCHASE OF LAND AND RS 2,55,31,259 TOWARDS PROFIT ON SALE OF L AND AND WHETHER THE SAME PERTAINS TO THE YEAR UNDER CONSIDERATION OR NOT. T HE CONTENTION OF THE LD AR IS THAT THE SUBJECT TRANSACTIONS OF PURCHASE AND SALE OF LA ND DOESNT BELONG TO THE IMPUNGED YEAR UNDER CONSIDERATION AND BASED ON THE DIRECTIONS OF LD. CIT(A), DEPARTMENT HAS ALREADY TAKEN APPROPRIATE ACTIONS U/ S 148 AND COMPLETED THE ASSESSMENT AFTER CONSIDERING THE LOOSE PAPERS IN RE SPECTIVE ASSESSMENT YEARS TO WHICH THESE ENTRIES ACTUALLY BELONGS. FURTHER, THE DETAILS OF OTHER ASSESSMENT YEARS WHERE THE ADDITIONS WERE MADE BASED ON THE SAME SET OF LOOSE PAPERS WERE SUBMITTED BEFORE THE BENCH. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, IT WOULD BE APPROPRIATE IF THE MATTER IS REMANDED BACK TO THE FILE OF THE AO TO EXAMINE AND VERIFY THE SAID C ONTENTION OF THE LD AR. THE AO WILL VERIFY WHETHER THE ADDITIONS MADE IN THE SUBJE CT ASSESSMENT YEAR IN PURCHASE AND SALE OF LAND TOTALLING TO RS 3,55,31,259 HAS BE EN BROUGHT TO TAX IN OTHER ASSESSMENT YEARS OR NOT. WHERE THE SAME HAS BEEN B ROUGHT TO TAX, THE APPELLANT DESERVE THE NECESSARY RELIEF AS THE SAME TRANSACTIO NS CANNOT BE BROUGHT TO TAX TWICE. IN LIGHT OF ABOVE, GROUND TAKEN BY THE REVE NUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/12/ 2016. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 23/12/2016 ITA NO. 957/JP/12 DCIT, CIRCLE-3, JAIPUR VS. M/S RADHA GOVIND BUILD E STATE PVT. LTD. JAIPUR 7 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CIRCLE-3, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S RADHA GOVIND BUILD ESTATE PVT. LTD. JAIPUR 3. VK;DJ VK;QDR@ CIT I, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 957/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.