Shri Ashokbhai Ranka, Surat V. The ACIT., Cent.Circle-3, Surat

ITSSA 104/AHD/2005

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8770 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-12-2010
• Assessment Year: misc
• Appeal Filed On: 06-04-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN VARMA
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained expenditure; Business expenditure; Search and seizure
• Section: 132

Judgement Text

IT(SS)A.104/AHD/2005 1 IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABA D (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON' BLE SHRI A.N. PAHUJA, A.M. ) I.T (SS).A. NO. 104/AHD./2005 (BLOCK PERIOD 1-4-96 TO 4-10-2002) SHRI ASHOKKUMAR N. RANKA, VS- ASSISTANT COMMISSIONER OF 201, MIDTOWN APTS. INCOME TAX, CEN TRAL CIRCLE-3, SARELAWADI, GHOD DOD ROAD, ROOM NO.5 07, AAYAKAR BHAVAN, SURAT. MAJURA GATE,SURAT. SURAT. ((PAN : ABVPR 7309 A ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K. PATEL. RESPONDENT BY : SHRI PRAVEEN VARMA, CIT (D.R.) O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATE D 9-2-2005 OF LD. C.I.T.(A)-II, SURAT FOR THE BLOCK PERIOD 1-4-1996 TO 4-10-2002. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDE R: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A)-II, AHMEDABAD HAS ERRED IN SUSTAINING THE A DDITION BY STATING TAT THE ADDITION MADE BY THE ASSESSING OFFICER ON T HE BASIS OF THE SEIZED PAPERS ARE NOT AT ALL RELATED TO THE UNDISCLOSED IN COME DECLARED BY THE APPELLANT. WHEREAS THE ASSESSEE HAS INCURRED THE UN ACCOUNTED BUSINESS EXPENDITURE AGAINST GROSS UNDISCLOSED BUSINESS INCO ME AND WE MADE A DISCLOSURE FOR NET UNDISCLOSED INCOME. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OU T ON 4-10-2002 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. THE ASSESSEE FILED HIS RETURN OF INCO ME FOR THE BLOCK PERIOD ON 11-06-2003 DISCLOSING UNDISCLOSED INCOME OF RS.3,25,000/-. IT(SS)A.104/AHD/2005 2 4. THE ASSESSING OFFICER FRAMED THE ASSESSMENT UNDE R SECTION 158BC(C) ON 29-10-2004 WHEREIN HE ASSESSED UNDISCLOSED INCOME AT RS.3,93,5 00/- INTERAIA MAKING THE ADDITION OF RS.78,500/- IN RESPECT OF SEIZED MATERIAL. THE REAS ONING GIVEN BY THE A.O. FOR MAKING THIS ADDITION IS CONTAINED IN THE PARAGRAPH 10 IN THE IM PUGNED ORDER WHICH IS REPRODUCED AS UNDER :- 10. SEIZED MATERIALS. DURING THE COURSE OF SEARCH PROCEEDINGS, ANNEXURE A TO PANCHNAMA DATED 4-10- 2002 WAS FOUND AND SEIZED. PAGE NO.9 OF SAID ANNEXU RE CONTAINS THE DETAILS OF PAYMENTS MADE OF RS.32,000/- AS UNDER :- 1996-97. RS. 14,000/- 1997-98 RS. 18,000/- --------------- RS.32,000/- ======== PAGE NO.11 OF THIS ANNEXURE CONTAINS THE DETAILS OF PAYMENT MADE TO EMPLOYEE OF RS.31,000/- AND PAGE NO.10 CONTAINS THE DETAILS OF PAYMENT OF RS.12,000/- OF 1996-97 AND RS.3,500/- OF 1997-98. THUS, THE TOTAL PAYMENTS WORK OUT TO RS.78,500/-. THE ASSESSEE WAS SHOW CAUSED VIDE THIS OFFICE LETTER DA TED 16-6-2004 TO FURNISH THE EXPLANATION WHETHER THESE TRANSACTIONS WERE REFLECT ED IN THE BOOKS OF ACCOUNT OR NOT. THE ASSESSEE VIDE HIS REPLY STATED THAT RS.63,000/- IS UNACCOUNTED PAYMENT OF THE ASSESSEE GROUP, WHICH IS COVERED IN THE DISCLOSURE OF RS.1.1 2 CRORE. HOWEVER, THE SAID UNEXPLAINED EXPENDITURE IS NOT FOUND TO BE COVERED BY THE TOTAL DISCLOSURE OF THE GROUP. THE ASSESSEE HAS ALSO ADMITTED THAT THESE EXPENSES WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. THEREFORE,RS.78,500/- IS ADDED A S UNACCOUNTED EXPENDITURE OF THE ASSESSEE FOR THE BLOCK PERIOD. 5. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. C.I.T. (A) CONFIRMED THE ADDITION OF RS.78,500/- BY OBSERVING THAT ASSESSEE COULD NOT FU RNISH SATISFACTORY EXPLANATION OF QUERY THAT WHAT WAS TURNOVER INVOLVED DURING THE YEARS FOR WHI CH INCOME WAS DISCLOSED. THE LD. C.I.T. (A) ALSO OBSERVED THAT INCOME AT THE TIME OF HEARING AS SESSEE SURRENDERED INCOME AS A RESULT OF OVERALL TURNOVER DURING THE RELEVANT PERIOD WHICH I MPLIES SET OFF OF RELEVANT EXPENSES. THE EXPENSES DEDUCTED BY THE A.O. ON THE BASIS OF SEIZE D PAPERS ARE NOT AT ALL RELATED TO THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE. HE ACC ORDINGLY, REFUSED TO ALLOW THE DEDUCTION OF RS.78,500/-. 6. AGGRIEVED WITH THE ORDER OF LD. C.I.T. (A) ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. IT(SS)A.104/AHD/2005 3 7. AT THE TIME OF HEARING ON BEHALF OF ASSESSEE SHR I M.K. PATEL, APPEARED AND CONTENDED THAT LD. C.I.T.(A) OUGHT TO HAVE ACCEPTED THE EXPLANATIO N OF THE ASSESSEE AND ALLOWED THE SET OFF OF EXPENSES. 8. ON THE OTHER HAND SHRI PRAVEEN VERMA, LD. CIT (D .R.) APPEARED FOR THE REVENUE CONTENDED THAT BEFORE BOTH THE DEPARTMENTAL AUTHORI TIES BELOW, ASSESSEE COULD NOT FURNISH THE SATISFACTORY EXPLANATION. THEREFORE, THE ADDITION O F RS.78,500/- SUSTAINED BY THE LD. C.I.T. (A) BE UPHELD. 9. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT DURING THE COUR SE OF SURVEY, ANNEXURE A TO PANCHNAMA DATED 04.10.2002 WAS FOUND AND SEIZED. PAGE NOS. 9 AND 11 OF THE SAID ANNEXURE CONTAINED DETAILS OF PAYMENTS, WHICH ARE NOT REFLECTED IN THE BOOKS OF A CCOUNTS. BEFORE THE ASSESSING OFFICER, VIDE HIS REPLY, THE ASSESSEE STATED THAT RS.63,000/- IS UNACCOUNTED PAYMENT OF THE ASSESSEE GROUP, WHICH IS COVERED IN THE DISCLOSURE OF RS.1.12 CRORE . THE ASSESSING OFFICER FOUND THE SAID UNEXPLAINED EXPENDITURE AS NOT COVERED BY THE TOTAL DISCLOSURE OF THE GROUP. HE ACCORDINGLY MADE THE ADDITION OF RS.78,500/- AS UNACCOUNTED EXP ENDITURE OF THE ASSESSEE FOR THE BLOCK PERIOD. NEITHER BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) NOR BEFORE US, THE ASSESSEE COULD FURNISH HOW THE EXPENDITURE OF RS.78 ,500/- IS COVERED BY THE DISCLOSURE MADE BY THE GROUP FOR THE BLOCK PERIOD. WE ARE, THEREFORE, OF THE VIEW THAT THE ADDITION OF RS.78,500/- WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER. WE, THEREFORE, DECLINE TO INTERFERE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. THE ORDER SIGNED AND PRONOUNCED IN THE COURT ON 10 .12.2010 SD/- SD/- (A.N. PAHUJA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 / 12 / 2010 IT(SS)A.104/AHD/2005 4 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR, ITAT, AHMEDABAD.