Umesh Kumar Dokania (HUF), Burdwan V. DCIT, Central Circle - III, Kolkata, Kolkata

ITSSA 106/KOL/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7441 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 06-09-2011
• Court: TRIBUNAL
• Department Lawyers: ANJAN PD ROY
• Assessee Lawyers: S S GUPTA
• Keywords: Search and seizure; Document seized; Block assessment; Documents seized
• Section: 153A; 234B; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE . .. . , ,, , , SHRI N.VIJAYAKUMARAN, JUDICIAL MEMBER. ! ! ! ! /AND . .. .'# '#'# '#. .. . , $% SHRI C.D.RAO, ACCOUNTANT MEMBER !& !& !& !& / IT(SS)A NO . 106/KOL/2011 '( )*/ ASSESSMENT YEAR : 2003-04 (,- / APPELLANT ) UMESH KUMAR DOKANIA, (HUF) BURDWAN (PAN:AAAHU 5322 H) (./,-/ RESPONDENT ) D.C.I.T.-CENTRAL CIRCLE- III, KOLKATA ,- 0 1 $/ FOR THE APPELLANT: SHRI S.S.GUPTA ./,- 0 1 $/ FOR THE RESPONDENT: SHRI ANJAN PD.ROY 2 0 #% /DATE OF HEARING : 21.02.2012. 3) 0 #% /DATE OF PRONOUNCEMENT : 04.04.2012. $4 / ORDER . .. .'# '#'# '#. .. . , $% PER SHRI C.D.RAO, AM THE ABOVE APPEAL IS FILED BY ASSESSEE AGAINST ORDER DATED 08.07.2011 OF THE LD. CIT(A)-CENTRAL-I, KOLKATA PERTAINING TO A.YR. 2003 -04. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS :- 1. THAT THE LD. AO ERRED IN LAW AS WELL AS IN FACT S IN PASSING THE ORDER U/S. 153C/143(3) OF THE INCOME TAX ACT, 1961 BY ASSESSIN G THE TOTAL INCOME AT RS. 16,35,530/- AS AGAINST THE RETURNED TOTAL INCOME OF RS. 1,42,240/- AND THE LD. C.I.T. (A) ERRED IN CONFIRMING THE SAME. 2. THAT THE LD. AO ERRED IN LAW AS WELL AS IN FACTS IN MAKING ADDITION OF RS. 14,93,290/- ON ACCOUNT OF ALLEGED DIFFERENCE IN BRO UGHT FORWARD CAPITAL BALANCE IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE NO SUCH ADDITION WAS AT ALL CALLED FOR AND THE LD. C.I.T. (A) ERRED IN CONF IRMING THE SAME. 2 3. THAT THE LD. C.I.T. (A) WRONGLY INTERPRETED THE PROVISIONS ON SECTION 292 C OF THE INCOME TAX ACT, 1961 TO THE ADVANTAGE OF THE REVENU E. 4. THAT THE LD. AO ERRED IN LAW AS WELL AS IN FACTS IN NOT ALLOWING REBATE U/S. 88 AMOUNTING TO RS.15,000/- AS CLAIMED BY THE APPELLAN T IN ITS RETURN OF INCOME IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE SUCH REBATE WAS ADMISSIBLE AND THE LD. C.I.T. (A) ERRED IN CONFIRMING THE SAME . 5. THAT THE LD. AO ERRED IN LAW AS WELL AS IN FACTS IN LEVYING INTEREST U/S. 234 B OF THE INCOME TAX ACT, 1961 AT RS.3,92,464/- IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE NO SUCH INTEREST WAS AT A LL CHARGEABLE AND THE LD. C.I.T. (A) ERRED IN CONFIRMING THE SAME. 3. THE BRIEF FACTS OF THIS CASE ARE THAT WHILE DOI NG THE SCRUTINY ASSESSMENT ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS.14,93,2 90/- BY OBSERVING AS UNDER :- 7. UNDISCLOSED INCOME OF RS. 14,93,290/-: IN THE BALANCE SHEET ENCLOSED WITH THE ORIGINAL RET URN FOR THE A.Y. 2003-04 U/S 139 ON 15/03/2004, THE BROUGHT FORWARD CAPITAL BALANCE WAS SHOWN AT RS.15,85,996.20 BUT IN THE BALANCE SHEET ANNEXED TO THE RETURN FILED U/S 1 53A AFTER SEARCH THE BROUGHT FORWARD CAPITAL BALANCE HAS BEEN SHOWN AT RS.30,59,26.9O. THUS THE BROUGHT FORWARD CAPITAL BALANCE HAD BEEN ENHANC ED BY RS.14,93,290/-. THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY THE DIFFERENCE AMOUNT OF RS.14,93,290/ SHOULD NOT BE ADDED AS UNDISCLOSED INCOME VIDE LETTER DATE D 18/11/2010 SERVED ON THE SAME DAY. THE ASSESSEE FILED A WRITTEN REPLY. THE GIST O F ITS CONTENTIONS IS AS UNDER:- (I) THE SEIZED DIARY MARKED UKDT-8, PAGES 1 TO 42, CONTAINS ENTRIES FROM 1/1/2001 TO 20/02/2001 (II) AFTER CONSIDERING THE ENTRIES WHICH WERE NOT R ECORDED IN THE REGULAR BOOKS OF A/C. REVISED BALANCE SHEETS HAVE BEEN PREPARED RIGHT FRO M A.Y.2001-02. (II)THE DIFFERENCE IN OPENING BALANCE IS DUE TO TRA NSACTIONS CARRIED OUT IN FY 2000-01 RELEVANT TO A.Y.2001-02. III) DUE TO PROVISIONS OF SECTIONS 132(1A) AND 292C . IT CAN BE PRESUMED THAT THE TRANSACTIONS TOOK PLACE IN F.Y.2000-01. IV) THE SEIZED DOCUMENTS HAVE TO BE CONSIDERED IN T OTALITY. THE ASSESSEE HAS RELIED ON THE FOLLOWING DECISIONS :- 289 ITR (AT) 50 (PUNE) DHANBARSHA BUILDERS & DEV ELOPERS P. LTD. 64 TTJ 327 (PUNE) CHANDER MOHAN MEHTA 94 TTJ (VISHAKA) 885,887 SMT. BOMMANA SWARNAREKHA 55 LTD (NAG) 734,737 SANMUKHDAS WADHAIN 22 CTR 258 (RAJ) SATYENDRA KUMAR DOSHI. THE EXPLANATIONS OF THE ASSESSEE HAVE BEEN EXAMINED AND CONSIDERED BUT IT IS FOUND THAT THE SAME ARE NOT REASONABLE OR TENABLE. THE AS SESSEE HAS STATED IN THE DISCLOSURE PETITION THAT THE DIARY CONTAINS NET RECEIPTS AND P AYMENTS AND THE DIFFERENCE IS INCOME FROM TRANSPORTATION CHARGES AND OTHERS. INCOME OF R S.13,73,290/- OUT OF RECEIPT OF RS,34,03,900/- IS VERY HIGH AND IMPROBABLE FROM TRA NSPORTATION. BESIDES, THE RELEVANT SEIZED DOCUMENT DOES NOT CONTAIN ANYTHING TO CLEARL Y SHOW ANY SUCH PROFIT/INCOME AS CONTEMPLATED OR THE SAID PROFIT/INCOME REMAINING IN THE FORM OF CASH AND OTHERS. THE ALLEGED INCOME, IF ANY, WAS NOT DISCLOSED EARLIER. SEARCH AND SEIZURE OPERATION OR ASSESSMENT U/S.153A IS NOT FOR ANY BENEFIT OF THE A SSESSEE, AS IS BEING CLAIMED. THE ASSESSEE HAS REVISED THE BALANCE SHEETS IN THE RETU RNS FILED U/S 153A INCLUDING SUCH UNDISCLOSED INCOME OF EARLIER YEAR TO HAVE ADVANTAG E OF EXPLAINING SOURCES OF UNDISCLOSED NSCS PURCHASED DURING F.YRS.2002-03, 20 03-04, 2005-06 AND 2006-07 TOTALING TO RS.3,79.000/- AND ALSO INVESTMENTS MOST LY IN A.Y.2009-10 OUT OF CASH 3 BALANCE AND OTHERS SHOWN IN THE REVISED BALANCE SHE ETS. EXISTENCE OF SUCH INCOME IN THE FORM OF CASH AND OTHERS IS HIGHLY IMPROBABLE. T HE DETAILS OF OTHERS HAVE NOT BEEN FILED OR EXPLAINED. DECISIONS OF THE CASES RELIED U PON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS. BESIDES, THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IS IN RESPECT OF PENALTY U/S. I58BFA(2). IN THE FACTS AND CIRCUMSTANCES, THE EXPLANATIONS OF THE ASSESSEE ARE REJECTED AND THE DIFFERENCE OF RS. 14,93,290/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE FOR THE A.Y. 2003-04. IN VIEW OF THIS ADDITION, NO SEPARATE ADDITION IS BEING MADE IN RESPECT OF UNDIS CLOSED NSCS AND OTHER INVESTMENTS MADE IN SUBSEQUENT YEARS OUT OF SUCH UNDISCLOSED IN COME OF EARLIER YEAR AS CAPITALIZED. AND HE FURTHER HAS NOT ALLOWED REBATE U/S 88 OF THE IT ACT. 3.1. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE ACT ION OF AO AND ADDITION OF CASH IN HAND BY OBSERVING AS UNDER :- 3.5 MOREOVER FROM THE TRANSACTION RECORDED IN THE SEIZED IT IS APPARENT THAT IT DOESNT PERTAINS TO ANY TRADING OR MANUFACTURING BUSINESS C ARRIED OUT BY THE ASSESSES FROM THE VERY NARRATION OF THE CASH RECEIVED AND PAID IT IS APPARENT THAT THE DAIRY CONTAINS TRANSACTION RELATING TO THE CASH RECEIVED AND REFUN DED BACK FROM CERTAIN PARTIES HENCE IT APPEARS THAT THE SEIZED DAIRY CONTAINS THE UNDIS CLOSED CASH LOAN TAKEN AND REFUNDED BY THE ASSESSEE DURING CERTAIN PERIOD. HENCE DIFFER ENCE OF THE SAME BY NO STRETCH OF IMAGINATION CAN BE HELD TO BE INCOME OF THE ASSESSE E . HENCE TAKING ALL THE FACTS INTO ACCOUNT , IT IS HELD THAT THE A.O HAS RIGHTLY REJEC TED THE CLAIMS OF THE ASSESSEE THAT THE ADDITIONAL CASH IN HAND OF RS. 14,93,290/- SHOWN AS OPENING CAPITAL BALANCE FOR THE YEAR UNDER CONSIDERATION WAS THE UNDISCLOSED INCOME EARNED DURING THE A.Y 2001-02 ACCORDINGLY GROUND NO 2 TAKEN BY THE APPELLANT IS D ISMISSED. 3.2. AS REGARDING THE DENIAL OF ALLOWANCES U/S 88 O F THE IT ACT THE LD. COUNSEL APPEARING ON BEHALF OF ASSESEE THE LD. CIT(A) HAS O BSERVED THAT THIS GROUND IS CONSEQUENTIAL IN NATURE TO THAT OF THE ONE WHICH RE LATES TO ADDITION OF RS.14,93,290/-. SINCE HE HAS DECIDED THE SAME AGAINST ASSESSEE HE D ISMISSED THIS GROUND ALSO BY STATING THE SAME AS CONSEQUENTIAL IN NATURE. 3.3. AS REGARDING THE THIRD GROUND WHICH RELATES T O LEVYING OF INTEREST U/S 234B OF THE IT ACT ALSO THE LD. CIT(A) HAS DISMISSED BY STA TING THAT IT IS CONSEQUENTIAL IN NATURE AND SINCE HE HAS DISMISSED THE FIRST TWO ISS UES OF THE APPEAL THE LEVY OF INTEREST U/S 234B OF THE IT ACT IS ALSO CONFIRMED. 3.4. AGGRIEVED BY THIS NOW THE ASSESSEE IS IN APPEA L BEFORE US. 4 4. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L APPEARING ON BEHALF OF ASSESSEE BY POINTING OUT THE DISCLOSURE PETITION DA TED 13.01.2009, XEROX OF SEIZED DIARY-UKDT/8 AND DETAILS/BASIS OF RS.14,93,290/- WH ICH WAS PLACED IN THE PAPER BOOK ESPECIALLY BY POINTING OUT PAGE 30 IN THE CASE OF D ISCLOSURE PETITION , PAGE-55 IN RESPECT OF SEIZED DIARY AND PAGE-77 IN RESPECT OF D ETAILS OF RS.14,93,290/- SUBMITTED THAT THE REVENUE IS NOT JUSTIFIED IN ADDING THE DIF FERENCE OF OPENING OF CASH BALANCE WHICH HAS BEEN ADJUSTED IN THE OPENING CAPITAL SINC E IT IS BEYOND THE BLOCK PERIOD AS SPECIFIED IN SECTION 153A & 153C OF THE IT ACT. THE REFORE HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DIRECT TO DELETE THE ADDITIONS MADE. HE FURTHER RELIED ON THE ORDER OF AMRITSAR BENCH OF IT AT IN THE CASE OF S.JASWANT SINGH CHEEMA VS ITO REPORTED IN 143 TTJ (ASR)(UO)41. 5. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE BY POINTING OUT THE OBSERVATIONS OF AO SUBMITTED THAT THOUGH TH ERE ARE SEVERAL INVESTMENTS SUCH AS NSCS AND OTHER INVESTMENTS DURING THE BLOCK PERI OD SINCE THE AO HAS ADDED AN AMOUNT OF RS.14,93,290/- NO SEPARATE ADDITION IS BE ING MADE IN RESPECT OF NSC AND OTHER INVESTMENTS. IF THE CONTENTION OF THE ASSESSE E IS TAKEN INTO CONSIDERATION HE REQUESTED THAT THE MATTER MAY BE SET ASIDE TO THE F ILE OF AO TO ASSESS THE UNDISCLOSED INCOME FROM THE SEIZED DOCUMENTS DURING THE BLOCK P ERIOD AS SPECIFIED UNDER THE PROVISION OF SECTIONS 153A & 153C OF THE IT ACT. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT THE AO HAS POINTED OUT THAT THERE ARE SOME UNDISCLOSED NSCS DURING THE FINANCIAL YEARS 2002-03 , 2003-04, 2005-06 AND 2006-07 TOTALLING TO RS.3,79,000/- AND ALSO INVESTMENTS MOS TLY IN A.YR. 2009-2010 AND THE SAME HAS BEEN EXPLAINED BY THE ASSESSEE BY THE UNDI SCLOSED INCOME PRIOR TO THE BLOCK PERIOD. THEREFORE THE AO IGNORING THE UNDISCLOSED I NCOME WHICH FALLS WITHIN THE BLOCK PERIOD AND ADDED THE EXPLANATION GIVEN BY THE ASSESSEE FROM THE SAME SEIZED DOCUMENTS BEYOND THE BLOCK PERIOD AND ADDED THE DIF FERENCE OF THE OPENING CAPITAL AS UNDISCLOSED WHICH IN OUR CONSIDERED OPINION IS NOT IN ACCORDANCE WITH LAW. THEREFORE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND RESTORE THE MATTER 5 BACK TO THE FILE OF AO TO RE-DECIDE THE ISSUE AFRES H BY ASSESSING THE UNDISCLOSED INVESTMENTS PERTAINING TO THE BLOCK PERIOD (NSCS AN D OTHER INVESTMENTS) U/S 153A & 153C OF THE IT ACT. IN OUR CONSIDERED OPINION THERE IS NO BAR ON THE PART OF THE ASSESSEE TO EXPLAIN SUCH INVESTMENTS FROM THE UNDIS CLOSED INCOME EVEN BEYOND THE PERIOD OF BLOCK ASSESSMENT IF THE SAID INCOME IS FO UND IN THE SAME SEIZED DOCUMENTS. WE ORDER ACCORDINGLY. 6.1. SINCE WE HAVE SET ASIDE THE MAIN ISSUE TO THE FILE OF AO THE OTHER GROUNDS RAISED BY ASSESSEE ARE IN CONSEQUENTIAL AND AO WILL DO THE CONSEQUENTIAL EFFECT AS PER LAW. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 04.04.2012. SD/- SD/- . .. . , ,, , ' ' ' ' N.VIJAYAKUMARAN, JUDICIAL MEMBER . .. .'# '#'# '#. .. . , , , , $% $% $% $% , C.D.RAO, ACCOUNTANT MEMBER. ( (( (#% #% #% #%) )) ) DATE: 04.04.2012. R.G.(P.S.) ORDER PRONOUNCED BY SD/- SD/- MS CDR (JM) (AM) $4 0 .'' 5$)6- COPY OF THE ORDER FORWARDED TO: 1. UMESH KUMAR DOKANIA (HUF),61/29/N-3, N.S.B.ROAD, RA NIGANJ-713347, DIST.BURDWAN. (WB). 2 D.C.I.T., CENTRAL CIRCLE-III, KOLKATA. 3. THE C.I.T. 4. CIT(A)-CENTRAL-I, KOLKATA 5. THE CIT(DR), KOLKATA BENCHES, KOLKATA / .'/ TRUE COPY, $4/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES 6