Chittusing M.Chauhan, SILVASSA V. The ACIT.,Cent.Circle-2, Surat

ITSSA 113/AHD/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9426 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-05-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 13-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI
• Assessee Lawyers: HARIK VORA
• Keywords: Loose papers
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER IT(SS)A NO. 113 & 114/AHD/2009 A.Y: 2003-04 & 2007-08 CHITTUSINH M. CHAUHAN, AVDHESH MANSION, PWD ROAD SILVASSA. U.T. OF DADRA & NAGAR HAVELI PAN: ABNPC6044J VS ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, ROOM NO.504, AAYAKAR BHAVAN, SURAT- 1 (APPELLANT) (RESPONDENT) REVENUE BY : SHRI D.C. PATWARI, ASSESSEE(S) BY : SHRI HARIK VORA / // / DATE OF HEARING : 13/08/2013 / DATE OF PRONOUNCEMENT: 14/08/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE ARISING FROM THE CONSOLIDATED ORDER OF LEARNED CIT(A)-II, AHMEDABAD DATED 7.8.2009. WE SHALL FIRST TAKE UP THE APPEAL FOR A.Y. 2003-04. A. FOR A.Y. 2003-04 (ITA NO.113/AHD/2009) 2. GROUNDS RAISED ARE AS FOLLOWS: THE ORDER OF ASSESSMENT IS CONTRARY TO THE FACTS A ND PREJUDICIAL TO THE APPELLANT. 02. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE DISALLOWANCES MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CO NTRARY TO LAW AND BASED ON ERRONEOUS UNDERSTANDING OF THE FACTS. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED A SSESSING OFFICER IN MAKING ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 2 - ADDITION TO THE EXTENT OF RS.3,94,439/- OUT OF ENTR IES AND RELATED TRANSACTIONS AS FOUND IN THE IMPOUNDED DOCUMENTS AND MATERIALS T REATING THE SAME AS UNACCOUNTED TRANSACTIONS. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND C IRCUMSTANCES OF THE CASE AND LAW AND DESERVES TO BE DELETED. 04. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DELETED THE ADDITION MADE BY THE LEAR NED ASSESSING OFFICER TO THE TUNE OF RS.3,94,439/- OUT OF ENTRIES AND RELATE D TRANSACTIONS AS FOUND IN THE IMPOUNDED DOCUMENTS AND MATERIALS TREATING THE SAME AS UNACCOUNTED TRANSACTIONS. 05. THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR A LTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE PROCEEDINGS. 06. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE A LLOWED IN TOTO. 3. GROUND NOS.1 AND 2 AND GROUND NOS. 5 AND 6 ARE G ENERAL IN NATURE. AS FAR AS GROUND NOS. 3 AND 4 ARE CONCERNED, THE SA ME ARE CONNECTED AND HEREBY DECIDED AS FOLLOWS. 3.1 A SEARCH UNDER SECTION 132 WAS CARRIED OUT AT T HE RESIDENTIAL PREMISES OF THE ASSESSEE ON 27.12.2006. IT WAS NOTE D BY THE AO THAT THE ASSESSEE IS RELATED TO A CHAUHAN GROUP OF SILVASA . IN RESPONSE TO A NOTICE UNDER SECTION 153A RETURN OF INCOME WAS FILE D ON 28.3.2008 DECLARING TOTAL INCOME OF RS.18,36,660/-. THERE WER E CERTAIN INCRIMINATING DOCUMENTS DETECTED DURING THE COURSE OF SEARCH. THOSE DOCUMENTS WERE RELATED TO UNRECORDED SALES AND PURC HASES. IT WAS NOTED BY THE REVENUE DEPARTMENT THAT THOSE TRANSACTIONS H AVE NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT. LOOSE PAPERS WERE IMPOUNDED FROM THE PREMISES OF M/S. KRISHNA PAPER PRODUCTS, SILVASA. F URTHER CERTAIN LOOSE PAPERS HAVE ALSO BEEN IMPOUNDED FROM THE PREMISES O F DILEEP KUMAR GUJARATI, ACCOUNTANT, SILAVASA. FOR A.Y. 2003-04, T HE AO HAD RECORDED THE DETAILS OF THE DOCUMENTS AND THEREAFTER COMPUTE D THE TOTAL AMOUNT RECORDED ON THOSE PAPERS AT RS.5,39,439/-. THE AO A LLEGED THAT THE ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 3 - ASSESSEE HAD FAILED TO EXPLAIN THE ENTRIES RELATED TO THOSE TRANSACTIONS. RESULTANTLY, AN ADDITION OF RS.5,39,439/- WAS MADE ON ACCOUNT OF UNACCOUNTED TRANSACTIONS. 4. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LEARNED CIT(A) HAS GRANTED PART RELIEF AS FOLLOWS:- 12(B). FOR A.Y. 2003-04: THE ASSESSING OFFICER HAS MADE ADDITION FOR RS.5,39,439/- (RS.10,000/- + RS.1,35,000/- + RS.2,6 8,376/- + RS.1,26,063/-). THE APPELLANT HAS HIMSELF VOLUNTARILY DISCLOSED A S UM OF RS.3,15,563/- IN THE RETURN OF INCOME AS PER PAGE 27 OF PAPER BOOK FILED DURING THE APPELLATE PROCEEDINGS. THIS CONTAINS RS.90,000/- RELATING TO ENTRIES APPEARING IN ANNEXURE AS-15, PAGE 5 TO 15 PERTAINING TO THIS YEA R (WHICH WAS ADDED BY THE AO IN A.Y. 2002-03). THE AMOUNT OF RS.10,000/- ADDE D BY THE A.O. AT AS-15, PAGE 5 TO 15, IS DISCLOSED BY THE APPELLANT HIMSELF HENCE, DELETED. THE AMOUNT OF RS.1,35,000/- (ANNEXURE A1, PAGE 46), IS DISCLOS ED BY THE APPELLANT HIMSELF IN RETURN INCLUDED AMOUNT OF RS.3,15,563/-. HENCE, THIS AMOUNT IS DELETED. HOWEVER, THE APPELLANT HAS NOT DISCLOSED AMOUNT OF RS.2,68,376/-(ANNEXURE A-1, PAGE66 TO 75) AND AMOUNT OF RS.1,26,063/- (ANN EXURE A-1, PAGE 388 TO 390), NEITHER HE HAS EXPLAINED IT HENCE, THE ADDITI ON IS CONFIRMED TO THE EXTENT OF 2,68,376 + 1,26,063 = RS.3,94,439/- AND THE APPE LLANT IS ALLOWED RELIEF FOR THE BALANCE AMOUNT. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS REAS ONABLE AS ALSO JUSTIFIED IN GRANTING THE PART RELIEF TO THE ASSESS EE. THE REASONS ASSIGNED IS EVIDENT FROM THE PARAGRAPH REPRODUCED ABOVE ARE JUSTIFIABLE ON THE PART OF LEARNED CIT(A). THIS IS NOT A CASE WHERE THE IMP UGNED ADDITION WAS MADE IN A REGULAR OR NORMAL COURSE OF ASSESSMENT PR OCEEDINGS. BUT THIS IS A CASE WHERE ON ACCOUNT OF SEARCH OR SURVEYS CERTAI N DOCUMENTS WERE UNEARTHED AND ON THAT BASIS THE IMPUGNED ADDITION W AS MADE. THE AMOUNT WHICH WAS ALREADY DECLARED BY THE ASSESSEE W AS CONSIDERED AND DUE RELIEF WAS GIVEN, BUT FOR REST OF THE AMOUNT IN THE ABSENCE OF SATISFACTORY EXPLANATION THE IMPUGNED ADDITION WAS MADE. IN THE ABSENCE OF ANY EVIDENCE ON MERITS FROM THE SIDE OF THE ASSE SSEE, WE HEREBY AFFIRM ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 4 - THE RELIEF GRANTED BY THE LEARNED CIT(A) AND DISMIS S THIS GROUND OF THE ASSESSEE. 6. IN THE RESULT, APPEAL FOR A.Y. 2003-04 IS HEREBY DISMISSED. B. FOR A.Y. 2007-08 (ITA NO.114/AHD/2009) 7. GROUNDS RAISED ARE REPRODUCED BELOW: 1. THE ORDER OF ASSESSMENT IS CONTRARY TO THE FACT S AND PREJUDICIAL TO THE APPELLANT. 02. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE DISALLOWANCES MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CO NTRARY TO LAW AND BASED ON ERRONEOUS UNDERSTANDING OF THE FACTS. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED A SSESSING OFFICER IN MAKING ADDITION TO THE EXTENT OF RS.6,17,662/- OUT OF ENTR IES AND RELATED TRANSACTIONS AS FOUND IN THE IMPOUNDED DOCUMENTS AND MATERIALS T REATING THE SAME AS UNACCOUNTED TRANSACTIONS. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND C IRCUMSTANCES OF THE CASE AND LAW AND DESERVES TO BE DELETED. 04. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DELETED THE ADDITION MADE BY THE LEAR NED ASSESSING OFFICER TO THE TUNE OF RS.6,17,662/- OUT OF ENTRIES AND RELATE D TRANSACTIONS AS FOUND IN THE IMPOUNDED DOCUMENTS AND MATERIALS TREATING THE SAME AS UNACCOUNTED TRANSACTIONS. 05. THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR A LTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE PROCEEDINGS. 06. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE A LLOWED IN TOTO. 8. AS FAR AS GROUND NOS.1, 2, 5 AND 6 ARE CONCERNED , THE SAME ARE GENERAL IN NATURE, THEREFORE, NO ADJUDICATION IS RE QUIRED. GROUNDS NO.3 AND 4 ARE INTERCONNECTED AND ARE HEREBY DECIDED AS FOLLOWS: FOR A.Y.2007-08: THE APPELLANTS SUBMISSION THAT H E HAS VOLUNTARILY DISCLOSED RS.6,17,662/- IN THE RETURN, IS NOT CORRE CT. THE APPELLANT HAS NOT DISCLOSED ANY AMOUNT PERTAINING TO THE LOOSE PAPERS . THE ASSESSING OFFICER ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 5 - HAS MADE ADDITION OF RS.11,09,753/-THE APPELLANTS SUBMISSION THAT PAPERS AS-21 FOR RS.4,96,000/-, AS-24 FOR RS.42,000/-, A1/ 375 TO 387 FOR RS.1,51,500/- AND A1/21 FOR RS.4,47,253/- DO NOT BE LONG TO THE APPELLANT, IS NOT ACCEPTABLE. THE PAPER IS FOUND IN POSSESSION OF THE APPELLANT AND AS PER SECTION 132(4A), PRESUMPTION IS THAT IT BELONGS TO THE PERSON IN WHOSE POSSESSION DOCUMENTS ARE FOUND UNLESS HE PROVES OTH ERWISE. THE APPELLANT HAS NOT EXPLAINED TO WHOM THIS PAPER BELONGS HENCE AS PER SECTION 132(4), IT BELONGS TO THE APPELLANT HIMSELF. FURTHER, THE AMOU NT OF RS.4,47,253/- (A1/21), IS REGARDING INVESTMENT IN BUNGALOWS AND T HE APPELLANT HAS NOT FILED EVIDENCE THAT IT IS RECORDED IN THE BOOKS. ACCORDIN GLY, THE ASSESSING OFFICER IS JUSTIFIED IN MAKING THE ADDITION OF RS.11,09,753/-. 8.1 THIS YEAR IS AS WELL COVERED BY SEARCH UNDER SE CTION 132 DATED 27.12.2006, IT WAS FOUND THAT THERE WERE DOCUMENTS INDICATING UNRECORDED SALES AND UNRECORDED PURCHASES. CERTAIN LOOSE PAPERS WERE IMPOUNDED FROM THE PREMISES OF M/S. KRISHNA PAPER P RODUCTS AND FROM THE PREMISES OF SRI DILEEP KUMAR GUJARATI. THE AO H AS LISTED THOSE PAPERS AND AMOUNTS RECORDED IN THE SAID PAPER IN TO TAL WAS AT RS.11,09,753/- SINCE, THE ASSESSEE HAD FAILED TO EX PLAIN THE ENTRIES, THEREFORE, THE SAME WAS TAXED IN THE HANDS OF THE A SSESSEE. 9. BEFORE LEARNED CIT(A), THE ASSESSEE HAS OFFERED EXPLANATION IN RESPECT OF SOME OF THE DOCUMENTS, HOWEVER, LEARNED CIT(A) WAS NOT CONVINCED AND AFFIRMED THE ADDITION. 10. NOW BEFORE US, LEARNED AR HAS PLACED RELIANCE O N THE FOLLOWING EXPLANATIONS: ANNEXURE PAGE NO. AMOUNT PARTICULARS AS-21 139,140 4,69,000/- DOCUMENT NOT BELONG TO APPELLANT AS-24 66 42,000/- TREASURY RECEIPT BELONGING TO THIRD PARTY. ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 6 - A-1 21 4,47,253/- ROUGH WORKING OF SOME COST CALCULATION OF BUNGALOW. IN REPLY TO Q. 4 OF STATEMENT RECORDED ON 20.02.2007, ASSESSEE HAS STATED THAT COST OF RS.1,25,00,000/- OF BUNGALOWS IS SHOWN IN INCOME TAX RETURN. A-1 375 TO 387 1,51,500/- DOCUMENTS NOT BELONGING TO ASSESSEE. TOTAL 11,09,753/- 11. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTED THAT THE AMOUNT AS REFLECTED IN AS-21 OF RS.4,69,000/- A ND AN AMOUNT AS APPEARED AT AS-24 OF RS.42,000/- DID NOT BELONG TO THE ASSESSEE. IT HAS BEEN VEHEMENTLY CONTESTED THAT THE ENTRIES ON THAT PAPER DID NOT RELATE TO THE ASSESSEE RATHER NO NAME OF THE ASSESSEE HAD APP EARED AT ANY PLACE ON THIS DOCUMENT MARKED AS AS-21 WHICH WAS NOT RECOVER ED FROM THE ASSESSEE BUT FROM THE PREMISES OF KRISHNA PAPER PRO DUCTS. LIKEWISE, THE TREASURY RECEIPT MARKED AS AS-24 DID NOT BELONG TO THE ASSESSEE BUT IT WAS RELATED TO SOME OTHER PARTY, NAMELY, M/S. ROYAL ENTERPRISES. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES IN RESPECT OF THESE TWO PAPERS, WE HEREBY HOLD THAT THE ASSESSEES VEHE MENT CONTENTION HAS SOME FORCE, THEREFORE, DESERVES RELIEF ONLY IN RESP ECT OF THESE TWO ADDITIONS. FOR REST OF THE DOCUMENTS, THE SAME HAVE BEEN PROVED TO BE CONNECTED TO THE ASSESSEE, HENCE, NO INTERFERENCE I S REQUIRED IN RESPECT OF THOSE ADDITIONS. 12. IN THE RESULT, WE HEREBY HOLD THAT OUT OF THE T OTAL ADDITION OF RS.11,09,753/-, THE ASSESSEE IS ENTITLED FOR A RELI EF OF RS.5,11,000/- (RS.4,69,000/- + RS.42,000/-). IN THE RESULT, THESE TWO GROUND OF ASSESS ARE PARTLY ALLOWED. ITA NO.113 & 114/A HD/2009 CHITTUSINH M. CHAUHAN VS. ACIT A.YS. 2003-04 & 2007-08 - 7 - 13. IN THE COMBINED RESULT, APPEAL FOR A.Y. 2003-04 IS DISMISSED AND APPEAL FOR A.Y. 2007-08 IS PARTLY ALLOWED. SD/- SD/- (A. MOHAN ALANKAMONY) ( MUKUL K R. SHRAWAT ) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 14/08/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD