Shri Ashok Kukreja, Bhopal V. The ACIT 3(1), Bhopal

ITSSA 123/IND/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8437 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 24-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Rejection of books of accounts; Business income; Income from undisclosed sources; Opportunity of being heard; Documents seized
• Section: 142(1); 153A; 131; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS) A NO. 116/IND/2012 A.Y. 2004-05 ASHOK KUKREJA SON AND L/H OF VISHNUMAL KUKREJA BHOPAL PAN AJVPK 4911E :: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 3(1), BHOPAL :: RESPONDENT IT(SS) A NO. 117/IND/2012 A.Y. 2003-04 SARLA KUKREJA BHOPAL PAN ADBPK- 8841P :: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 3(1), BHOPAL :: RESPONDENT IT(SS)A NOS. 122 TO 128/IND/2012 A.YS. 2001-02 TO 2007-08 ASHOK KUKREJA BHOPAL PAN ABMPK 1604K :: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 3(1), BHOPAL :: RESPONDENT 2 ASSESSEES BY SHRI S.S. DESHPANDE DEPARTMENT BY SHRI KESHAV SAXENA DATE OF HEARING 07.08.2012 DATE OF PRONOUNCEMENT .08.2012 O R D E R PER R.C. SHARMA, ACCOUNTANT MEMBER THIS BUNCH OF APPEALS BY DIFFERENT ASSESSEES, NAME D ABOVE, IS FILED AGAINST DIFFERENT ORDERS DATED 20.1.2012 O F THE LEARNED CIT(A) FOR THE ASSESSMENT YEARS A.YS. 2001-02 TO 20 07-08. 2. IN IT(SS)A NOS.116, 123 & 128/IND/2012 THE ISSUE REGARDING UNSECURED LOANS, WHICH WAS TREATED BY THE AUTHORITIES BELOW AS UNEXPLAINED INCOME OF THE ASSESSEE, HAS BE EN RAISED. 3. SO FAR AS IT(SS) A NO 116/IND/2012 IS CONCERNED, THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE HAS SHOWN A CASH CR EDIT OF RS. 3 LACS FROM SMT. BHAGWATI DEVI GOSWAMI. THE AO REQUI RED THE ASSESSEE TO PRODUCE BANK STATEMENT AND RETURN OF IN COME OF THE CREDITOR BUT THE ASSESSEE DID NOT FURNISH THE SAME. INSTEAD, LOAN CONFIRMATIONS WERE FILED BEFORE HIM. THE AO, THERE FORE, HELD THAT SINCE THE REQUIRED DOCUMENTS WERE NOT FURNISHED, TH E ASSESSEE HAS FAILED TO PROVE THE IDENTITY AND CREDIT WORTHIN ESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. HE, T HEREFORE, HELD 3 THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAINED B Y THE ASSESSEE AND AS SUCH MADE AN ADDITION OF RS. 3 LACS U/S 68 O F THE ACT. FELT AGGRIEVED BY THE ACTION OF THE AO, THE ASSESSE E APPROACHED THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER HEARI NG THE ASSESSEE, HELD THAT SINCE THE ASSESSEE DID NOT SUBMIT THE REQ UIRED DOCUMENTS, THE AO WAS JUSTIFIED IN MAKING THE ADDIT ION. AGAINST THIS FINDING OF THE LEARNED CIT(A), THE ASSESSEE IS BEFORE US. 4. SO FAR AS IT(SS) A NO 123/IND/2012 IS CONCERNED, THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE HAS SHOWN A CASH CR EDITS OF RS. 3,70,280/- FROM THE FOLLOWING PARTIES :- S.NO. NAME OF PERSON AMOUNT (RS.) 1 PUSHPA BAI 262095 2 TOLANI PURSHOTTAMDAS 108194 TOTAL 370280/- IN REGARD TO THE ABOVE LOANS, THE AO REQUIRED THE A SSESSEE TO PRODUCE BANK STATEMENT AND RETURN OF INCOME OF THE CREDITORS BUT THE ASSESSEE DID NOT FURNISH THE SAME. INSTEAD, LOA N CONFIRMATIONS WERE FILED BEFORE HIM. THE AO, THERE FORE, HELD THAT SINCE THE REQUIRED DOCUMENTS WERE NOT FURNISHED, TH E ASSESSEE HAS FAILED TO PROVE THE IDENTITY AND CREDIT WORTHIN ESS OF THE 4 CREDITOR AND GENUINENESS OF THE TRANSACTION. HE, T HEREFORE, HELD THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAINED B Y THE ASSESSEE AND AS SUCH MADE AN ADDITION OF RS. 3,70,289/- U/S 68 OF THE ACT. BY THE IMPUGNED ORDER, THE LEARNED CIT(A) CON FIRMED THE ADDITION. NOW THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US IN RESPECT OF THE ADDITION OF RS. 2,62,095/- RECEIVED FROM PUSHPA BAI AND RS. 1,08,194/- RECEIVED FROM PURSHOTTAMDAS. 5. SO FAR AS IT(SS) A NO 128/IND/2012 IS CONCERNED, THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE HAS SHOWN A CASH CR EDITS OF RS. 30,80,864/- FROM THE PARTIES :- S.NO. NAME OF PERSON AMOUNT (RS.) 1 GOYAL PRAHLADDAS 28,00,000/- 2 TOLANI PURSHOTTAMDAS 20,000/- 3 ADVANCE MARKETING 50,000/- 4 JANKI DEVI 30,864/- TOTAL 30,80,864 THE AO REQUIRED THE ASSESSEE TO PRODUCE BANK STATEM ENT AND RETURN OF INCOME OF THE CREDITOR BUT THE ASSESSEE D ID NOT FURNISH THE SAME. INSTEAD, LOAN CONFIRMATIONS WERE FILED B EFORE HIM. THE AO, THEREFORE, HELD THAT SINCE THE REQUIRED DOCUMEN TS WERE NOT 5 FURNISHED, THE ASSESSEE HAS FAILED TO PROVE THE IDE NTITY AND CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE T RANSACTION. HE, THEREFORE, HELD THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAINED BY THE ASSESSEE AND AS SUCH MADE AN ADDIT ION OF RS. 30,80,864/- U/S 68 OF THE ACT. FELT AGGRIEVED BY T HE ACTION OF THE AO, THE ASSESSEE APPROACHED THE LEARNED CIT(A). TH E LEARNED CIT(A) AFTER HEARING THE ASSESSEE, HELD THAT SINCE THE ASSESSEE DID NOT SUBMIT THE REQUIRED DOCUMENTS, THE AO WAS JUSTI FIED IN MAKING THE IMPUGNED ADDITION. AGAINST THIS FINDING OF THE LEARNED CIT(A), NOW THE ASSESSEE IS BEFORE US. 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THESE CASES, THE ASSESSEES HAD SU BMITTED CONFIRMATION LETTERS FROM THE CREDITORS BEFORE THE AO. NOT ONLY THIS, THE AO WAS ALSO REQUESTED TO ISSUE NOTICE U/S 131 OF THE ACT IN CASE HE WANTED TO EXAMINE THE CREDITORS BUT THE AO FAILED TO DO SO. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER S UBMITTED THAT NON-ISSUE OF SUMMONS U/S 131 IN SPITE OF REQUEST BY THE ASSESSEES SHOWS THAT HE WAS SATISFIED WITH THE CONF IRMATION LETTERS PRODUCED BEFORE HIM AND AS SUCH THERE WAS N O OCCASION FOR THE AO TO MAKE THE ADDITIONS IN QUESTION. BEFO RE US, RETURNS OF INCOME, BANKS STATEMENTS AND STATEMENT OF AFFAIR S OF THE 6 CREDITORS WERE ALSO PRODUCED. THE LEARNED COUNSEL, THEREFORE, PRAYED THAT THE ADDITIONS, IN QUESTION, MADE AND SU STAINED BY THE AUTHORITIES BELOW DESERVE TO BE DELETED. 7. ON THE OTHER THE LEARNED SENIOR DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THESE CASES THE ASSESSEES DID NOT FILE COPIES OF RETURNS OF INCOME AND BANK STATEMENTS OF THE RESPECTIVE CREDITORS BUT FILED CO NFIRMATION LETTERS BEFORE THE AO. IN ADDITION TO FILING LOAN C ONFIRMATION LETTERS, THE ASSESSEE ALSO REQUESTED THE AO TO ISSU E NOTICE U/S 131 OF THE ACT BUT THE AO FAILED TO DO SO. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED THE DOCUMENTS WH ICH WERE REQUIRED BY THE AO TO BE FILED BEFORE HIM I.E. BANK STATEMENTS, RETURNS OF INCOME AND STATEMENT OF AFFAIRS OF THE R ESPECTIVE CREDITORS. WE, THEREFORE, IN THE INTEREST OF JUSTI CE AND FAIR PLAY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON TH IS ISSUE AND RESTORE THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE OF UNSECURED LOANS IN THE LIGHT OF THESE DOCU MENTS, AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 7 9. COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE I N IT(SS) NOS. 122, 123, 124, 125, 126, 127 & 128/IND/2012 WI TH REGARD TO INCLUSION OF INCOME OF THE WIFE IN THE ASSESSEE S INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED ON RECORD T HE ORDER OF COORDINATE BENCH IN THE CASE OF GROUP MEMBER OF THE ASSESSEE WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE TRIBUNAL HAS HELD THAT THE INCOME OF WIFE OF THE ASSESSEE DOES N OT BELONG TO THE ASSESSEE AND THE SAME SHOULD BE EXCLUDED FROM THE T OTAL INCOME. RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER :- 3.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS REG ULARLY ASSESSED TO TAX. THE ASSESSEE IS PRIMARILY ENGAGED IN MANUFACTURING AND SALE OF COOKING MASALA WITH THE BRAND NAME VIP MASALA. THE ASSESSEE WAS ALSO INVESTING IN REAL ESTATE BUSINESS. A SEARCH AND SEI ZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF KUKREJA GROUP OF CASES ON 5.1.2007. THE ASSESSEE IS SON OF SHRI VISHNUKUMAR KUKREJA. AS PER THE REVENUE , CERTAIN DOCUMENTS, WHICH RELATE TO THE ASSESSEE, WE RE FOUND. PURSUANCE TO THE NOTICE U/S 142(1) READ WIT H SECTION 153A OF THE ACT, ISSUED TO THE ASSESSEE, T HE ASSESSEE FILED THE RETURN ON 20.3.2008 WITH THE SUBMISSION TO TREAT HIS RETURN, FILED U/S 139, AS H IS RETURN U/S 153A OF THE ACT DECLARING INCOME OF RS.73,058/- AND AGRICULTURAL INCOME OF RS.40,850/-. THE INCOME OF THE ASSESSEE IS SUMMARIZED AS UNDER : - 8 SL.NO. ASSESSMENT YEAR RETURNED INCOME (IN RUPEES) ADDITION MADE BY AO (IN RS) 1 2001-02 73058 70130 2 2002-03 90273 71,345 3 2003-04 85043 76815 4 2004-05 84580 83035 5 2005-06 95630 94445 6 2006-07 430729 82,835 THE IMPUGNED ADDITIONS WERE MADE BY THE AO ON THE GROUND THAT IN THE KUKREJA GROUP ONLY THE APPELLANT , HIS FATHER AND TWO BROTHERS ARE HAVING BUSINESS INCOME AND THESE PERSONS CREATED CAPITAL IN THE NAMES OF THEIR WIVES AND THE LADIES (WIVES) HAVE NO SOURCE OF INCOME. HOWEVER, THE FACT REMAINS THAT THE WIVES OF THE RESPECTIVE ASSESSEES HAD BEEN FILING INCOME TAX RET URNS SHOWING INCOME FROM MAKING BADI, PAPAD, ACHAR AND SEWING, ETC. AND THE SAME HAD BEEN ACCEPTED BY THE DEPARTMENT FOR THE LAST ABOUT SO MANY YEARS THAT TO O PRIOR TO SEARCH, THEREFORE, IN OUR OPINION, THERE I S NO JUSTIFICATION TO TREAT SUCH INCOME AS INCOME OF THE IR HUSBANDS THAT TOO WITHOUT BRINGING ANY CONTRARY MATERIAL ON RECORD. NO EVIDENCE HAS BEEN BROUGHT O N RECORD EITHER TO CONTROVERT THE ASSERTION OF THE AS SESSEE OR TO PROVE THAT THE UNACCOUNTED INCOME OF THE WIFE WAS THE UNACCOUNTED INCOME OF THEIR HUSBANDS. THE IMPUGNED ADDITIONS HAVE BEEN MADE MERELY ON THE BASIS OF SURMISES AND PRESUMPTION, THEREFORE, THE LEARNED AO IS DIRECTED TO DELETE THE ADDITIONS MADE IN THE HANDS OF THE PRESENT ASSESSEE, CONSEQUENTLY, TH IS GROUND OF THE ASSESSEE IN RESPECTIVE APPEALS IS ALL OWED 10. AS THE FACTS AND CIRCUMSTANCES IN RESPECT OF TH E PRESENT ASSESSEE ARE THE SAME, RESPECTFULLY FOLLOWING THE D ECISION OF THE COORDINATE BENCH IN THE CASE OF OTHER GROUP MEMBER OF THE 9 ASSESSEE, WE DIRECT THE ASSESSING OFFICER NOT TO IN CLUDE THE INCOME OF WIFE OF THE ASSESSEE TO THE INCOME OF THE ASSESSEE. 11. IN THE CASE OF ASHOK KUKREJA, A COMMON GROUND H AS BEEN TAKEN IN ALL THE YEARS WITH REGARD TO INVOCATION OF PROVISIONS OF SECTION 145(3) OF THE ACT AND ESTIMATION OF INCOME AT 8% OF THE TURNOVER. THE FACTS, IN BRIEF, ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF MASALA ITEMS. DURING THE COURSE OF SEARCH, SOME DOCUMENTS WERE FOUND AND SEI ZED WHICH GAVE DETAILS OF UNACCOUNTED PURCHASES AND SALES. TH E PAPERS SEIZED IN FILE NO. A-20 SHOWED UNACCOUNTED PURCHASE OF RS. 52000/- IN F.Y. 2003-05. THE PAPERS SEIZED IN FILE NO. LPS-10 SHOWED UNACCOUNTED PURCHASE OF RS. 110571/- DURING THE F.Y. 2006-07 AND THE PAPERS SEIZED IN FILE NO. BS-20 SHO WED UNACCOUNTED PURCHASE OF RS. 98627/- IN THE F.Y. 200 6-07. THE PURCHASES SHOWN IN THESE PAPERS WERE NOT RECORDED I N THE BOOKS OF ACCOUNTS. THE DOCUMENTS SEIZED IN OTHER FILES SH OWED UNACCOUNTED SALES OF RS. 6,03,377/- DURING F.Y. 200 6-07. THESE SALES WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS. TH E ASSESSEES STATEMENT ON THIS ISSUE WAS RECORDED DURING THE COU RSE OF SEARCH. IN VIEW OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH, THE ASSESSEE ADMITTED TO HAVE EARNED PROFIT OF RS. 25,0 0,000/- FROM 10 THE UNACCOUNTED PURCHASE AND SALE IN MASALA BUSINES S. IN VIEW OF THE EVIDENCE OF UNACCOUNTED PURCHASE AND SALES I N DIFFERENT YEARS AND THE ADMISSION OF THE ASSESSEE, THE ASSESS ING OFFICER REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED NET PR OFIT @ 8% ON SALES. ON THIS ACCOUNT, HE MADE ADDITIONS IN VARIO US ASSESSMENT YEARS AS UNDER :- A.Y.01-02 A.Y.02-03 A.Y.03-04 A.Y.04-05 A.Y.05-06 A.Y.06-07 A.Y.07-08 RS.388056 RS.478439 RS.620560 RS612129 RS.798580 RS.727000 RS768103 BY THE IMPUGNED ORDER, THE LEARNED CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION AGAINST WHICH THE ASSESS EE IS IN APPEAL BEFORE US. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW VIS-A-V IS REPLIES GIVEN BY THE ASSESSEE WITH RESPECT TO EACH AND EVERY SEIZ ED PAPER INDICATING UNACCOUNTED PURCHASE AND SALE WHICH DID NOT FIND PLACE IN THE REGULAR BOOKS OF ACCOUNT. IN VIEW OF THE FINDINGS RECORDED BY THE LOWER AUTHORITIES WHICH HAVE NOT BE EN CONTROVERTED BY BRINGING ANY POSITIVE MATERIAL ON R ECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ASSESSIN G OFFICER IN REJECTING THE BOOK RESULTS AND ESTIMATING THE NET P ROFIT ON SALES AT 11 8% OF THE TURNOVER. WE ALSO FIND THAT THE ASSESSEE HIMSELF HAS GIVEN STATEMENT DURING THE COURSE OF SEARCH WHICH H AS NOT BEEN RETRACTED, THEREFORE, ESTIMATION OF PROFIT AT 8% IS JUSTIFIED. 13. IN THE RESULT, THE GROUND TAKEN BY THE ASSESSEE , SHRI ASHOK KUKREJA, IN ALL THE YEARS IS HEREBY DISMISSED. 14. IN THE CASE OF SARLA KUKREJA; IT(SS) A NO. 117/ IND/2012, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LEARNED C IT(A) IN CONFIRMING THE ADDITION ON ACCOUNT OF RENT DEPOSIT RECEIVED BY THE ASSESSEE. FROM RECORD, WE FIND THAT THE ASSESSEE WA S IN RECEIPT OF RS. 50,000/- FROM KISHORE RAJDEV AS SECURITY DEPOSI T AGAINST GIVING THE PREMISES ON RENT. IT WAS STATED THAT DU E TO BAD RELATIONS WITH SHRI KISHORE RAJDEV, SHE WAS NOT ABL E TO GIVE CONFIRMATION FOR THE TRANSACTION. THE ASSESSING OF FICER HELD THAT NO EVIDENCE WAS SUBMITTED IN SUPPORT OF THE IDENTIT Y AND CREDIT WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. AFTER GIVING THE FINDINGS HE HELD THAT THE SOURCE O F CASH CREDITS WAS UNEXPLAINED AND MADE ADDITION OF RS. 50,000/- U /S 68. BY THE IMPUGNED ORDER, THE LEARNED CIT(A) CONFIRMED TH E ADDITION BY OBSERVING AS UNDER :- IN CASE OF CASH CREDIT, IT IS THE PRIMARY DUTY OF THE ASSESSEE TO PRODUCE CONFIRMATION FROM THE CREDITOR. THE 12 APPELLANT HAS NOT BEEN ABLE TO DISCHARGE THIS DUTY. HENCE, A.O. WAS RIGHT IN HOLDING THAT THE SOURCE OF THE CA SH CREDIT WAS UNEXPLAINED. IN VIEW OF THE ABOVE, THE ADDITIO N OF RS. 50,000/- U/S 68 IS CONFIRMED. THE A.O. IS DIRECTED TO COMPUTE TOTAL INCOME AFTER MAKING THIS ADDITION IN THE COMPUTATION. THIS GROUND OF APPEAL IS DISMISSED. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D THAT THE ASSESSEE EVEN DID NOT FURNISH CONFIRMATION LETTER F OR THE AMOUNT RECEIVED BEFORE THE LOWER AUTHORITIES. EVEN BEFORE THE TRIBUNAL, NOTHING WAS FILED SO AS TO PERSUADE US TO DEVIATE F ROM THE FINDINGS AND CONCLUSION DRAWN BY THE LOWER AUTHORIT IES. ACCORDINGLY, WE CONFIRM THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION OF RS. 50,000/-. 16. IN THE RESULT, ALL THE APPEALS ARE ALLOWED IN P ART IN TERMS INDICATED HEREINABOVE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT I N THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCL USION OF THE HEARING ON 31 ST AUGUST, 2012. SD SD (JOGINDER SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 ST AUGUST, 2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-2424 13