Sarada Prasanna Panda, Bhubaneswar V. DCIT, Bhubaneswar

ITSSA 134/CTK/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7522 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 23-04-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2011
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: S C BHADRA
• Keywords: Search and seizure
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM IT (SS) A NO. 134,135,136,137 AND 138/CTK/2011 (ASSESSMENT YEAR S 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07 AND 2009 - 10) SARADA PRASANNA PAND A, N - 1/191, IRC VILLAGE, NAYAPALLI,BHUBANESWAR 751015 PAN: AIZP3802 C VERSUS DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.C.BHADRA, AR FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, CIT - DR DATE OF HEARING : 23.04.2012 DATE OF PRONOUNCEMENT : 11.05.2012 ORDER PER BENCH : THE APPEALS BY THE ASSESSEE FOR THE IMPUGNED AYS ARE ON THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) CONFIRMING THE PURPORTED UNDISCLOSED INCOME BROUGHT TO T AX BY THE ASSESSING OFFICER AS PER ASSESSING OFFICERS ORDER U/S.144/153B(B) OF THE INCOME - TAX ACT,1961. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 24.07.2008. THIS OPERATION WAS RELATED TO SUBHAM ESTCON GROUP OF CASES, IN WHICH THE ASSESSEE IS ONE OF THE DIRECTORS. BASED ON SEARCHED MATERIAL, THE ASSESSING OFFICER MADE ADDITION OF 4,40,201 ON ACCOUNT OF UNSUBSTANTIATED CAPITAL IN THE ASSESSMENT YEA R 2003 - 04 BESIDES MAKING ADDITION OF 1,20,000 ON ACCOUNT OF ESTIMATED LOW DRAWINGS. SIMILARLY, IN THE AYS 2004 - 005, 2005 - 06, 2006 - 07 ADDITIONS OF 1,20,000, 85,000 AND 50,000 RESPECTIVELY WERE MADE ON ACCOUNT OF ESTIMATED LOW DRAWINGS. BESIDES, IN THE A SSESSMENT YEAR 2006 - 07 THE ASSESSING OFFICER MADE 9,00,000 CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED AS ADVANCE ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATED SUCH CLAIM AND ALSO ON THE FINDING THAT IT(SS)A NO.134,135,136,137 AND 138/C TK/2011 2 PROVISIONS OF SECTION 2(22)(E) ALSO APPLI ES . IN THE ASSESSMENT YEAR 2009 - 10, THE ASSESSING OFFICER MADE AN ADDITION OF 1,05,443 ON ACCOUNT OF UNDISCLOSED INVESTMENT ON LAND. 3. AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY, WHO CONFIRMED THE ABOVE ADDITIONS AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . 5. AS REGARDS THE ADDITION OF 4,40,201 BEING OPENING CAPITAL OF THE ASSESSMENT YEAR 2003 - 04 IT IS THE CONTENTION OF THE A SSESSEE THAT HE WAS ENGAGED IN BUSINESS ACTIVITIES AND WAS EARNING SOME AMOUNT, WHICH IS EVIDENT FROM THE RETURNS FILED FOR THE AYS 2001 - 02 AND 2002 - 03 DISCLOSING INCOME OF 65,160 AND 93,010 AND HAVING CAPITAL BALANCE OF 3,52,526 AND 4,40,201 RESPE CTIVELY. WE FIND THAT THE ENDEAVOR OF THE ASSESSING OFFICER APPEARS TO BE TAXING THOSE VERY AMOUNTS OF OPENING CAPITAL IN THE ASSESSMENT YEAR 2003 - 04 AND ON ESTIMATED LOW DRAWINGS, WHICH DID NOT FORM PART OF THE UNDISCLOSED INCOME BEING BELOW TAXABLE LIMIT S WHEN HE WAS NOT TO TAX ITEMS OF ASSETS OR DRAWINGS FALLING WITHIN THOSE LIMITS. THEREFORE, THE ADDITION ON ACCOUNT OF LOW DRAWINGS AND PERSONAL ASSETS HELD AS CAPITAL CANNOT BE TAXED IN THE IMPUGNED YEARS. THE SAME IS DIRECTED TO BE DELETED. FOR THE VER Y SAME REASON, THE ADDITION MADE ON ACCOUNT OF LOW DRAWINGS IN THE AYS UNDER CONSIDERATION CANNOT BE SUSTAINED AND AS SUCH, THEY ARE ALSO DIRECTED TO BE DELETED. IT(SS)A NO.134,135,136,137 AND 138/C TK/2011 3 7. AS REGARDS THE ADDITION OF 9,00,000 IN THE ASSESSMENT YEAR 2006 - 07, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE SAID AMOUNT HAD BEEN ADVANCED BY SUBHAM ESTCON (P) LTD AND ALSO DULY DISCLOSED IN THEIR BALANCE SHEET AND THE SAME HAS BEEN ASSESSED BY THE ASSESSING OFFICER U/S.153A AND NO ADVERSE INFERENCE HAS BEEN DRAWN AGAINST THE CONCERN FOR GIVING ADVANCE TO THE ASSESSEE. AS WE HAVE DEALT WITH THE ISSUE IN THE CASE OF SUBHAM ESTCON (P) LTD., VIDE SEPARATE ORDER PASSED ON TODAY IN IT(SS) A NOS. 116 TO 122/CTK/2011 WHEN THE SEARCH TOOK PLACE ON 24.7.2008 AND THE ASSESSEE HAD FILED THE REGUL AR RETURNS WHICH INCOME HAS BEEN DECLARED AT 1.36 CRORES THEREFORE COULD NOT BE CONSIDERED IN ISOLATION IN THE HANDS OF THE ASSESSEE BEFORE US FOR TAXATION OF 9 LAKHS EITHER UNDER THE PROVISIONS OF SECTION 2(22)(E) OR U/S.68. IN THIS VIEW OF THE MATTER , WE DIRECT DELETION OF THE SAID ADDITION OF 9 LAKHS MADE IN THE ASSESSMENT YEAR 2006 - 07. 8. AS REGARDS THE ADDITION OF 1,05,443 ON ACCOUNT OF INVESTMENT ON LAND MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAD SHOWN LAND OF 58,567 I N THE DETAILS FILED BUT ON THE DATE OF SEARCH LAND OF 1,64,000 WAS FOUND, WHICH DIFFERENCE COULD NOT BE EXPLAINED BY THE ASSESSEE. ON PERUSAL OF THE DETAILS SUBMITTED BY THE ASSESSEE, WE FIND THAT THE VALUE OF LAND OF 1,64,000 FOUND DURING THE COURSE O F SEARCH OPERATION ARE IN THE NAMES OF THE ASSESSEE AND HIS WIFE MRS. RANJITA PANDA / WHILE 58,567 WAS SHOWN IN THE NAME OF THE ASSESSEE, THE BALANCE AMOUNT OF 1,05,433 IS SHOWN IN THE BALANCE SHEET OF MR. RANJITA PANDA, WIFE OF THE ASSESSEE WHICH ALSO APPEARS IN THE STATEMENT OF AFFAIRS AS ON 31.3.2009 AND INCLUDED IN TOTAL LAND OF 33,67,278. THE LEARNED DR COULD NOT CONTROVERT THE FACTUAL ASPECT. THEREFORE, THE ASSESSEE HAVING DULY EXPLAINED THE DIFFERENCE TO BE RELATING TO HIS WIFE AND OF HIS OWN, T HE ADDITION OF 1,05,443 MADE ON THIS COUNT CANNOT BE SUSTAINED AND AS SUCH, WE DIRECT DELETION OF THE SAME. IT(SS)A NO.134,135,136,137 AND 138/C TK/2011 4 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA ) ACCOUNTANT MEMBER DATE: 11.05.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SARADA PRASANNA PANDA, N - 1/191, IRC VILLAGE, NAYAPALLI,BHUBANESWAR 751015 2. THE RESPONDENT: DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.