Nanda Vinod Jain, Nagpur V. Assistant Commissioner of Income Tax- Central Circle-1(1), Nagpur

ITSSA 15/NAG/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8884 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 16-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M BHUSARI
• Keywords: Unexplained investment; Business income
• Section: 40A(3); 143(3); 153A; 15

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M IT (SS) A NO S . 15 &16 / N AG / 20 1 1 ( ASSESSMENT YEAR S : 2004 - 05 & 2005 - 06 ) NANDA VINOD JAIN, MANOJ G. MORYANI, ADVOCATE, 1 ST FLOOR,SUDAMA BHAWAN, NEAR SUT MARKET, GANDHIBAGH, NAGPUR - 440 002. VS. ACIT,CEN.CIR. - 1 (1), NAGPUR - 440 001. PAN/GIR NO. : A BUPJ 2544 H ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. MANOJ G. MORYANI /REVENUE BY : DR. M. BHUSARI DATE OF HEARING : 4 TH FEB ., 201 3 DATE OF PRONOUNCEMENT : 20 TH MARCH ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E SE TWO APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST T HE ORDER OF LEANED CIT (A) - I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR S 200 4 - 05 & 200 5 - 0 6 , RESPECTIVELY , WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI . IT (SS) A NO S . 1 5& 16 /20 1 1 2 2 . SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER TOGETHER. 3 . THE ASSESSEE IS OBJECTING THE DOUBLE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) TO THE EXTENT OF RS.6,18,409/ - AND 4,27,283/ - , RESPECTIVELY FOR BOTH OF TH E YEARS. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR THESE TWO YEARS WERE COMPLETED UNDER SECTION 143(3) R.W.S.153 - A OF THE ACT. FOR ASSESSMENT YEAR 2004 - 05, AN ADDITION OF RS.11,55,615/ - WAS MADE, WHICH WAS RESTRICTED BY CIT(A) TO RS.6,18,409/ - . SIMILARLY, FOR THE ASSESSMENT YEAR 2005 - 06, AN ADDITION OF RS.9,22,325/ - WAS MADE, HOWEVER, THE SAME WAS RESTRICTED TO RS.4,27,283/ - . NO SECOND APPEAL WAS PREFERRED BY THE ASSESSEE. THEREAFTER THE AO, WHO PASSED RECTIFICATORY ORDER ACCORDING TO THE ORDE R OF LEARNED CIT(A), WHO ALLOWED THE APPEAL OF THE ASSESSEE IN PART, MADE WRONG COMPUTATION OF INCOME OF THESE TWO YEARS INADVERTENTLY. FOR THE ASSESSMENT YEAR 2005 - 06, IN FACT, THE ASSESSEE FILED RETURN UNDER SECTION 153 - A SHOWING INCOME OF RS.6,41,171/ - . THE ORIGINAL RETURN WAS FILED UNDER SECTION 139(1) OF THE ACT DECLARING TOTAL INCOME OF RS.1,03,965/ - . THE INCOME OF RS.6,41,171/ - SHOWN BY THE ASSESSEE IN RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION153 - A, WAS ENHANCED BY THE AO TO RS.11,55,615/ - .THE REAFTER THE COMPUTATION OF INCOME WAS MADE AS UNDER : - IT (SS) A NO S . 1 5& 16 /20 1 1 3 I) INCOME AS PER PROFIT AND LOSS ACCOUNT ORIGINALLY :RS. 1,03,965/ - II) UNACCOUNTED BUSINESS INCOME :RS. 11,55,615/ - COMPUTED BY THE AO III) CERTAIN MORE ADDITIONS WERE MADE UNDER SECTI ON 40A(3) :RS. 11,09,391/ IV) UNEXPLAINED INVESTMENT IN PLOT :RS. 20,000/ - V) UNEXPLAINED INVESTMENT IN ROW HOUSE : RS. 1,55,000/ - IN THIS WAY, TOTAL INCOME WAS COMPUTED AT RS.25,43,971/ - . 5 . THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AGAINST THIS ORDER. THE UNACCOUNTED BUSINESS INCOME W AS REDUCED BY THE CIT(A) TO RS.6,18,409/ - FROM RS. 11,55,615/ - . 6 . WHILE PASSING RECTIFICATORY ORDER FOR GIVING EFFECT OF THE ORDER OF THE LEARNED CIT(A), THE AO HAS TAKEN INCOME AS PER PROFIT AND LOSS ACCOUNT AT RS.6,41,171/ - AND THE ADDITION CONFIRMED BY THE CIT(A) WAS FURTHER ADDED AT RS.6,18,409/ - . THE TOTAL INCOME WAS COMPUTED FROM BUSINESS AT RS.12,59,580/ - , WHICH IS MORE THAN THE INCOME COMPUTED IN ORIGINAL ASSESSMENT ORDER , WHICH WAS AT RS. 11,55 ,615/ - . A MISTAKE HAS BEEN CREPT BY THE AO IN RECOMPUTATION OF INCOME AS HE SHOULD HAVE TAKEN INCOME DECLARED BY THE ASSESSEE AT RS. 1,03,965/ - INSTEAD OF RS. 6,41,171/ - . THE AO PRESUMED THAT THE INCOME OF RS. 6,41,171/ - SHOULD BE ADDED TO THE ADDITION CONFIR MED BY THE CIT(A). IN FACT, THE INCOME OF RS. 11,55,617/ - WAS COMPUTED BY THE AO, WHICH INCLUDES A SUM OF RS.6,41,171/ - DECLARED BY THE ASSESSEE UNDER SECTION 153A. THE TOTAL INCOME COMPUTED IN THIS HEAD WAS REDUCED BY THE CIT(A) AT IT (SS) A NO S . 1 5& 16 /20 1 1 4 RS.6,18,409/ - , THEREFORE , THIS ADDITION OF RS.6,18,409/ - IS TO BE ALTERED AGAINST THE INCOME SHOWN BY THE ASSESSEE AT RS.6,41,171/ - . THE AO DUE TO MISTAKE HAS TAKEN INCOME OF RS. 6, 41,171/ - DECLARED BY THE ASSESSEE AND HAS FURTHER ADDED THE AMOUNT OF RS. 6,18,409/ - , SUSTAINED BY TH E CIT(A) . AS STATED ABOVE, THE AMOUNT OF RS.6,18,409/ - IS TO BE ADDED IN THE INCOME SHOWN ORIGINAL I.E. RS.1,03,965/ - . THE TOTAL UNDISCLOSED INCOME WILL BE AT RS.7,22,374/ - AGAINST INCOME OF RS.12,59,580/ - COMPUTED BY THE AO. HOWEVER, WE FIND THAT INCOME S HOWN BY THE ASSESSEE IN RETURN FILED UNDER SECTION 153A WAS RS. 6,41,171/ - . THE AO INCREASED THIS INCOME TO RS. 11,55,615/ - . THE CIT(A) HAS REDUCED THIS ADDITION TO RS. 6,18,409/ - , WHICH IS LESS THAN THE INCOME DECLARED BY THE ASSESSEE. THE INCOME CANNOT BE R EDUCED AGAINST DECLARED INCOME BY THE ASSESSEE THAT TOO IN RESPONSE TO NOTICE UNDER SECTI O N 153A. ACCORDINGLY, WE DIRECT THE AO TO PASS A RECTIFICATORY ORDER BY TAKING THE ORIGINAL INCOME AT RS. 6,41,171/ - AND INCOME OF RS. 1,03,965/ - SHOWN BY THE ASSESSEE I N HIS PROFIT AND LOSS ACCOUNT ORIGINALLY. THIS IS FOR ASSESSMENT YE A R 2004 - 05. 7 . SIMILAR LY, THE INCOME FOR ASSESSMENT YEAR 2005 - 06 , THE ASSESSEE HAS DISCLOSED INCOME AT RS. 5,77,892/ - UNDER SECTION 153A. THE AO INCREASED THIS INCOME TO RS. 9,22,325/ - . ON APPEAL, LEARNED CIT(A) RESTRICTED THIS ADDITION TO RS. 4,27,283/ - . AGAIN TH E INCOME REDUCED BY THE CIT(A) IS LESS THAN THE INCOME DECLARED BY THE ASSESSEE AT RS. 5,77,892/ - . AS STATED ABOVE, THE INCOME CANNOT BE REDUCED THAN THE INCOME DISCLOSED BY THE ASSE SSEE UNDER SECTION 153A. THE R EFORE, IT (SS) A NO S . 1 5& 16 /20 1 1 5 WE DIRECT THE AO TO PASS A RECTIFICATORY ORDER BY TAKING THE INCOME DECLARED BY THE ASSESSEE AT RS. 5,77,892/ - AGAINST REDUCED INCOME OF RS. 4,27,283/ - BY CIT(A) . THE AO WILL FURTHER ADD A SUM OF RS. 82,850/ - , WHICH THE ASS ESSEE HAS DECLARED WHILE FILING THE RETURN. WE ORDER ACCORDINGLY. 8 . IN THE RESULT , BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE E - COURT ON THIS 20 TH DAY OF MAR , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 20 / 0 3 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE AP PELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI