Shri Sunil Kumar Khandelwal, Indore V. The ACIT Circle 5(1), Indore

ITSSA 151/IND/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0337 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Revised return
• Section: 80C; 153A

Judgement Text

SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS)A NOS. 148 TO 153/IND/2013 A.YS. 2003-04 TO 2005-06, 2007-08 & 2008-09 SUNIL KUMAR KHANDELWAL INDORE PAN AEBPK 7255G ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX CIRCLE 5(1), INDORE ::: RESPONDENT APPELLANT BY SHRI PANKAJ SHAH & SHRI PRANAY GOYAL RESPONDENT BY SHRI RAJEEV VARSHNEY DATE OF HEARING 21.1.1.2016 DATE OF PRONOUNCEMENT 9 . 2 .2016 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM THE ORDERS OF THE LEARNED CIT(A)-II, INDORE, DATED 2 2.3.2013. SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 2 2. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESSEE ON 30.9.2008. THE ASSESSEE WAS ENGAGED IN THE BROKING BUSINESS OF IRON AND STEEL AND IN THE SEARCH IT WAS ESTABLISHED THAT THE ASSESSEE WAS ALSO INDULGED IN THE ACTIVITY OF ISSUING BOGUS BILLS FOR IRON AND STEEL. THERE ARE COMMON ISSUES INVOLVED IN THESE APPE ALS. WE, THEREFORE, DISPOSE OF THE SAME BY THIS CONSOLIDAT ED ORDER FOR THE SAKE OF CONVENIENCE. 3. ONE COMMON ISSUE INVOLVED IN ALL THESE APPEALS IS SUSTAINING THE ADDITION OF ESTIMATING THE INCOME FROM BROKERAGE AND RESTRICTING THE EXPENSES TO 20% OF THE TOTAL RECEIPTS. IN ALL THESE YEARS THE ASSESSEE HAS DECLARED THE INCOME FROM BROKERAGE. THE ASSESSING OFFICER ESTIMATE D THE RECEIPTS AND ALSO RESTRICTED THE EXPENSES AT 20% O F THE ESTIMATED RECEIPTS IN THE ABSENCE OF ANY PROOF WITH RE GARD TO EXPENSES EXCEPT TELEPHONE BILLS. SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 3 4. WE HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING TH E ARGUMENTS OF BOTH THE PARTIES IN THE WAKE OF FACTS OF T HE CASE, WE HOLD THAT THE ASSESSING OFFICER WAS NOT JUSTI FIED IN ESTIMATING THE RECEIPTS FOR THE BUSINESS MORE THAN WH AT WAS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME. THEREFORE, WE DIRECT TO ACCEPT QUANTUM OF THE AMOUNT OF BROKERAGE DECLARED BY THE ASSESSEE. HOWEVER, ON THE I SSUE OF RESTRICTING THE EXPENSES TO 20% OF THE TOTAL RECE IPTS, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AS THE ASSESSE E COULD NOT FURNISH THE DOCUMENTS IN SUPPORT OF ITS C LAIM FOR EXPENSES OF MORE THAN 20% OF RECEIPTS. 5. IN THE RESULT, THIS GROUND IN ALL THE APPEALS IS PAR TLY ALLOWED. 6. THE OTHER ISSUE INVOLVED IN THESE APPEALS IS REGARD ING ESTIMATING THE COMMISSION INCOME FROM THE BOGUS BILL ING OF IRON AND STEEL. THE ASSESSEE HIMSELF ADMITTED THE FACT THAT HE WAS ENGAGED IN THE BOGUS BILLING. THE QUANTUM OF BO GUS SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 4 BILLING IS ALSO WELL ESTABLISHED FOR THESE ASSESSMENT YEARS. THE ONLY DISPUTE IS WITH REGARD TO EARNING THEREON. 7. WE HAVE HEARD BOTH THE SIDES. IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS INVOLVED IN ISSUING BOGUS BILLS FOR IRON AND STEEL AND EARNING THE COMMISSION INCOME THER EON. THE ASSESSEE CLAIMED THAT HE WAS EARNING ONLY RS. 15/- P ER TON. HOWEVER, THE ASSESSING OFFICER ADOPTED THE RATE OF COMMISSION AT RS.40/- PER TON. AFTER HEARING BOTH T HE SIDES, WE ARE OF THE VIEW THAT THIS ESTIMATED COMMISSI ON OF RS. 40/- PER TON COMES TO AROUND 2% OF THE AMOUNT OF BOGUS BILLING OF IRON AND STEEL. IT IS A MATTER OF CO MMON KNOWLEDGE THAT THE PERSONS WHO ARE INDULGING IN SUCH ACTIVITIES CHARGE AROUND 2% OF THE AMOUNT OF BOGUS BILL S SO ISSUED. IN VIEW OF THESE FACTS, WE UPHOLD THE ESTIMAT ED INCOME BY THE REVENUE AUTHORITIES AS REASONABLE ESTIMAT E OF COMMISSION INCOME FOR PROVIDING BOGUS BILLS. WE, SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 5 THEREFORE, SUSTAIN THE ORDER OF THE LEARNED CIT(A) O N THIS ISSUE. 8. THE OTHER ISSUE INVOLVED IN THESE APPEALS IS SUSTAI NING THE ADDITION MADE ON ACCOUNT OF THE INCOME OUT OF SALES . THE ASSESSING OFFICER HAS MADE THE ADDITION @ 5% OF T HE ESTIMATED SALES AND 1/7 TH OF THE SALES AS INVESTMENT FOR UNDISCLOSED PURCHASES. ON THIS ISSUE ALSO WE HAVE HEAR D BOTH THE SIDES AND WE ARE OF THE VIEW THAT THE ADDITION @ 5% OF THE NET SALES ESTIMATED DESERVES TO BE SUSTAINED . HOWEVER, ON THE ISSUE OF INVESTMENT FOR IN PURCHASES FOR THIS BUSINESS, WE ARE OF THE VIEW THAT WE HAVE SUSTAINE D THE ADDITION OF UNACCOUNTED INCOME FROM BROKERAGE AND FROM BOGUS BILLING FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05. THEREFORE, WE ARE OF THE VIEW THAT MAKING ANY FURTHER ADDITION ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF GOODS IS NOT JUSTIFIED AS WE HAVE ALREADY SUSTAINED THE ADDITION FOR UNACCOUNTED INCOME IN EARLIE R SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 6 YEAR WHICH SHALL BE AVAILABLE WITH THE ASSESSEE FOR MAKING SUCH UNACCOUNTED PURCHASES. IN VIEW OF THESE FACTS, T HESE GROUNDS ARE PARTLY ALLOWED. 9. THE OTHER ISSUE INVOLVED IN THESE APPEALS IS REGARD ING THE PROTECTIVE ASSESSMENT WITH REGARD TO THE TRANSACTIO NS OF M/S SALUJA ENTERPRISES AND M/S SONAM STEEL. ON THIS ISSUE IT IS CLAIMED THAT IN THE CASES WHERE SUBSTANTIVE ADDITION HAS BEEN MADE, THOSE ASSESSEES HAVE ACCEPTED THE ADDITION AND HAVE NOT PREFERRED APPEALS AGAINST THAT. IN THE ASSESSEES CASE IT WAS A PROTECTIVE ASSESSMENT. 10. AFTER HEARING BOTH THE SIDES, WE RESTORE THE IS SUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO N TO VERIFY WHETHER SUCH ADDITION HAS BEEN ACCEPTED OR SUSTAINED IN OTHER PERSONS HANDS AND WHETHER THOSE PERSONS HAVE PREFERRED ANY APPEAL AGAINST THAT. IF NO APPEAL IS PREFERRE D OR THEY HAVE ACCEPTED THE ADDITION, IN THAT SITUATION, WE DIRECT TO DELETE THE ADDITION IN THE HANDS OF THE ASSE SSEE. SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 7 11. WITH REGARD TO THE CLAIM OF DEDUCTION UNDER CHAPTE R VIA FOR THE ASSESSMENT YEAR 2008-09, WE HOLD THAT THE RETURN FILED U/S 153A CANNOT BE UTILISED FOR THE BEN EFIT OF THE ASSESSEE. WE HAVE TAKEN AN IDENTICAL VIEW IN THE CASE OF M/S ORNATE LEASING & FINANCE PRIVATE LIMITED IN IT(SS)A NOS. 83, 84, 85 & 86/IND/2015 WHEREIN IT WAS HELD AS UNDER :- 65. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND ALSO GONE THROUGH THE CASE LAW RELIED UPON. WHI LE FILING THE RETURN OF INCOME U/S 153A/153C OF THE AC T SOME OF THESE ASSESSEE HAVE CLAIMED DEDUCTION U/S 80C AND 80D OF THE ACT. NO SUCH CLAIM WAS MADE WHIL E FILING THE RETURN OF INCOME U/S 139(1)/139(4) OF TH E ACT. SINCE WE HAVE ALREADY ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND OF ISSUE OF RECORDING SATISFACTION PRIOR TO ISSUE OF NOTICE U/S 153C OF T HE ACT AND ALSO ON THE GROUND THAT NO INCRIMINATING DOCUME NT SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 8 WAS FOUND AND SEIZED, THEREFORE, THERE IS NO QUESTI ON OF ALLOWING SUCH DEDUCTION TO THE ASSESSEE. FURTHER WE WOULD ALSO LIKE TO STATE THAT THE PROVISIONS OF SEC TION 153A/153C ARE NOT MADE FOR THE BENEFIT OF THE ASSESSEE. RETURN FILED IN RESPONSE TO NOTICE U/S 153A/153C OF THE ACT IS NOT SUBSTITUTE OF REVISED R ETURN FOR THE CLAIM OF SUCH BENEFITS. HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LIMITED VS. CIT; 284 ITR 323 RULED OUT THAT A FRESH CLAIM BEFORE THE ASSESSING O FFICER CAN BE MADE ONLY BY FILING A REVISED RETURN AND NOT OTHERWISE. THEREFORE, WHATEVER CLAIM THE ASSESSEE HAS NOT MADE WHILE FILING THE RETURN U/S 139(1)/139(4) OF THE ACT, HE CANNOT MAKE FRESH CLAIM BY FILING THE R ETURN U/S 153A/153C OF THE ACT AND REDUCE THE TAXABLE INCOME ORIGINALLY DECLARED. SUCH VIEW HAS BEEN UPHE LD BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF JAI SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 9 STEELS (INDIA) VS. ACIT (SUPRA). THEREFORE, THIS GR OUND OF THE ASSESSEES APPEAL STANDS DISMISSED. 21. FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, WE FIN D NO MERIT IN THIS GROUND OF APPEAL WHERE FRESH CLAIMS HAVE BEEN MADE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND THE SAME IS, THEREFORE, NOT MAINTAINABLE. MOREOVER, THE ASSESSEE HAS NOT TAKEN THIS GROUND BEFORE THE LEARNED CIT(A) AND AS SUCH HE HAS N O LOCUS STANDI TO RAISE THIS GROUND BEFORE THE TRIBUNAL. 22. FINALLY, THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 9 TH FEBRUARY, 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 9 TH FEBRUARY, 2016 DN/- SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 10 SUNIL KUMAR KHANDELWAL IT(SS) A NOS. 148 TO 150,152 & 153/IND/2013 11