Shri Sushanta Mondal, Birbhum V. ACIT, Central Circle - XI, Kolkata, Kolkata

ITSSA 2/KOL/2010

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0076 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 19-01-2010
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Search and seizure; Document seized; Block assessment; Documents seized
• Section: 132

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ( !' # '$ ) % / I.T(SS).A NO.2/KOL/2010 !& '( )*/ BLOCK PERIOD: 01.04.2000 TO 12.01.2001 SHRI SUSHANTA MONDAL VS. ASSISTANT COMMISSIONER OF INCOME-TAX, (PAN: AIMPM4139R) CENTRAL CIRCLE-XI, KOLKATA (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 25.03.2014 DATE OF PRONOUNCEMENT: 25.03.2014 FOR THE APPELLANT: SHRI RAVI TULSIYAN, FCA FOR THE RESPONDENT: SHRI RAVI JAIN, CIT, DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 476/CC-XI/CIT(A),C-1/08-09 DATED 04.12.2009. A SSESSMENT WAS FRAMED BY ACIT, CC- XI, KOLKATA U/S. 158BC/158BD/254 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR BLOCK ASSESSMENT YEAR 01.04.2000 TO 12.01 .2001 VIDE HIS ORDER DATED 22.12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING THE EXPENSES OF LORRY H IRE CHARGES AT RS.7,00,440/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING TWO EFFECTIVE GROUNDS : 1. THAT THE LD. CIT(A) ERRED IN HAVING ALLEGED THA T THE ASSESSEE DESPITE OPPORTUNITY GIVEN FAILED TO PRODUCE EVIDENCE BEFORE THE A.O. IN SUPPORT OF EXPENDITURE OF RS.7,00,440/- ON LORRY HIRE CHARGES WITHOUT APPRECI ATING THE ASSESSEES SUBMISSION THAT THE AO ONLY ASKED FOR THE BILLS & EVIDENCES OF PAYM ENTS MADE DURING THE YEAR, WHICH WERE DULY FURNISHED AND NOT FOR THE LIABILITY CARRI ED FORWARD TO NEXT YEAR. 2.THAT THE LD. CIT(A) FURTHER ERRED IN NOT HAVING P ROPERLY APPRECIATED THAT THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING AND HENCE L IABILITIES INCURRED ON LORRY HIRE CHARGES OF RS.7,00,440/- DURING THE YEAR BUT NOT AC TUALLY PAID SHOULD ALSO BE ALLOWED AS EXPENSES IN THE YEAR UNDER APPEAL AS PER MERCANTILE SYSTEM OF ACCOUNTING, MORE SO WHEN THE SAME ARE EVIDENCED FROM THE SEIZED DOCUMENTS AL SO. 3. BRIEFLY STATED FACTS ARE THAT A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED ON 12.01.2001 ON THE PREMISES OF PATEN NA GAR MINERAL & INDUSTRIES PVT. LTD. 2 IT(SS)A NO. 2/K/2010 SHRI SUSHANTA MONDAL, B.P.:1.4.2000 TO 12.1.2001 DURING THE SEARCH CERTAIN BOOKS AND DOCUMENTS PERTA INING TO ASSESSEE WERE FOUND AND IDENTIFIED BY HIM. ACCORDINGLY, NOTICE U/S. 158BC R.W.S 158BD OF THE ACT FOR THE BLOCK PERIOD 01.04.1990 TO 12.01.2001 WAS ISSUED AND ACCORDINGLY , BLOCK ASSESSMENT WAS FRAMED. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS, THE AO MADE ADDITION OF LORRY HIRE CHARGES AMOUNTING TO RS.7,00,440/- AS THE ASSESSEE FAILED T O FILE EVIDENCE OF EXPENDITURE INCURRED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE PREFERRED APPEAL BFORE TRIBUNAL . TRIBUNAL IN THE FIRST ROUND HAS SET ASIDE THIS ISSUE IN IT(SS)A NO. 48/K/2007 VIDE ORDER DATE D 31.01.2008 AND THE RELEVANT DIRECTIONS IN PARA 10 PAGE 5 READS AS UNDER: 10. ON GOING THROUGH THE RIVAL SUBMISSIONS, PERUSI NG TH CASE RECORD ALONG WITH THE PAPER BOOK FILED WE FIND THAT IT IS A PECULIAR CASE OF ITS TYPE WHERE THE AO HAS REJECTED THE CONTENTION OF THE ASSESSEE ON THE MERE GROUND THAT IT WAS NOT AS PER THE SEARCH DOCUMENT. EVEN HE HAS IGNORED TO ACCEPT THE BANK ACCOUNT AND GRANTED RELIEF IN RESPCCT OF GOVERNMENT EXPENSES LIKE TAX DUES ETC. WHICH IS TOT ALLY ILLEGAL. IN OUR CONSDERED VIEW, EVEN IF THE RETURN WAS NOT FILED IN A SEARCH CASE I N THE BLOCK PERIOD, THE ENTIRE RECEIPTS AND INCOME HAVE TO BE CONSIDERED ON THE BASIS OF THE DO CUMENT FILED DURING THE SEARCH ASSESSMENT PROCEEDING. IT DOES NOT DEBAR THE A.O. T O ACCEPT THE EVIDENCE OTHER THAN THE SEIZED DOCUMENTS. HOLDING SUCH VIEW OF THE MATTER, WE ARE INCLINED TO ACCEPT THE LD. A.R.S CONTENTION ON ALL THE GROUNDS BECAUSE IT IS QUITE L OGICAL THAT ONE CANNOT ACCEPT ONLY THE RECEIPT AND DENY THE EXPENSES. IF IN A BLOCK PERIOD , INCOME EARNED IS TO BE DETERMINED, THEN IT IS TO BE DETERMINED NOT ONLY ON THE BASIS O F THE SEIZED DOCUMENTS BUT ALSO ON THE BASIS OF THE EVIDENCE PRODUCED DURING THE SEARCH AN D SEIZURE ASSESSSMENT PROCEEDING. WITH THIS LOGICAL VIEW, WE ARE INCLINED TO ACCEPT T HE CONTENTION OF THE LD. A.R. FOR THE ASSESSEE ON ALL THE GROUNDS AND WE FAIL TO UNDERSTA ND AS TO HOW THE CIT(A) SIMPLY CONFIRMED THE ORDER OF THE A.O. WITHOUT APPLICATION OF PROPER MIND. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIREC T THE A.O. TO CONSIDER THE EVIDENCES AS PER LAW BECAUSE EVEN IF THE DOCUMENTS LIKE BANK ACC OUNTS AND CASH BOOK.ETC. ALONG WITH BILLS AND VOUCHERS ARE NOT COMING WITHIN THE SEIZED DOCUMENTS, THESE ARE NOT SUPPOSED TO HAVE BEEN MANIPULATED BY THE ASSESSEE AS THE ASSESS EE WAS NOT AWARE OF THE SEARCH NOR OF THE INCOME-TAX PROCEEDINGS AT ALL. HOLDING SUCH OF THE MATTER, THE ORDERS PASSED BY THE LOWER AUTHORITES ARE HEREBY SET ASIDE AND THE A.O. IS DIRECTED TO REFRANE THE ASSESSMENT AFTER CONSDERING ALL THE EVIDENCES WHICH WERE PROD UCED BEFORE THE CIT(A) AND BEFORE THE TRIBUNAL AS THESE ARE DOCUMENTS RELATING TO BANK AC COUNTS, BILLS AND VOUCHERS RELATING TO THE BUSINESS COMING UNDER THE BLOCK PERIOD. ACCORDI NGLY, THE ISSUES ARE RESTORED TO THE A.O. FOR REDOING THE ASSESSMENT AFRESH WITH A DIREC TION TO ALLOW REASONABLE OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOP ERATE AND COMPLY IN THE PROCEEDING IN HIS OWN INTEREST. ACCORDINGLY, THE AO AGAIN FRAMED THE ASSESSMENT AND HE DISALLOWED BY STATING THAT ASSESSEE FAILED TO FILE EVIDENCES AND FOR THE WANT OF MATERI AL EVIDENCE EXPENDITURE WAS DISALLOWED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO AS THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE EXPENDITURE. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 3 IT(SS)A NO. 2/K/2010 SHRI SUSHANTA MONDAL, B.P.:1.4.2000 TO 12.1.2001 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. LD. COUNSEL FOR THE ASSESSEE BEFORE US MADE A SHORT SUBMISSION THAT ENTIRE EVIDENCE ARE AVAILABLE IN THE SEIZED MATERIAL AND HE PRODUCED BE FORE US COMPLETE SET OF SEIZED DOCUMENTS, WHICH ARE IN VERNACULAR LANGUAGE I.E. BENGALI. WHE N THESE WERE CONFRONTED TO LD. CIT, DR, HE FAIRLY STATED THAT IN CASE THESE EXPENSES ARE RECOR DED IN THE SEIZED DOCUMENTS THE SAME CAN BE VERIFIED BY AO AND HE WILL ALLOW ACCORDINGLY. HENC E, HE REQUESTED FOR SETTING ASIDE THIS ISSUE TO THE FILE OF AO. LD. COUNSEL FOR THE ASSESSEE HA S NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF AO WITH A SPECIFIC DIRECTION THAT IN CASE T HE EXPENSES ARE RECORDED IN THE SEIZED MATERIAL, THE SAME SHOULD BE ALLOWED. WE FIND THAT THE PLEA OF BOTH THE SIDES IS QUITE REASONABLE AND HENCE, WE DIRECT THE AO TO FIND OUT THE CLAIM OF TH E ASSESSEE REGARDING LORRY HIRE CHARGES TO THE EXTENT OF RS.7,00,440/- AND IF THESE ARE RECORDED I N THE SEIZED MATERIAL AO WILL ALLOW THE SAME. THE AO IS DIRECTED ACCORDINGLY. APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH MARCH, 2014 23 '4' 5 JD.(SR.P.S.) 6 .7 8 7)9- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SHRI SUSHANTA MONDAL, P.O. MD. BAZAR TO WNSHIP, DIST. BIRBHUM, PIN-731132. 2 ./,- / RESPONDENT ACIT, C.C.XI, KOLKATA. 3 . ' ( )/ THE CIT(A), KOLKATA 4. 5. ' / CIT KOLKATA 7=> .' / DR, KOLKATA BENCHES, KOLKATA /7 ./ TRUE COPY, '?/ BY ORDER, ' /ASSTT. REGISTRAR .