Shreeji Developers, Ahmedabad V. The Dy.CIT.,Circle-9, Ahmedabad

ITSSA 26/AHD/2008

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0935 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 7 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-08-2015
• Assessment Year: misc
• Appeal Filed On: 25-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Keywords: Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I S. S. GODARA , JUDICIAL MEMBER SHREEJI DEVELOPERS, B - 1, SHYAM GOKUL APARTMENTS, SATELLITE, RING ROAD, AHMEDABAD PAN: (APPELLANT) VS DY. COMMISSIONER OF INCOME TAX, CIRCLE - 9, AHMEDBAD (RESPONDENT) ASSESSEE BY: S H RI DEEPAK SONI , A.R. REVENUE BY: SHRI R.I. PATEL, CIT - D.R. DATE OF HEARING : 11 - 08 - 2 015 DATE OF PRONOUNCEMENT : 26 - 08 - 2 015 / ORD ER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR BLOCK PERIOD FROM 01 - 04 - 1985 TO 31 - 03 - 1995 & 01 - 04 - 1995 TO 21 - 09 - 1995 A RISES FROM ORDER OF THE DEPUTY I T (SS) A NO . 26 / A HD/20 08 BLOCK PERIOD 01 - 04 - 1985 TO 31 - 03 - 1995 & 01 - 04 - 1995 TO 21 - 09 - 1995 I.T(SS)A NO. 32 /AHD/20 08 A.Y. BLOCK PERIOD PAGE NO SHREEJI DEVELOPERS VS. DCIT 2 COMMISSIONER OF INCOME TAX , CIRCLE - 9, AHMEDABAD, IN PROCEEDINGS UNDER SECTION 158 (BC ) R.W.S. 143(3) & 254 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THIS APPEAL RAISES FOLLOWING GROUNDS: - YOUR APPELLANT BEING DISSATISFIED WITH THE ORDER PASSED BY THE ASSESSING OFFICER PRESENTS THIS APPEAL AGAINST THE SAME ON THE FOLLOWING AM ONGST OTHER GROUNDS. 1.0 THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW. THE ORDER IS CONTRARY TO THE PROVISIONS OF LAW AND THE FACTS OF YOUR APPELLANT'S CASE. THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER BE CANCELLED AND/OR SUITABLY MODIFI ED. 2.0 THE AO ERRED IN FRAMING THE ORDER WITHOUT FOLLOWING DIRECTIONS OF THE INCOME TAX APPELLATE TRIBUNAL. THE ASSESSING OFFICER OUGHT TO HAVE COMPLIED WITH DIRECTIONS OF THE INCOME TAX APPELLATE TRIBUNAL. THE ORDER FRAMED WITHOUT FOLLOWING THE DIRECTI ONS IS BAD IN LAW AND BE QUASHED. 3.0 THE ASSESSING OFFICER ERRED IN MAKING OBSERVATION REGARDING METHOD OF ACCOUNTING FOLLOWED BY YOUR APPELLANT. IT IS RESPECTFULLY SUBMITTED THAT YOUR APPELLANT DID NOT FOLLOW MERCANTILE SYSTEM OF ACCOUNTING AND THEREFO RE THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IS NOT IN CONSONANCE WITH THE FACTS PREVAILING IN THE CASE OF YOUR APPELLANT. IT IS SUBMITTED THAT IT BE SO HELD NOW. 4.0 THE ASSESSING OFFICER ERRED IN ESTIMATING THE UNDISCLOSED INCOME BY WAY OF ON MONE Y, EXTRA WORK ETC. AT RS. 16,69,869/ - AS AGAINST RS. 11,50,000/ - DISCLOSED BY YOUR APPELLANT. THE LEARNED ASSESSING OFFICER IN CONSEQUENCE THEREOF ERRED IN MAKING AN ADDITION OF RS. 4,16,759/ - 4.1 THE APPELLANT SUBMITS THAT THE ADDITION/DISALLOWANCE OF R S. 4,16,759/ - IS TOTALLY ERRONEOUS IN THE EYES OF LAW AND CONTRARY TO THE FACTS. THE ADDITION/DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER MERELY ON ACCOUNT OF HIS ARBITRARY APPROACH AND NOT PROPERLY APPRECIATING THE FACTS PREVAILING IN ITS CASE. I.T(SS)A NO. 32 /AHD/20 08 A.Y. BLOCK PERIOD PAGE NO SHREEJI DEVELOPERS VS. DCIT 3 4 .2 THE APPELLANT SUBMITS THAT THE ADDITION /DISALLOWANCE OF RS. 4,16 ,759/ - MADE BY THE ASSESSING OFFICER BE DELETED. 4.3 THE APPELLANT WITHOUT PREJUDICE TO ABOVE SUBMITS THAT IN ANY EVENT THE ADDITION MADE BY THE ASSESSING OFFICER IS EXCESSIVELY HIG H. THE APPELLANT SUBMITS THAT IF ANY PORTION OF THE ADDITION/DISALLOWANCE MADE BY THE ASSESSING OFFICER IS REQUIRED TO BE UPHELD ON ANY TECHNICAL GROUND IT SHOULD BE RESTRICTED TO A TOKEN AMOUNT ONLY. THE APPELLANT SUBMITS THAT APPROPRIATE RELIEF BE ALLOWE D AS PER THE PROVISIONS OF LAW. 5.0 THE ASSESSING OFFICER ERRED IN MAKING DISALLOWANCES OF EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. THE EXPENDITURE WAS INCURRED IN ACCORDANCE WITH THE PROVISIONS OF LAW AND THE SAID EXPEND ITURE IS DEDUCTIBLE WHILE COMPUTING THE TOTAL INCOME. THE APPELLANT SUBMITS THAT IT BE SO HELD NOW. 5.1 THE APPELLANT SUBMITS THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN ANY EVENT IS EXCESSIVELY HIGH. THE APPELLANT SUBMITS THAT APPROPRIATE RE LIEF BE ALLOWED AS PER THE PROVISIONS OF LAW. 6 .0 THE ASSESSING OFFICER ERRED IN MAKING THE ASSESSMENT OF THE TOTAL INCOME IN THE CASE OF YOUR APPELLANT AT RS. 15,66,759/ - WHICH IS ERRONEOUS IN THE EYES OF LAW AND CONTRARY TO THE FACTS. 6.1 THE INCOME RETURNED BY YOUR APPELLANT BE TOTALLY UNJUSTIFIED UNDER THE FACTS AND ALSO IN VIEW OF THE PROVISIONS OF LAW. IT IS SUBMITTED THAT VARIOUS ADDITIONS/VARIATIONS MADE BY THE ASSESSING OFFICER TO THE INCOME RETURNED BY YOUR APPELLANT BE TOTALLY DELETED AND/OR SUBSTANTIALLY REDUCED. 6.2 THE APPELLANT RESPECTFULLY SUBMITS THAT THE INCOME DISCLOSED IN RESPONSE TO THE NOTICE U/S 158BC WAS PER THE PROVISIONS OF LAW AND FURTHER AS PER THE FACTS AND THEREFORE THE SAME OUGHT TO HAVE BEEN ACCEPTED BY THE ASSESSING OFF ICER. IT IS SUBMITTED THAT IT BE SO HELD AND APPROPRIATE RELIEF BE ALLOWED AS PER THE PROVISIONS OF LAW. 7.0 THE ASSESSING OFFICER ERRED IN NOT PROPERLY COMPUTING THE TAX PAYABLE BY YOUR APPELLANT AND HE HAS NOT TAKEN INTO CONSIDERATION THE APPROPRIATION AVAILABLE TO YOUR APPELLANT OUT OF CASH SEIZED I.T(SS)A NO. 32 /AHD/20 08 A.Y. BLOCK PERIOD PAGE NO SHREEJI DEVELOPERS VS. DCIT 4 DURING THE PROCEEDINGS U/S 132. IT IS RESPECTFULLY SUBMITTED THAT THE CASH SEIZED IS AVAILABLE FOR APPROPRIATION IN VIEW OF THE PETITION MADE BY THE APPELLANT AND THE ASSESSING OFFICER OUGHT TO HAVE ALLOWED T HE SAME. IT IS RESPECTFULLY SUBMITTED THAT THE ASSESSING OFFICER BE DIRECTED TO ALLOW THE RELIEF IN RESPECT OF CASH SEIZED AS PER THE PROVISIONS OF LAW. 3 . THE ASSESSEE DOES NOT PRESS FOR ITS FIRST THREE GROUNDS. THE REMAINING PLEADING CHALLENGE ADDITI ON OF RS. 4,16,759/ - MADE AS ITS UNDISCLOSED INCOME. IT REITERATES ITS PLEADINGS AND PRAYS FOR DELETING THE ABOVE STATED ADDITION. THE REVENUE STRONGLY SUPPORTS THE ASSESSING OFFICER S ACTION. 4. THIS IS THE SECOND ROUND OF LITIGATION BETWEEN THE PARTI ES UP TO THE TRIBUNAL. THE ASSESSEE - FIRM IS IN LAND DEVELOPMENT BUSINESS. THE DEPARTMENT CONDUCTED A SEARCH DT. 21 - 09 - 1995 IN CASES OF ITS GROUP CONCERNS. THIS CULMINATED IN ISSUANCE OF A SECTION 158BC NOTICE DATED 01 - 11 - 1995. THE ASSESSEE FILED ITS RE TURN ON 11 - 12 - 1995 ADMITTING INCOME OF RS. 11.5 LACS. THE ASSESSING OFFICER FRAMED BLOCK ASSESSMENT ON 30 - 09 - 1996 COMPUTING TOTAL INCOME OF RS. 15,66,759/ - . THE ASSESSEE FILED APPEAL IN THE TRIBUNAL. A CO - ORDINA T E BENCH IN ITS ORDER DATED 02 - 01 - 2006 RES TORED THE ISSUE BACK TO THE ASSESSING AUTHORITY FOR A FRESH DECISION. 5. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROCEEDINGS. THE CASE FILE REVEALS THAT THE ISSUE INVOLVED MAINLY RELATES TO FINANCIAL YEARS 1994 - 95 AND 1995 - 96 RELEVANT FOR ASSESSMEN T YEAR 1995 - 96 AND 1996 - 97; RESPECTIVELY. THE ASSESSING OFFICER COMPUTED I.T(SS)A NO. 32 /AHD/20 08 A.Y. BLOCK PERIOD PAGE NO SHREEJI DEVELOPERS VS. DCIT 5 ASSESSEE S UNDISCLOSED INCOME OF RS. 7,07,175/ - IN RELATION TO THE FORMER ASSESSMENT YEAR AND THAT OF RS. 8,15,584/ - WITH REGARD TO THE LATTER ONE. THE SAME WAS OVER AND ABOVE THE U NDISCLOSED INCOME ALREADY DECLARED OF RS. 11,50,000/ - STATED HEREINABOVE RESULTING IN DIFFERENTIAL SUM OF RS. 4,16,759/ - IN QUESTION. THE ASSESSEE SUBMITS THAT THIS ADDITION SUM COMPRISES OF ACCESS MONEY COLLECTION OF RS. 2,02,350/ - AS PER A DIARY SEIZED . THE SAME IS STATED TO HAVE BEEN RECEIVED FROM FOUR PARTIES NAMELY; PRASAM HAJARNIS, MRS ANILA, MR. DINESH, MR. KAUSHIK AND MR. JAI PRAKASH TO THE TUNE OF RS. 20,750/ - EACH IN FIRST TWO CASES AND RS. 95,125/ - , RS. 45,125/ - AND RS. 20,600/ - RESPECTIVELY. THESE FIGURES FORM PART OF RECORD ANNEXURE A - 4 PAGE 65 OF THE PAPER BOOK. THE ASSESSEE CLAIMS TO HAVE RETURNED THESE SUMS BACK TO ITS ABOVE STATED PARTIES. WE PUT UP A SPECIFIC QUERY IN THE COURSE OF HEARING AS TO WHETHER IT HAD FILED ANY MATERIAL ON R ECORD IN THE SHAPE OF SEIZED DIARY OR OTHER EVIDENCE PROVING THE SAME. THE REPLY GIVEN IS IN NEGATIVE. THIS LEADS US TO A CONCLUSION THAT SINCE THE IMPUGNED EXCESS COLLECTION IS PROVED WITHOUT ANY REBUTTAL OF ITS BEING RETURNED BACK TO THE PAYERS, THE AS SESSING OFFICER HAS RIGHTLY MADE THE CORRESPONDING ADDITION OF RS. 2,02,350/ - IN ASSESSEE S CASE. ITS FIRST ARGUMENT FAILS ACCORDINGLY. 6. THIS LEAVES WITH US WITH ASSESSEE S SECOND ARGUMENT CHALLENGING EXPENDITURE DISALLOWANCE/ ADDITION OF RS. 2,14,40 9/ - . THE ASSESSMENT ORDER READS AT PAGE 16 THAT THE ASSESSING OFFICER HAS ACCEPTED ASSESSEE S EXPENSES CLAIMED REGARDING BROKERAGE, MISC. ITEMS AND THE ONCE PERTAINING TO SPECIFIC PAYEES IN QUESTION . THE I.T(SS)A NO. 32 /AHD/20 08 A.Y. BLOCK PERIOD PAGE NO SHREEJI DEVELOPERS VS. DCIT 6 ASSESSEE TAKES US TO PAGE 74 OF THE PAPER BOOK CO NTAINING NAMES OF FOUR PARTIES TO HAVE RECEIVED THE SAME. HOWEVER, WE DO NOT FIND ANY VOUCHERS, BILLS, AND OTHER DOCUMENTARY EVIDENCE FORTHCOMING FROM THE CASE FILE. THE SAME APPEARS TO BE THE REASON ON ASSESSING OFFICER S PART IN DISALLOWING THESE EXPEN SES. THIS POSITION CONTINUES BEFORE US AS WELL. WE UPHOLD THE ASSESSING OFFICER S CORRESPONDING FINDINGS AND HOLD THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS EXPENDITURE CLAIM AMOUNTING TO RS. 2,14,409/ - . THIS ARGUMENT ALSO FAILS. 7. THIS ASSESSEE S APPEAL IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 08 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( S. S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 26 /08 /2015 A K / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,