Shri Inderchand D.Kochar, CHENNAI V. ACIT, CHENNAI

ITSSA 28/CHNY/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8166 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-05-2012
• Assessment Year: misc
• Appeal Filed On: 19-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOBADDL
• Assessee Lawyers: LAKSHMICHAND NAHATA
• Keywords: Document seized; Block assessment; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.(SS) A. NO. 28/MDS/2011 BLOCK ASSESSMENT PERIOD : 1.4.1996 TO 17.12.2002 SHRI INDERCHAND D. KOCHAR, NO.33, N.S.C. BOSE ROAD, CHENNAI - 600 079. PAN : AAAPI7872E (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(2), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI LAKSHMICHAND NAHATA, CA RESPONDENT BY : SHRI SHAJI P. JACOB, ADD L. CIT DATE OF HEARING : 29.05.2012 DATE OF PRONOUNCEMENT : 15.06.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVANC E IS THAT CIT(APPEALS) CONFIRMED THE ADDITION OF ` 2,38,000/- OUT OF TOTAL SUM OF ` 5 LAKHS MADE BY THE ASSESSING OFFICER. 2. SHORT FACTS APROPOS ARE THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEES FATHER SHRI N. DHANRAJ KOCHAR ON 17. 12.2002. DURING THE COURSE OF SEARCH, CERTAIN LOOSE SHEETS WERE FOUND F ROM WHICH IT CAME OUT THAT ASSESSEE HAD ADVANCED CERTAIN SUMS TO ONE SHRI 2 I.T.(SS) A. NO. 28/MDS/11 PURATCHIDASAN. IT ALSO CAME TO THE NOTICE OF THE R EVENUE THAT THE SAID SUMS WERE RECEIVED BACK BY THE ASSESSEE ALONGWITH I NTEREST. HOWEVER, IT SEEMS THESE TRANSACTIONS WERE NOT INCLUDED BY TH E ASSESSEE IN ITS REGULAR RETURN OF INCOME. NOTICE WAS ISSUED UNDER SECTION 158BD OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AND PURSU ANT TO THAT, ASSESSEE FILED A RETURN FOR THE BLOCK PERIOD DISCLOSING NIL INCOME. DURING THE COURSE OF ASSESSMENT, ASSESSING OFFICER NOTED THAT ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR SALE OF PROPERTY WITH SHRI PURATCHIDASAN AND THE SAID DEED WAS CANCELLED THROUGH ANOTHER DEE D. ON SUCH CANCELLATION, A SUM OF ` 5 LAKHS WAS RECEIVED BY THE ASSESSEE FROM SHRI PURATCHIDASAN. ENQUIRIES MADE WITH SHRI PURATCHIDA SAN REVEALED THAT THE SAID PERSON HAD TAKEN A LOAN OF ` 2 LAKHS FROM THE ASSESSEE AND SINCE HE COULD NOT REPAY THE LOAN, IT WAS AGREED TO BE TREATED AS ADVANCE PAID BY THE ASSESSEE FOR A PROPERTY OWNED B Y SHRI PURATCHIDASAN. AS PER SHRI PURATCHIDASAN, THE TITL E DEED OF THE PROPERTY WAS HANDED OVER TO ASSESSEE. THEREAFTER, IT SEEMS, BASED ON ANOTHER AGREEMENT, THE PROPOSED SALE OF PROPERTY TO THE ASS ESSEE WAS CANCELLED AND IN LIEU A SUM OF ` 5 LAKHS WAS RECEIVED BY THE ASSESSEE FROM SHRI PURATCHIDASAN. EXPLANATION OF THE ASSESSEE WAS THAT THE AGREEMENT FOR PURCHASE OF PROPERTY FROM SHRI PURATCHIDASAN WAS EN TERED ON 17.10.89. AS PER THE ASSESSEE, ` 2,50,000/- WAS PAID TO SHRI PURATCHIDASAN DURING THE PERIOD 17.10.89 TO 5.12.89 ALONGWITH EXPENSES O F ` 12,000/- FOR 3 I.T.(SS) A. NO. 28/MDS/11 REGISTRATION OF AGREEMENT FOR PURCHASE OF THE PROPE RTY. THUS THE TOTAL SUM PAID TO SHRI PURATCHIDASAN, AS PER THE ASSESSEE , CAME TO ` 2,62,000/-. UPON CANCELLATION OF ABOVE AGREEMENT, AS PER THE ASSESSEE, THE SAID SUM WAS RECEIVED BACK FROM SHRI PURATCHIDASAN. ACCORDING TO THE ASSESSEE, IT WAS NOT A LOAN GIVEN TO THAT PARTY, BUT ONLY ADVANCE WHICH WAS RECEIVED BACK. HOWEVER, ASSESSIN G OFFICER WAS NOT APPRECIATIVE OF THESE EXPLANATIONS. ACCORDING TO H IM, THE MODE OF PAYMENT OF ADVANCE WAS NOT FURNISHED AND ASSESSEE A LSO COULD NOT PRODUCE BOOKS OF ACCOUNTS IN RESPECT OF ITS CLAIM. A.O., THEREFORE, HELD THAT WHOLE OF ` 5 LAKHS WAS UNACCOUNTED AND THIS WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND TAXED ACCORD INGLY. 3. BEFORE THE CIT(APPEALS), ARGUMENT OF THE ASSESSE E WAS THAT IN ADDITION TO ` 2,50,000/- PAID IN 1989, HE HAD ALSO PAID A SUM OF ` 3 LAKHS IN CASH ON DIFFERENT DATES TO SHRI PURATCHIDASAN. AS PER THE ASSESSEE, SUM OF ` 50,000/- EACH WAS PAID ON 25.4.1990 AND 4.8.1990, AND SUMS OF ` 1 LAKH EACH WAS PAID ON 13.9.1990 AND 13.11.1990, TOTALLING TO ` 3 LAKHS. THEREFORE, AS PER THE ASSESSEE, APART FROM ` 2,62,000/- ALREADY PAID AS PER PROPERTY PURCHASE AGREEMENT, A FURTHER SUM OF ` 3 LAKHS WAS ALSO GIVEN TO SHRI PURATCHIDASAN. ON CANCELLATION, WHAT WAS RECEIVED WAS NOT ONLY THE SUM OF ` 2,62,000/- BUT ALSO THE SUM OF ` 3 LAKHS PAID DURING THE PERIOD 25.4.1990 TO 13.11.1990. AS PER T HE ASSESSEE, THE 4 I.T.(SS) A. NO. 28/MDS/11 PROPERTY WAS TAKEN ONLY AS A SECURITY. ASSESSEE AL SO SUBMITTED THAT THE PAYMENTS WERE MADE AGAINST FOUR DEMAND PROMISSORY N OTES. BUT THIS WAS MISTAKENLY NOT PRODUCED BEFORE ASSESSING OFFICE R. 4. CIT(APPEALS) WAS APPRECIATIVE OF THE CONTENTIONS OF THE ASSESSEE INSOFAR AS ` 2,62,000/- WAS CONCERNED. HOWEVER, ACCORDING TO H IM, THE CLAIM OF ` 3 LAKHS PAID TO SHRI PURATCHIDASAN IN 1990, BASED ON PROMISSORY NOTES, WAS FIRST TIME RAISED BY THE ASSE SSEE BEFORE HIM AND NO SUCH EXPLANATION WAS EVER GIVEN TO THE ASSESSING OFFICER. AS PER THE CIT(APPEALS), ASSESSEE COULD NOT ESTABLISH THAT HIS CASE WAS COVERED UNDER ANY OF THE EXCEPTIONS PROVIDED UNDER SECTION 46A OF THE ACT. HE, THEREFORE, REFUSED TO CONSIDER THE EVIDENCE FILED B Y THE ASSESSEE FOR THE CLAIM OF ` 3 LAKHS. HOWEVER, HE ACCEPTED THE SOURCE FOR THE SUM OF ` 2,62,000/- OUT OF ` 5 LAKHS, AS PART OF THE ADVANCE EARLIER PAID BY TH E ASSESSEE BASED ON THE AGREEMENT FOR SALE OF PROPERT Y RETURNED BY SHRI PURATCHIDASAN. THUS, EFFECTIVELY, HE REDUCED THE A DDITION TO ` 2,38,000/- 5. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDERS OF AUTHORITIES BELOW, SUBMITTED THAT THE PROMISSORY NO TES WERE A PART OF THE SEIZED DOCUMENTS AND THEREFORE, IT COULD NOT HAVE B EEN CONSIDERED AS ADDITIONAL OR FRESH EVIDENCE. AS PER LEARNED A.R., THE PAYMENTS MADE DURING THE PERIOD 25.4.1990 TO 13.11.1990, TOTALLIN G TO ` 3 LAKHS, WERE ALL ACCEPTED BY SHRI PURATCHIDASAN AND FOUR DEMAND PROM ISSORY NOTES 5 I.T.(SS) A. NO. 28/MDS/11 WERE ALSO ISSUED BY HIM. THEREFORE, THE AMOUNT OF ` 5 LAKHS RETURNED BY SHRI PURATCHIDASAN STOOD FULLY EXPLAINED. LEARNED A.R. PRODUCED BEFORE US COPIES OF THE DEMAND PROMISSORY NOTES FOR SUPPOR TING HIS CASE THAT ` 3 LAKHS WAS PAID BY THE ASSESSEE TO SHRI PURATCHIDA SAN DURING THE PERIOD 25.4.1990 TO 13.11.1990. BUT, DESPITE DIRECT IONS FROM THE BENCH, HE DID NOT CERTIFY SUCH DOCUMENTS TO BE EITHER TRUE OR TO BE PART OF THE SEIZED RECORDS OR TO HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFICER. HOWEVER, ACCORDING TO HIM, THE MATTER HAD TO BE REM ITTED BACK TO ASSESSING OFFICER FOR FRESH CONSIDERATION IN VIEW O F THE EVIDENCE PRODUCED BEFORE THE CIT(APPEALS). 6. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. CASE OF THE ASSESSEE IS THAT A SUM OF ` 5 LAKHS RETURNED BY SHRI PURATCHIDASAN COMPRISED OF THE FOLLOWING AMOUNTS:- 1. AMOUNT PAID DURING THE PERIOD 17.10.1989 TO 5.12.1989, BASED ON AN AGREEMENT FOR SALE BETWEEN ASSESSEE AND SHRI PURATCHIDASAN ` 2,50,000/- 2. EXPENSES FOR REGISTRATION OF THE AGREEMENT MENTIONED ABOVE ` 12,000/- 3. LOANS GIVEN TO SHRI PURATCHIDASAN IN CASH DURING THE PERIOD 25.4.1990 TO 13.11.1990 ` 3,00,000/- 6 I.T.(SS) A. NO. 28/MDS/11 CASE OF THE ASSESSEE IS THAT WHAT WAS RETURNED BY S HRI PURATCHIDASAN WAS THE ABOVE AMOUNTS. SINCE AGREEMENT BASED ON WH ICH ` 2,50,000/- WAS PAID IN 1989 WAS A REGISTERED ONE, CIT(APPEALS) HAD ACCEPTED THAT CLAIM. CIT(APPEALS) HAD AGREED WITH THE CONTENTION OF THE ASSESSEE THAT ` 2,50,000/- OUT OF ` 5 LAKHS, WAS THE AMOUNT RETURNED ON CANCELLATION OF THE AGREEMENT. CIT(APPEALS) ALSO A CCEPTED THE CLAIM OF THE ASSESSEE THAT ` 12,000/- WAS THE REGISTRATION EXPENSES FOR THE AGREEMENT RETURNED BY SHRI PURATCHIDASAN. HOWEVER, INSOFAR AS ` 3 LAKHS CLAIMED AS AMOUNTS RETURNED BY SHRI PURATCHID ASAN OUT OF CASH PAID IN 1990, CIT(APPEALS) WAS OF THE OPINION THAT FRESH EVIDENCE WAS PRODUCED IN THE FORM OF PROMISSORY NOTES COULD NOT BE ACCEPTED. BEFORE US ALSO SUCH PROMISSORY NOTES WERE PRODUCED, BUT AS MENTIONED, LEARNED A.R. WAS NOT WILLING TO CERTIFY THAT SUCH P ROMISSORY NOTES WERE EITHER PART OF SEIZED RECORDS OR WAS PART OF THE DO CUMENTS PRODUCED BEFORE THE ASSESSING OFFICER. THERE IS NOTHING ON RECORD TO SHOW THAT THESE PROMISSORY NOTES, CLAIMED TO HAVE BEEN ISSUED BY SHRI PURATCHIDASAN, WERE PART OF THE SEIZED RECORDS. AS SESSEE HAS SHOWN NO REASON AS TO WHY SUCH PROMISSORY NOTES WERE NOT PRODUCED BEFORE THE A.O. WE ARE OF THE OPINION THAT IN SUCH A SITU ATION, THE CIT(APPEALS) WAS ABSOLUTELY JUSTIFIED FOR REJECTING THE CLAIM OF THE ASSESSEE. CIT(APPEALS) GAVE CONSIDERABLE RELIEF TO THE ASSESS EE BASED ON THE AGREEMENT WHICH WAS ALLEGEDLY CANCELLED, WHICH ITSE LF IN OUR OPINION WAS 7 I.T.(SS) A. NO. 28/MDS/11 NEVER ESTABLISHED TO BE THE SOURCE FOR THE RECEIPT. WE ARE OF THE OPINION THAT THE ASSESSEE HAS BEEN GIVEN MORE THAN ELIGIBLE RELIEF BY THE CIT(APPEALS) AND NO INTERFERENCE IS CALLED FOR IN H IS ORDER. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, TH E 15 TH OF JUNE, 2012, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 15 TH JUNE, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, CHENNAI-34 (4) CIT, CENTRAL-II CHENNAI (5) D.R. (6) GUARD FILE