DCIT, CC-II, Kolkata, Kolkata V. M/s. Avani Buildwell Pvt. Ltd., Kolkata

ITSSA 3/KOL/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0735 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Document seized; Documents seized
• Section: 69C; 133A; 132

Judgement Text

I.T. (SS) A. NO S . 03 & 04 / KOL ./20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T. (SS) A. NO S . 03 & 04 / KOL / 20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 DEPUTY COMMISSIONER OF INCOM E TAX, ............. ... .. .APP ELL ANT CENTRAL CIRCLE - II, KOLKATA, 18, RABINDRA SARANI, KOLKATA - 700 001 - VS. - M/S. AVANI BUILDWELL PVT. LTD.,.......... ....... ... . RESPONDENT 59A, CHOWRINGHEE ROAD, KOLKATA - 700 016 [PAN : AACCA 0985 H] APPEARANCES BY: SHRI VIJAY KUMAR , CIT, D.R., FOR THE DEPARTMENT SHRI RAVI TULSIYAN, FCA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 0 9 , 2 01 5 DATE OF PRONOUNCING THE ORDER : APRIL 09 , 201 5 O R D E R PER P.K. BANSAL : BOTH THESE A PPEAL S HA VE BEE N FILED BY THE REVENU E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , CENTRAL - III, KOLKATA , BOTH D ATED 1 1 . 11 .20 11 FOR THE ASSESSMENT YEAR S 200 5 - 0 6 & 2006 - 07 RESPECTIVELY. 2. THE ONLY ISSUE INVOLVED IN THESE APPEALS RELATES TO THE DELETION OF THE ADDITION OF RS.14,00,000/ - IN ASSESSMENT YEAR 2005 - 06 AND RS.11,16,000/ - IN ASSESSMENT YEAR 2006 - 07 ADDED BY THE ASSESSING OFFICER AS UNEXPLAINED EXPENSES FOUND RECORDED IN THE SEIZED DOCUMENTS. I.T. (SS) A. NO S . 03 & 04 / KOL ./20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 PAGE 2 OF 5 3. BRIEF FACTS RELATING TO THE SE APPEALS ARE THAT A S EARCH AND SEIZURE OPERATION WAS CARRIED OUT UNDER SECTION 132 IN THE CASE OF AVANI GROUP OF COMPANIES AT THE OFFICE PREMISES OF M/S. AVANI PROJECT & INFRASTRUCTURE LIMITED AT 59A, CHOWRINGHEE ROAD, KOLKATA - 20 AND AT THE RESIDENCE OF THE COMMON DIRECTORS OF THE ASSESSEE - COMPANY MR. SHANTI LAL DAGA AND MR. ANIRUDHA DAGA ON 30.08.2007 AND ON SUBSEQUENT DATES. IT WAS INFORMED AT THE TIME OF ASSESSMENT THAT THE ASSESSEE - COMPANY WAS AMALGAMATED WITH EFFECT FROM 01.04.2007 WITH AVANI GRIHA NIRMAN PVT. LTD. HAVIN G ITS REGISTERED OFFICE AT 59A, CHOWRINGHEE ROAD, KOLKATA - 700 020. BOOKS OF ACCOUNT AND DOCUMENTS BELONGING TO THE ASSESSEE - COMPANY WERE ALSO FOUND AND SEIZED FROM THE RESIDENCE OF THE DIRECTORS OF THE ASSESSEE - COMPANY SHRI SHANTI LAL DAGA AND SHRI ANIRUDH A DAGA AS WELL AS FROM THE OFFICE OF M/S. AVANI PROJECT & INFRASTRUCTURE LTD. A SEARCH WAS ALSO CONDUCTED AT THE RESIDENCE OF SHRI SUSHIL KUMAR MOHANKA, DIRECTOR OF M/S. AVANI ABASON PVT. LTD., A GROUP COMPANY. SIMULTANEOUSLY A SURVEY UNDER SECTION 133A WA S ALSO CONDUCTED AT THE BUSINESS PREMISES OF SHRI SUSHIL KUMAR MOHANKA AT M/S. TECHNO ELECTRIC CORPORATION, 36, EZRA STREET, KOLKATA - 700 001, WHO WAS A SHAREHOLDER IN THE ASSESSEE - COMPANY. NOTICE S UNDER SECTION 153C W ERE SERVED ON THE ASSESSEE ON 27.03.200 9 FOR THE RETURNS FOR THE ASSESSMENT YEARS 2002 - 03 TO 2007 - 08. THE ASSESSEE REQUESTED TO TREAT THE ORIGINAL RETURN FILED UNDER SECTION 139(1) AS THE RETURN FILED IN PURSUANCE TO THE NOTICE UNDER SECTION 153C. 4. DURING THE SURVEY DOCUMENTS MARKED TEC - 1 WA S IMPUGNED. PAGE 39 OF THE IMPUGNED DOCUMENTS CONTAINED DETAILS OF RECEIPT AND PAYMENT IN THREE PROJECTS NAMELY 63 PROJECTS , 21 PROJECTS , AND GARIA PROJECTS . SHRI SUSHIL KUMAR MOHANKA IN HIS STATEMENT EXPLAINED THAT PAGE 39 RELATES TO THREE PROJECTS OF THE AVANI GROUP AT SARAT CHATTERJEE ROAD, GARIA AND SOUTHERN AVENUE WHERE THE FUNDS WERE ARRANGED BY HIM. THE RECEIPT DENOTES FUNDS RECEIVED BY AVANI ON VARIOUS DATES AND THE REFUND DENOTES FUNDS REFUNDED TO THE FINANCIERS ON DIFFERENT DATES. THE ASSESS ING OFFICER NOTED THAT THE GARIA PROJECT WAS UNDERTAKEN BY THE I.T. (SS) A. NO S . 03 & 04 / KOL ./20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 PAGE 3 OF 5 ASSESSEE - COMPANY DURING THE IMPUGNED ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 RESPECTIVELY. 5. THE ASSESSEE HAS SHOWN REFUND AMOUNTING TO RS.14,00,000/ - AND RS.11,16,000/ - RESPECTIVELY. THE ASSESS ING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THAT WHOLE OF THE DOCUMENTS TO BE READ TOGETHER IN THE DOCUMENTS MARKED UNDER THE GARIA PROJECT AND THEREFORE, THE SOURCE OF THESE AMOUNTS WAS SELF EXPLAINED. THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(APPEALS). 6. LD. CIT(APPEALS) DELETED THE ADDITION IN BOTH THE ASSESSMENT YEARS BY OBSERVING AS UNDER: - I HAVE CAREFULLY PERUSED THE COPY OF THE RELEVANT DOCUMENT . IN R ESPE CT OF GARIA PROJECT THIS DOCUMENT SHOWS DATE - WISE RECEIPT OF R S.30.90 LAKHS AND ALSO DATE - W I SE REFUND OF RS.27 . 91 LAKHS . THE RECEIPTS RELATE TO THE PERIOD FROM 24.01 . 1997 TO 12.0L . 1998 AN D THE REFUND R ELATES TO THE PERIOD F R OM 12.02.2000 TO OS . 12 . 200S. THUS THE REFUND RELATED TO A . Y . 0 4 - 0 5 , 05 - 06 & 06 - 07 STOOD AT RS . L LAKH , RS . 14 LAKHS AND RS. 1 L . 16 LAKHS RESPECTIVELY. THE E NTI R E RE CEIPTS PERTAINED TO THE PERIOD PRIOR TO THE PERIOD COVERED U/S . LS3C OF THE LT . ACT 1961 . HE NCE NO ACTION COULD BE TAKEN ALTHOUGH THESE WERE UNDISCLOSED RECEIPTS . THE REFUNDS GIVEN OUT OF T H ESE RECEIPTS IN THESE THREE ASSESSMENT YEARS WERE TREATED AS UNEXPLAINED EXPENDITURE OF THE A PPEL L A NT . I AM INCLINED TO AGREE WITH THE APPELLANT'S CONTENTION THAT THE ENTRIES AND THE NOTINGS IN T HE I MPUGNED D O CUMENT ARE TO BE ACCEPTED AS A WHOLE AND NOT PA RTLY ON SELECTIVE BASIS. THE A . O. CAN NOT USE THAT PART OF THE DOCUMENT WHICH IS BENEFICIAL TO THE DEPARTMENT AND REJECT THE OTHER PA R T W H IC H I S DETRIMENTAL TO IT . THE A . O. HIMSELF HAS DISCUSSED THAT THE SEIZED DOCUMENT RECORDS R ECE IPTS FIRST A ND ONL Y THE REAFTER THE REFUNDS. THESE REFUNDS ARE CERTAINLY MADE OUT OF THE SAID R ECE I PTS . T HER E I S NO DOUBT THAT THE SOURCE OF THE REFUNDS AS NOTED IN THE SEIZED DOCUMENTS ARE FULLY EX PLA IN E D B Y T HE EARLIER RECEIPTS ALSO RECORDED THEREIN. THE AMOUNT OF THE RECEIPTS COULD NOT BE BR OU GHT T O TA X BECAUSE OF LIMITATION PROVISIONS BUT THAT DOES NOT MAKE RECEIPT OF THE MONEY UNREAL . O NCE T HE SEIZED IMPUGNED DOCUMENT IS ACCEPTED IN TOTALITY NO DOUBT REMAINS THAT THERE WERE REC E IPTS AMOUNTING TO RS . 30 . 90 LAKHS OUT OF WHICH TO TAL AMOUNT OF RS.27.91 LAKHS HAVE BEEN R E F UN DED ON DIFFERENT DATES. THE REFUNDS PERTAINING TO THE 3 ASSESSMENT YEARS UNDER CONSIDERATION A RE A P A RT OF THE TOTAL AMOUNT OF REFUND . THUS THE SOURCE S OF THESE REFUNDS ARE TOTALLY EXPLAINED TO BE O UT O F T HE UNDI S C LOSED RECEIPTS . THE UNDISCLOSED RECEIPTS COULD HAVE BEEN BROUGHT TO TAX HAD THOSE B E EN NOT AFFECTED B Y I.T. (SS) A. NO S . 03 & 04 / KOL ./20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 PAGE 4 OF 5 THE LIMITATION PROVISIONS AND THE REFUND MADE OUT OF SUCH RECEIPTS WOULD NOT H A V E BEE N T AX ED . THE PROVISION OF SECTION 69C OF THE I T . ACT REFERS TO EXP ENDITURE WHICH ARE U N E X PLAI N E D. HERE THE E X PENDITURE ON AL C . OF REFUNDS HAVE BEEN EXPLAINED WITHOUT ANY REASONABLE DOUBT TO HA V E BEEN M A DE OUT OF THE UNDISCLOSED RECEIPTS ALTHOUGH THE RECEIPTS COULD NOT BE TAXED B E C AU S E O F LIM I T A T IO N . THEREFORE , I HOLD THA T THESE EXPENSE ON ACCOUNT OF REFUND HAVE BEEN S AT I SFAC TO R I L Y E X P L A IN E D A N D CAN NOT BE ADDED U / S . 69C AS UNE X PLAINED EXPENDITURE. THEREFORE, THE A.O. IS DIRECTED TO DELETE THE ADDITIONS MADE ON THIS ACCOUNT FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERA TION . 7. WE HAVE CAREFULLY PERUSED THE SAME DOCUMENTS, THE PHOTO - COPY OF WHICH PRODUCED BEFORE US, WE NOTED THAT THESE DOCUMENTS UNDER THE HEAD GARIA PROJECT S CONSISTS OF RECEIPT ON THE LEFT SIDE AND REFUND ON THE RIGHT SIDE. THE ASSESSING OFFICER WHIL E MAKING THE ADDITION IN RESPECT OF THE UNEXPLAINED EXPENDITURE HAS ONLY TAKEN THE REFUND BUT IGNORED THE RECEIPTS. WE CANNOT TAKE THE DOCUMENTS IN PART. BOTH THE SIDES OF THE DOCUMENTS ARE TO BE READ TOGETHER. WE NOTED THAT IN THE RECEIPT COLUMN OF GARIA PROJECT S, THE AMOUNT SHOWN A T RS.30.90 ON THE LEFT SIDE WHILE IN THE REFUND SIDE, THE TOTAL SHOWN AT RS.27.91. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION IN BOTH THE ASSESSMENT YEARS . WE ACCORDINGLY DISMISSED THE GROUNDS RAISED BY THE REVENUE IN BOTH THE ASSESSMENT YEARS. 8 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE REVENUE ARE DISMISS ED . ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH APRIL , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 09 TH D AY OF APRIL , 201 5 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - II, KOLKATA, 18, RABINDRA SARANI, KOLKATA - 700 001 (2) M/S. AVANI BUILDWELL PVT. LTD., 59A, CHOWRINGHEE ROAD, KOLKATA - 700 016 I.T. (SS) A. NO S . 03 & 04 / KOL ./20 12 ASSESSMENT YEAR S : 200 5 - 20 0 6 & 2006 - 2007 PAGE 5 OF 5 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .