M/s. Arvindbhai Hirenbhai, Ahmedabad V. The Dy.CIT.,C.C.1(2), Ahmedabad

ITSSA 316/AHD/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3800 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2014-2015
• Appeal Filed On: 11-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: PF JAIN
• Keywords: Income from undisclosed sources; Source of fund
• Section: 143(3); 131; 68; 132

Judgement Text

ITA NO.316/AHD/2016 A.Y. 2014-15 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.316/AHD/2016 ASSESSMENT YEAR: 2014-15 M/S. ARVINDBHAI HIRENBHAI, VS. DY. COMMISSIONER OF INCOME TAX, ZAVERI CHAMBERS, CENTRAL CIRCLE 1(2), AHMEDAB AD. RATANPOLE, ZAVERIWAD, AHMEDABAD 380 001. [PAN AAVFA 3667 Q] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.F. JAIN, A.R. RESPONDENT BY : SHRI O.P. VAISHNAV, CIT(D.R. ) DATE OF HEARING : 25.04.2018 DATE OF PRONOUNCEMENT : 04.06.2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: 1. ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF LD. CIT(A) DATED 20 TH SEPTEMBER, 2016 PASSED FOR A.Y. 2014-15. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS.38,50,000/-. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) WAS CARRIED OUT B Y DDIT (INVESTIGATION) UNIT, MUMBAI IN THE CASE OF 4 TRUCKS AT MUMBAI CENTRAL RAILWAY S TATION. DURING THE SEARCH CONDUCTED ON 01.07.2013, A STATEMENT OF SHRI MOHANL AL SOMJI PRAJAPATI WAS RECORDED UNDER SECTION 132(4) OF THE ACT. SHRI PRAJAPATI WA S CARRYING A BAG CONTAINING CASH OF RS.35,00,000/- AND HE WAS AN EMPLOYEE OF THE ASSESS EE. HE ADMITTED THAT THE SAID CASH WAS HANDED OVER TO HIM BY SHRI BIPIN CHANDRA S . PANDEY, PARTNER OF THE ASSESSEE FIRM. HENCE THE ASSESSEE ACCEPTED THAT CA SH BELONGED TO HIS FIRM AND OFFERED FOR TAXATION. ON 3 RD MARCH 2014 A BAG OF CASH CONTAINING RS.38,50,000/- WAS STOLEN. THE ASSESSEE REPORTED THE MATTER TO THE PO LICE AND THIS CASH WAS RECOVERED BY POLICE. THE ASSESSEE APPLIED FOR RELEASE OF THE CASH BEFORE THE JUDICIAL ITA NO.316/AHD/2016 A.Y. 2014-15 PAGE 2 OF 3 MAGISTRATE. HOWEVER, ITS APPLICATION WAS REJECTED ON 14.03.2014. THE ASSESSEE THEREAFTER FILED A REVISION BEFORE THE ADDITIONAL S ESSION JUDGE BEARING NO.30/2014. LEARNED ADDITIONAL SESSION JUDGE ON 14 TH APRIL 2014 DIRECTED THE REGISTRY TO RELEASE THE CASH TO THE ASSESSEE ON A SURETY BOND OF RS.60, 00,000/-. IN THIS WAY, CASH WAS GIVEN BACK TO THE ASSESSEE. LD. ASSESSING OFFICER SOUGHT EXPLANATION OF THE ASSESSEE ABOUT SOURCE OF FUND. IN RESPONSE TO THE QUERY OF ASSESSING OFFICER, IT WAS CONTENDED THAT THIS AMOUNT WAS RECEIVED FROM VARIOU S PARTIES AND IT WAS TO BE DELIVERED TO OTHER PARTIES. A LIST CONTAINING NAME OF PERSONS TO WHOM IT WAS TO BE DELIVERED WAS FOUND IN THE BAG ITSELF. THE ASSESSE E SUBMITTED A LIST OF NAMES AND PHONE NUMBERS OF THE PERSONS FROM WHOM CASH WAS REC EIVED AND IT WAS TO BE DELIVERED. LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ANGADIA IT WAS UNNECESSARILY KEEPING HUGE CASH BALANCE IN THE CASH BOOK WITH ULTERIOR MOTIVE. HENCE, HE DID NOT ACCEPT THE EXPLANATION OF THE ASS ESSEE AND MADE ADDITION OF RS.38,50,000/- WITH THE AID OF SECTION 68 AS UNEXPL AINED CASH CREDIT. 4. DISSATISFIED WITH THE ADDITION, THE ASSESSEE CAR RIED THE MATTER BEFORE THE LD CIT(A). LD. CIT(A) CONFIRMED THE ADDITION BY OBSER VING AS UNDER :- THE FACTS OF THE CASE, SUBMISSIONS OF THE APPELLAN T AND FINDINGS OF THE AO HAVE BEEN PERUSED. THE CONTENTION OF THE AP PELLANT THAT THE CASH FOUND IN THE POSSESSION OF THE POLICE BELONGED TO V ARIOUS PARTIES AND THE PARTICULARS OF THE PERSONS TO WHOM THE CASH WAS TO BE DELIVERED WERE FURNISHED TO THE DDIT (INV), AHMEDABAD WAS CONTRARY TO THE VERY FACT THAT SHRI VIPIN CHAND S. PANDEY IN HIS STATEMENT RECORDE D U/S 132(4) AND ALSO IN THE STATEMENT RECORDED U/S 131 OF THE ACT CONFIR MED THAT THE CASH WAS UNACCOUNTED INCOME FROM THE COMMISSION BUSINESS OF THE FIRM FOR THE A.Y. 2013-14 WAS NOT REBUTTED BY THE APPELLANT IN T HE ASSESSMENT PROCEEDINGS NOR IN THE APPEAL PROCEEDINGS. IN VIEW OF THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, IN MY CONSIDERED OPINION THE ACTION OF THE AO DOES NOT WARRANT ANY INTERFERENCE. ACCORDINGLY, TH E GROUND OF APPEAL IS DISMISSED. 5. WITH THE ASSISTANCE OF LD. REPRESENTATIVES WE HA VE GONE THROUGH THE RECORDS CAREFULLY. A PERUSAL OF THE RECORDS WOULD INDICATE THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS MIXED THE FACTS WITH TWO INCIDENTS. THE ADDITION OF RS.38,50,000/- MADE BY THE ASSESSING OFFICER IS THE AMOUNT WHICH WAS RE COVERED BY THE POLICE. IT WAS NOT SEIZED IN THE SEARCH CONDUCTED BY THE INCOME TAX DE PARTMENT UNDER SECTION 132 OF THE ACT. IT IS ALSO PERTINENT TO OBSERVE THAT THE ASSESSEE SUBMITTED THE NAMES AND PHONE NUMBERS OF THE SENDERS AS WELL AS RECEIVERS. LD. ASSESSING OFFICER DID NOT ITA NO.316/AHD/2016 A.Y. 2014-15 PAGE 3 OF 3 CARRY OUT ANY EXERCISE TO FIND OUT THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. IT IS ALSO PERTINENT TO OBSERVE THAT THE ASSESSMENT ORDER HAS BEEN PASSED UNDER SECTION 143(3) READ WITH SECTION 153B OF THE ACT. BUT NO E VIDENCE WAS FOUND SHOWING THAT SUM OF RS.38,50,000/- WAS AN UNEXPLAINED AMOUNT OF THE ASSESSEE. THIS EVIDENCE WAS NOT UNEARTHED IN THE SEARCH CONDUCTED BY THE DE PARTMENT UNDER SECTION 132 OF THE ACT. WHATEVER EVIDENCE FOUND DURING THE SEARCH OF THE DEPARTMENT, THE ASSESSEE HAS ALREADY ADMITTED THAT INCOME AND WAS OFFERED FO R TAXATION. QUA THE SECOND ITEM, NO SEARCH WAS CONDUCTED AND SECOND INCIDENT TAKEN P LACE ON 03.03.2014 WHEREAS THE FIRST ONE TOOK PLACE IN 1 ST JULY, 2013. THUS, LEARNED REVENUE AUTHORITIES HAV E FAILED TO BRING ANY MATERIAL ON RECORD SHOWING THAT CASH SEIZED BY THE POLICE WAS UNEXPLAINED. IT HAS FAILED TO REBUT THE EVIDENCE S UBMITTED BY THE ASSESSEE. MOREOVER, IT CANNOT BE ADDED IN THE ASSESSMENT FRAM ED UNDER SECTION 153B OF THE ACT. WE ALLOW THE APPEAL OF THE ASSESSEE AND DELET E THE ADDITION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JUNE, 2018. SD/- SD/- AMARJIT SINGH RAJPAL YADAV (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 4 TH DAY OF JUNE, 2018 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER UE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD