Shri Janakbhai Patel, Bhavnagar V. The ACIT.,Circle-1, Bhavnagar

ITSSA 382/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0703 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2015
• Assessment Year: misc
• Appeal Filed On: 24-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Unexplained cash credit; Document seized; Opportunity of being heard; Documents seized
• Section: 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ IT(SS)A NO. 382/AHD/2011 % ) *)/ ASSESSMENT YEAR: BLOCK PERIOD [1.4.1988 TO 29.7.199 8] SHRI JANAKBHAI D-298, RAMNAGAR KALIABID, BHAVNAGAR. PAN: ADPPP 7742 L VS ACIT, CIR.1 BHAVNAGAR 364 001. +, / (APPELLANT) -. +, / (RESPONDENT) ASSESSEE(S) BY : SHRI SANJAY R. SHAH REVENUE BY : SHRI M.K. SINGH, SR.DR / DATE OF HEARING : 24/03/2015 / DATE OF PRONOUNCEMENT: 10/04/2015 // O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XX, AHMEDABAD DATED 27.1.2011. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE CIT(A) AS WELL AS THE A O IS BAD IN LAW AND ON FACTS. 2. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADDITION OF RS.2,48,770/- OUT OF ADDITION OF RS .2,94,882/- MADE BY THE AO ON ACCOUNT OF ALLEGED UNEXPLAINED CA SH CREDIT. 3. THE LED.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING ADDITION OF RS.1,52,748/- MADE BY THE AO ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS. IT(SS)A NO.382/AHD/2011 2 3. BRIEF FACTS OF THE CASE ARE THAT ADDITION OF RS. 2,94,882/- AND RS.1,52,748/- WAS MADE AS UNEXPLAINED CASH CREDIT A ND UNEXPLAINED CASH DEPOSIT BASED ON THE SEIZED DOCUMENTS AS PER A NNEXURE-2 AND ANNEXURE-3 RESPECTIVELY. THE ASSESSEE SUBMITTED BE FORE THE AO THAT THE TRANSACTIONS RELATED TO M/S.WHITE SILICO P. LTD . (WSPL) AND NOT THE ASSESSEE AND THAT THE SAID COMPANY HAD ALREADY FILE D RETURN OF INCOME ON 28.11.1997 WHEREIN THESE TRANSACTIONS WERE DULY REFLECTED. IT WAS FURTHER SUBMITTED THAT THE SAID RETURN WAS FILED BE FORE THE DATE OF SEARCH. THE ASSESSEE FILED ACCOUNT FROM THE BOOKS OF WSPL. ON VERIFICATION WITH THE TRANSACTIONS, THE AO NOTED TH AT IN THE NOTE BOOK WITH REFERENCE TO THE COPY OF THE ACCOUNT FILED, TH E ASSESSEE COULD NOT RECONCILE EACH AND EVERY ENTRY, BUT FEW ENTRIES ACC ORDING TO THE ASSESSEE WERE PERTAINING TO WSPL, COLD BE VERIFIED. 4. ON APPEAL, THE CIT(A) MADE TEST CHECK OF THE ACC OUNT IN THE LEDGER AND FOUND THAT THE SAME WERE APPEARING IN RE SPECT OF THE ENTRY OF WSPL, AND CONCLUDED THAT THE CONTENTION OF THE A SSESSEE THAT IT DID NOT RELATE TO THE ASSESSEE WAS CORRECT. 5. THE TRIBUNAL VIDE ITS ORDER DATED 13.10.2005 PAS SED IN IT(SS)A.NO.305 & 35 AND 304 & 36/A/2002 FOR THE BLO CK PERIOD 1.4.88 TO 29.7.98 RESTORED THE MATTER BACK TO THE FILE OF THE AO WITH OBSERVATION THAT THE CIT(A) HAS GIVEN A FINDING JUS T OPPOSITE TO THE FINDINGS OF THE AO, AND THEREFORE, IN THE INTEREST OF JUSTICE THE MATTER WAS RESTORED TO THE FILE OF AO TO DECIDE THE ISSUE AFTER CONSIDERING ALL THE DETAILS FURNISHED BY THE ASSESSEE AND AFTER ALL OWING OPPORTUNITY OF BEING HEARD. 6. THE AO IN COMPLIANCE TO THE SAID ORDER OF THE TR IBUNAL ISSUED NOTICE TO THE ASSESSEE UNDER SECTION 142(1) OF THE ACT ON 28.7.2006. AFTER CONSIDERATION SUBMISSIONS OF THE ASSESSEE, TH E AO OBSERVED THAT THE ADDITION OF RS.2,94,882/- PERTAINED TO UNEXPLAI NED CASH CREDITS REFLECTED IN THE SEIZED DOCUMENTS, A/2. THE ASSESS EE HAS SUBMITTED IT(SS)A NO.382/AHD/2011 3 THAT ALL ENTRIES ARE PERTAINING TO WSPL AND DULY AC COUNTED IN THE BOOKS OF ACCOUNTS OF THIS COMPANY. THE ASSESSEE FILED CO PY OF THE LEDGER ACCOUNT OF WSPL FOR TEST CHECK. HE OBSERVED THAT I T WAS FOUND THAT THE ASSESSEE HAS PRODUCED SOME DETAILS, WHICH WAS ALSO CONSIDERED IN THE ASSESSMENT ORDER UNDER SECTION 154BC DTD.30.7.2000. THE ASSESSEE MADE A VAIN ATTEMPT OF FILING ACCOUNT COPY FROM THE BOOKS OF WSPL TO SHOW THAT ALL ENTRIES OF A/2 WERE DULY REFLECTED TH EREIN. THE TRANSACTIONS NOTED IN THE SEIZED DOCUMENT A/2 WERE VERIFIED WITH REFERENCE TO THE COPY OF THE ACCOUNT FILED. THE AS SESSEE COULD NOT RECONCILE EACH AND EVERY ENTRY BUT ONLY FEW ENTRIES WERE RECONCILED DURING THE REGULAR ASSESSMENT PROCEEDINGS. NO FRES H EVIDENCE WAS BOUGHT ON RECORD DURING THE COURSE OF THE PRESENT A SSESSMENT PROCEEDINGS. THEREFORE, HE MADE ADDITION OF RS.2, 94,882/- AS UNEXPLAINED CASH CREDITS. FURTHER, THE AO OBSERVED THAT THE ADDITION OF RS.1,52,748/- PERTAINED TO UNEXPLAINED CASH DEPOSIT S REFLECTED IN SEIZED DOCUMENT A/3. IN THE ORIGINAL ASSESSMENT PROCEEDIN GS, THE ASSESSEE HAD OFFERED THE SAME EXPLANATION AS GIVEN FOR A/2. DURING THE PRESENT ASSESSMENT PROCEEDINGS ALSO THE ASSESSEE HAS NOT OF FERED ANY ADDITIONAL DETAILS. THEREFORE, IN THE ABSENCE OF F RESH EVIDENCE BEING BROUGHT ON RECORD BY THE ASSESSEE, THE TRANSACTION NOTED IN A/3 IS AGAIN CONSIDERED AS UNACCOUNTED CASH DEPOSIT OF THE ASSES SEE, AND ACCORDINGLY, MADE THE ADDITION OF THE SAME AS UNDIS CLOSED CASH DEPOSITS. 7. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION TO THE EXTENT OF RS.4,01,512 /- BY OBSERVING AS UNDER: 4.3(III) AS FAR AS THE ADDITION OF RS.2,94,882/- A ND RS.1,52,748/- IS CONCERNED, IT IS SEEN THAT THE AO HAS MADE THE DETAILED VERIFICATION IN RESPECT OF THE ACCOUNT FUR NISHED OF M/S.WHITE SILICO PRIVATE LTD. HAD HAVE ARRIVED AT T HE CONCLUSION THAT AN AMOUNT OF RS.46,112/- STANDS EXPLAINED. AF TER DETAILED ANALYSIS IN THE REMAND REPORT THE AO HAS HELD THAT THE DIFFERENCE IT(SS)A NO.382/AHD/2011 4 OF RS.4,01,512/- COULD NOT BE SATISFACTORILY EXPLAI NED. DURING THE COURSE OF REJOINDER APART FROM MAKING GENERAL SUBMI SSIONS THE AR OF THE APPELLANT COULD NOT SPECIFICALLY STATE HOW T HE SAID AMOUNT COULD BE EXPLAINED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO OF RS.2,24,882/- AND RS.1,52,748/- IS REDUCED TO RS.4, 01,512/-. 8. BEFORE US, THE AR OF THE ASSESSEE SUBMITTED THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN CONFIRMING THE AD DITION OF RS.4,01,512/- WHEN SOME OF THE ENTRIES IN THE SEIZED DOCUMENTS MA RKED AS A/2 AND A/3 WERE FOUND TALLYING WITH THE LEDGER ACCOUNT OF WSPL. 9. ON THE OTHER HAND, DR SUPPORTED THE ORDERS OF TH E LOWER AUTHORITIES. 10. WE FIND THAT IN THE INSTANT CASE THE ADDITION O F RS.2,94,882/- AND RS.1,52,748/- WAS MADE ON THE BASIS OF ENTRY MADE I N THE SEIZED DOCUMENTS MARKED AS A/2 AND A/3 BY THE AO. 11. ON APPEAL, THE CIT(A) AFTER CALLING REMAND REPO RT FROM THE AO FOUND THAT SOME ENTRIES TOTALING TO RS.46,112/- REL ATES TO M/S.WHITE SILICO P. LTD. (WSPL) ON THE BASIS OF LEDGER ACCOUN T OF WSPL. THE CIT(A), THEREFORE, DELETED THE ADDITION OF RS.46,11 2/- AND CONFIRMED THE BALANCE ADDITION OF RS.4,01,512/- WHICH DID NOT TALLY WITH THE LEDGER ACCOUNT OF WSPL. 12. BEFORE US, THE AR OF THE ASSESSEE CONTENDED THA T SAID SEIZED BELONGED TO WSPL AS EVIDENCED BY THE FACT THAT THE ADDITION OF RS.46,112/- MADE ON THE BASIS OF SAME SEIZED DOCUME NTS WAS DELETED BY THE CIT(A) ON THE GROUND THAT TRANSACTIONS RELAT ING TO THE SAME WERE REFLECTED IN THE BOOKS OF WSPL. 13. ON THE OTHER HAND, THE DR SUPPORTED THE ORDER O F THE CIT(A). IT(SS)A NO.382/AHD/2011 5 14. WE FIND THAT BOTH THE AUTHORITIES BEFORE US HAV E NOT PRODUCED COPY OF SEIZED DOCUMENTS MARKED AS A/2 AND A/3. IN THE ABSENCE OF THE SAME, ENTRIES MADE IN THE SEIZED DOCUMENTS AND WRITING THEREIN CANNOT BE APPRECIATED BY US. THEREFORE, WE ARE NOT IN A POSITION TO ADJUDICATE THE ISSUE COMPLETELY. THE ARGUMENT OF T HE ASSESSEE IS THAT THE SAID SEIZED DOCUMENTS MARKED A/2 AND A/3 BELONG ED TO WSPL AND NOT TO THE ASSESSEE. NO FINDING HAS BEEN RECORDED BY THE LOWER AUTHORITIES IN THIS REGARD, AS TO WHETHER THE SAID SEIZED DOCUMENTS BELONGED TO THE ASSESSEE OR TO WSPL AND HOW A PART OF THE ENTRIES NOTED IN THE SAID DOCUMENTS BELONGED TO THE ASSESSE E, WHEN OTHER TRANSACTIONS REFLECTED IN THE VERY SAME DOCUMENTS H AS BEEN HELD TO BE RELATED TO WSPL AND NOT THE ASSESSEE. IN THESE CIR CUMSTANCES, IN OUR CONSIDERED VIEW, IT SHALL BE JUST AND IN THE INTERE ST OF JUSTICE TO RESTORE THIS ISSUE BACK TO THE FILE OF AO FOR ADJUDICATION AFRESH BY PASSING A SPEAKING ORDER IN THE LIGHT OF THE OBSERVATIONS MAD E HEREINABOVE. NEEDLESS TO MENTION, THE AO SHALL ALLOW REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUD ICATING THE ISSUE AFRESH. THUS, THESE GROUNDS OF APPEAL OF THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSE. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 10 /04/2015