The ACIT, 2(1), Bhopal V. Om Prakash Chourasia, Vidisha

ITSSA 387/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9462 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-09-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 17-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: S S DESH
• Keywords: Unexplained expenditure; Loose papers; Document seized; Source of fund; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AASPC3459R I.T(SS).A.NO. 387 /IND/201 2 A.Y. : 2003-04 ACIT, 2(1), BHOPAL VS. SHRI OM PRAKASH CHAURASIYA, PROP. OM AGENCIES, TYONDA ROAD, GANJBASODA, VIDISHA. APPELLANT RESPONDENT APPELLANT BY : S MT. MRIDULA BAJPAI, SR. DR RESPONDENT BY : SHRI S.S. DESHPANDE, C. A. DATE OF HEARING : 02 . 0 9 .201 3 DATE OF PRONOUNCEMENT : 25 . 0 9 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 30.08.2012 FOR THE ASSE SSMENT YEAR 2003-04 IN THE MATTER OF ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. FOLLOWING GROUND HAS BEEN TAKEN BY THE REVENUE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 2,28,806/-, RS. 2,55,250/-, RS. 5,08,215/-, RS. 45,627/-, RS. 1,50,005/- RS. 1,13,000/- OF ASSESSMENT YEAR 2003-04 MADE BY THE ASSESSING OFFICER, ON ACCOUNT OF PAYMENT MADE FROM UNDISCLOSED SOURCES. 3. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS CA RRYING ON THE BUSINESS OF TRADING IN TWO WHEELERS AND THEIR SPARE PARTS IN THE TOWN OF GANJ BASODA. SEARCH U/S 132 OF THE INCO ME-TAX ACT, 1961, WAS CONDUCTED ON THE ASSESSEES FAMILY O N 22.01.2009. SUBSEQUENTLY NOTICES U/S 153A WERE ISSU ED AND AFTER ISSUING OTHER STATUTORY NOTICES, THE ASSESSME NTS WERE COMPLETED MAKING VARIOUS ADDITIONS. DURING THE COUR SE OF ASSESSMENT U/S 153A, AN ADDITION OF RS. 2,28,806/- WAS MAD ON THE BASIS OF LOOSE PAPER NO. LPS 6 PAGE 5 OF THE SEIZED DOCUMENTS. THE ASSESSING OFFICER HAS MADE THIS ADDI TION FOR THE REASON THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE NATURE -: 3: - 3 AND POSSESSION OF THE LOOSE PAPER AND TRANSACTIONS CONTAINED THEREIN. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 8.3 I HAVE GONE THROUGH THE OBSERVATIONS OF THE A O AND SUBMISSIONS OF THE APPELLANT. IT IS NOTICED THAT THE APPELLANT HAS PREPARED MEMORANDUM CASH BOOK ON THE BASIS OF LOOSE PAPERS SEIZED DURING SEARCH. THE CAS H CHART PREPARED, AFTER INCORPORATING RECEIPTS AND PAYMENTS APPEARING IN THE LOOSE PAPERS, WAS PRODUCE D BEFORE THE ASSESSING OFFICER, BUT NO DEFECTS WERE P OINTED OUT BY HER. THE AMOUNT OF RS.2.28,506/- UNDER REFERENCE IS VERIFIABLE FROM THE CHART PREPARED. UNDER THESE CIRCUMSTANCES, NO ADDITION, WITHOUT DISPROVIN G THE CORRECTNESS OF THE CASH CHART IS JUSTIFIED. THEREFO RE, THE SAME IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 5. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. THE ASSESSING OFFICER HAS MADE ADDITION WI TH REFERENCE TO THE LPS 6 PAGE 5 AS FOUND DURING COUR SE OF SEARCH, WHICH INDICATED A LOAN OF RS. 4 LAKHS TAKEN BY THE -: 4: - 4 ASSESSEE ON 1.10.2001 AND THEREAFTER, THERE WERE EN TRIES REFLECTING REPAYMENT OF LAND AND INTEREST THEREON. AS THE ENTRY OF RS. 4 LAKHS WAS AS ON 1 ST OCTOBER, 2001, WHICH FALLS OUTSIDE THE BLOCK PERIOD, NO ADDITION WAS MADE BY THE ASSES SING OFFICER. THEREAFTER, REPAYMENT OF RS. 1.00 LAKH, RS . 0.50 LAKH AND RS. 0.25 LAKH WAS SHOWN ON 14.10.2002 AND 10.7. 2002 AND 30.10.2002 RESPECTIVELY. THIS REPAYMENT WAS OUT OF LOAN OF RS. 4 LAKHS TAKEN BY THE ASSESSEE, THEREFORE, TH E SOURCE OF REPAYMENT WAS THERE. WE FOUND THAT THERE WAS PAYMEN T OF INTEREST OF RS. 13,436/-, RS. 4,851/- & RS. 5708/-, WHICH WAS NOT FOUND TO BE RECORDED IN THE REGULAR BOOKS OF AC COUNT. ACCORDINGLY, WE CONFIRM THE ADDITION OF RS. 13,436/ -, RS. 4851/- AND RS. 5,708/- WHICH WAS PAID BY THE ASSESS EE OUT OF UNDISCLOSED SOURCES. AN ADDITION OF RS. 2,55,250/- WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF NOTINGS IN LPS-6 6. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 9.3 I HAVE GONE THROUGH OBSERVATIONS OF THE ASSES SING OFFICER AND SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE AND ALSO THE RELEVANT SEIZED PAPER. IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT FOUND ANY -: 5: - 5 EVIDENCE SUBSTANTIATING THE REPAYMENT OR THE BALANC E. THEREFORE, I AM OF THE OPINION THAT THE ASSESSING OFFICERS ACTION OF PRESUMING REPAYMENT OR LOAN WITHOUT ANY SUPPORTING MATERIAL IS NOT CO RRECT. THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE, HENCE, D ELETED. THIS GROUND OF APPEAL IS ALLOWED. 7. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. AN ADDITION OF RS. 2,55,250/- WAS APPEARI NG AS AN OUTSTANDING LOAN OUT OF INITIAL LOAN OF RS. 4 LAKHS TAKEN BY THE ASSESSEE. NEITHER IT INDICATED ANY ADDITIONAL LOAN TAKEN NOR REPAYMENT OF LOAN, ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION OF RS . 2,55,250/- SHOWN AS BALANCE OF LOAN AS ON 8.12.2002 IN LPS 6. 8. AN ADDITION OF RS. 45,627/- WAS MADE WITH REFERENCE TO LPS 6 PAGE 5 BY OBSERVING THAT INTEREST OF RS . 45,627/- ON THE LOAN WAS FOUND TO HAVE BEEN PAID AND THE SAM E WAS ADDED AS PAYMENT OUT OF UNDISCLOSED SOURCES. SIMILA RLY, AN ADDITION OF RS. 1,50,005/- WAS MADE ON THE BASIS OF LPS PAGE 5, BY OBSERVING THAT AS PER THE LOOSE PAPER RE FERRED TO ABOVE, AN UNPAID BALANCE OF RS. 1,50,005/- OUT OF T HE LOAN -: 6: - 6 REFERRED IN PARA 9 ABOVE WAS FOUND AND THE ASSESSIN G OFFICER HAD PRESUMED THAT THE SAME WAS PAID OUT OF UNDISCLO SED SOURCES, HENCE, ASSESSING OFFICER MADE THE ADDITION . 9. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. LPS PAGE 5 INDICATED PAYMENT OF INTEREST O F RS. 45,627/-, WHICH WAS NOT RECORDED IN THE REGULAR BOO KS OF ACCOUNT. ACCORDINGLY, WE CONFIRM THE ADDITION OF RS . 45,627/- AS UNEXPLAINED EXPENDITURE. BALANCE ADDITION OF RS. 1,50,005/- WAS NOT JUSTIFIED IN SO FAR AS THE ASSES SEE HAS NEITHER REPAID ANY LOAN NOR IT INDICATES TAKING OF ANY NEW LOAN. IT WAS MERE BALANCE OF UNPAID LOAN. ACCORDINGLY, NO INTERFERENCE IS REQUIRED IN THE ORDER OF CIT(A) WIT H REGARD TO DELETION OF ADDITION OF RS. 1,50,005/- 10. AN ADDITION OF RS. 1,13,000/- WAS MADE ON THE BASIS OF NOTING ON LPS-6 PAGE 8 BY OBSERVING THAT THIS AM OUNT WAS PAID FROM UNEXPLAINED SOURCES. 11. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED ADDIT ION OF RS. 1,13,000/- BY OBSERVING THAT ASSESSING OFFI CERS ACTION OF PRESUMING REPAYMENT OF LOAN WITHOUT ANY SUPPORTI NG MATERIAL WAS NOT CORRECT. -: 7: - 7 12. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. WE HAVE VERIFIED LPS 6 PAGE 8, WHEREIN WE DO NOT FIND ANY SUCH ENTRY OF THE REPAYMENT OF LOAN. ACCOR DINGLY, THERE IS NO NEED TO INTERFERE IN THE ORDER OF CIT(A ) FOR DELETING ADDITION OF RS. 1,13,000/- WHICH WAS MADE BY THE AS SESSING OFFICER BY PRESUMING REPAYMENT OF LOAN. 13. AN ADDITION OF RS. 5,08,215/- WAS MADE BY THE ASSESSING OFFICER BY OBSERVING THAT AS PER DETAILS AVAILABLE IN LOOSE PAPER NO. LPS 6 PAGE 6 & 7, THE ASSESSEE HAS REPAID RS. 5,08,215/- IN THE ASSESSMENT YEAR 2003-04, NO EXPLA NATION REGARDING THE SOURCE OF SUCH REPAYMENT WAS FURNISHE D. THEREFORE, ASSESSING OFFICER HAS MADE THIS ADDITION . 14. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 10.3. I HAVE GONE THROUGH THE RELEVANT LOOSE PAPER, THE COPY OF PANCHNAMA PRODUCED, THE ASSESSMENT ORDE R AND THE SUBMISSION OR THE LD. AR. IT IS FOUND THAT AS PER PANCHNAMA DATED 22.01.2009, LPS-6. WAS SEIZED FROM SHRI DCEPAK CHOURASIA. IT IS ALSO SEEN THAT THE APPELLANT'S NAME IS NOWHERE MENTIONED ON THE -: 8: - 8 PAPER AT ANY PLACE. I HAVE ALSO VERIFIED THE CASH CHART FILED BY SHRI DEEPAK CHOURASIA IN HIS APPEAL PROCEEDINGS AND PAYMENT OF RS. 1,00,000/- ON 22.04.2002 IS DULY RECORDED IN THE CASH CHART ON THAT DATE. UNDER THESE CIRCUMSTANCES, NO ADDITION IS CALLED FOR ON THE BASIS OF THE ABOVE LOOSE PAPER . THIS GROUND OF APPEAL IS, ACCORDINGLY , ALLOWED AND THE ADDITION OF RS.5,08,215/- IS DELETED. 15. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. AN ADDITI ON OF RS. 5,08,215/- WAS MADE ON THE BASIS OF NOTINGS ON LPS PAGE 6 & 7. AS PER ASSESSING OFFICER, THERE WAS NO EXPLANATION REGARDING REPAYMENT OF LOAN. WE FOUND THAT OUT OF A MOUNT OF RS. 5,08,215/- AVAILABLE FUND WITH THE ASSESSEE OUT OF LOAN OF RS. 4 LACS TAKEN ON 1.10.2001 WAS RS. 2,25,000/- ( RS. 4 LAKHS (-) RS. 1 LAKH (-) RS. 50,000/- (-) RS. 25,000/-). TO THE EXTENT OF RS. 2.25 LAKHS, SINCE THE SOURCE OF FUND WAS AVAILA BLE, THERE WAS NO MERIT IN THE ADDITION MADE BY THE ASSESSING OFFICER. IT APPEARS THAT THE CIT(A) HAS DELETED THE ADDITION JU ST BY MENTIONING THAT ENTRY FOUND IN THE LOOSE PAPER WAS DULY INCORPORATED IN THE CASH CHART FILED BY THE ASSESSE E. HOWEVER, -: 9: - 9 NO FINDING HAS BEEN GIVEN BY THE LD.CIT(A) AS PER T HE CASH CHART, WHICH WAS NOT FILED BEFORE THE ASSESSING OFF ICER NOR THERE IS A FINDING BY CIT(A) TO THE EFFECT THAT FUN DS WERE AVAILABLE WITH THE ASSESSEE. ACCORDINGLY, ADDITION OF RS. 2,33,215/- ( RS. 5,08,215/- (-) RS. 2.25 LAKHS ) IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER VERIFYING THE CASH CHART ALLEGED TO BE FILED BY THE ASSESSEE. IF THE CASH CHART PROVES THE AVAILABILITY OF THE CASH WITH THE ASSESSEE, NO ADDITION IS WARRANTED. WE DIRECT ACCOR DINGLY. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 25TH SEPTEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH SEPTEMBER, 2013. CPU* 4.25.9