Shree Mahabir Timber Works, Kolkata V. ACIT, Central Circle - XXIII, Kolkata, Kolkata

ITSSA 53/KOL/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9215 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-05-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 01-04-2011
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: MANISH TIWARIFCA
• Keywords: Business income; Loose papers; Block assessment
• Section: 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [ () . .. . . .. . , ,, , , !'# $$% &' $$% &' $$% &' $$% &', ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI GEORGE MATHAN, JM] #) #) #) #) /IT(SS)A NO.53/KOL/2011 *'+ ',-/ BLOCK PERIOD: 01.04.1996 TO 28.10.2002 (&/ / APPELLANT ) - '' - ( 12&/ /RESPONDENT) SHREE MAHABIR TIMBER WORKS . A.C.I.T., CENTRAL CI RCLE-XXIII, KOLKATA -VERSUS- KOLKATA (PAN:AAGFM 3471 M) &/ 3 4 / FOR THE APPELLANT: SHRI MANISH TIWARI, FCA 12&/ 3 4 / FOR THE RESPONDENT: SHRI L.K.S.DEHIYA, CIT(DR) ''5 3 6 /DATE OF HEARING : 20.05.2013 7, 3 6 /DATE OF PRONOUNCEMENT : 20.05.2013. 8 / ORDER PER BENCH THE ASSESSEE IS IN APPEAL RAISING THE FOLLOWING GRO UNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) IS NOT JUSTIFIED IN PASSING ORDER DATED 06.03.2009 ON EXPARTE VIEW SINC E THE APPELLANT FIRM WAS PREVENTED BY COMPELLING REASONS FOR NON-COMPLIANCE OF NOTICES. 2. THAT HAVING REGARD TO THE MAGNITUDE OF UNDISCLOSED INCOME CONSIDERED IN THE BLOCK ASSESSMENT WHICH INVOLVES SUBSTANTIAL QUESTION OF L AW, LD.CIT(A) HAS ERRED IN PASSING EXPARTE ORDER ON TECHNICAL GROUND I.E. NON- COMPLIANCE OF NOTICES OF HEARING. 3. THAT WITHOUT PREJUDICE TO GROUND NO.1 & 2 AND ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE EXPARTE ORDER PASSED BY LD. CIT(A) IS OTHERWISE NOT MAINTAINABLE IN LAW AS IT FAILS TO DEAL WITH THE ME RIT OF ADDITIONS MADE IN ORDER U/S 158BC/143(3) DATED 23.07.2007. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) IS WRONG IN DISMISSING APPEAL WITHOUT ADJUDICATING GROUND NO.2 WHEREIN IT WAS STATED THAT THE ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.20 ,31,640/- TOWARDS STOCK OF TIMBER ALLEGED TO HAVE NOT BEEN EXPLAINED BY THE AP PELLANT FIRM. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) IS WRONG IN DISMISSING APPEAL WITHOUT ADJUDICATING GROUND NO.3 WHEREIN IT WAS STATED THAT THE ASSESSING OFFICER ERRED IN CONSIDERING TOTAL PURCHA SES AND TOTAL SALES AS PER SEIZED MATERIAL AS UNDISCLOSED INCOME. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) IS WRONG IN DISMISSING APPEAL WITHOUT ADJUDICATING GROUND NO.4 WHEREIN IT WAS STATED THAT THE IT(SS)A .NO.53/KOL/2011 SH RI MAHABIR TIMBER WORKS VS ACIT,CC-XXIII, KOLKATA, BLOCK PERIOD : 01.04.1996 TO 28.10.2002. 2 ASSESSING OFFICER PROCEEDED ON ERRONEOUS BELIEF IN DETERMINING UNDISCLOSED INCOME AS PER SEIZED MATERIALS AND/ OR VALUE OF STOCK AT R S.13,3-,32,200/-. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) IS WRONG IN DISMISSING APPEAL WITHOUT ADJUDICATING GROUND NO.5 WHEREIN IT WAS STATED THAT THE ASSESSING OFFICER SHOULD HAVE COMPUTED INCOME FROM TIMBER TRADING IN A PROPER AND REASONABLE MANNER AFTER ELIMINATING DUPLICATE E NTRIES FOUND IN DIFFERENT SEIZED RECORDS INSTEAD OF AGGREGATING ALL THE FIGURES OF P URCHASES, SALES, RECEIPTS AND PAYMENTS. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD A RE THAT A SEARCH OPERATION U/S 132(1) OF I.T.ACT, 1961 WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM ON 28.10,.2002. IN COURSE OF S EARCH, CERTAIN BOOKS OF ACCOUNT AND LOOSE PAPERS WERE SEIZED UNDER INVENTORY MARK JPB/1 TO JPB/25. IN RESPONSE TO NOTICE U/S 158BC RECEIVED O N 11.06.2004 THE ASSESSEE FILED BLOCK RETURN ON 23.12.2004 SHOWING UNDISCLOSED INCOME AS NIL (WRONGLY STATED IN THE ASSESSMENT ORDER AS RETURN FILED DECLARING TOTAL UN DISCLOSED INCOME OF RS.4,25,225/-). NOTICES U/S 143(2) AND 142(1) RECEIVED SUBSEQUENTLY COULD NOT BE COMPLIED AS THE BUSINESS OF THE FIRM WAS TOTALLY SUSPENDED FOR LAST MANY YEARS AND THE ONLY MALE PARTNER MR.SANJAY BHANIRAMKA SHIFTED TO MEGHALAYA FOR EARNI NG HIS LIVELIHOOD AND THE OTHER PARTNER SMT. SHARDA BHANIRAMKA WAS LOOKING AFTER HE R AILING HUSBAND SRI J.P.BHANIRAMKA WHO IS HIGHLY DIABETIC IN A DEPRESSE D STATE OF MIND. FURTHER, SHOWS CAUSE/SUMMON ISSUED IN THE N AME OF JAGADISH PRASAD BHANIRAMKA AS PARTNER OF THE ASSESSEE FIRM CAN NOT BE SAID TO BE VALID AS MR.JAGDISH PRASAD BHANIRAMKA RETIRED FROM THE FIRM LONG BACK IN THE Y EAR 1988. A.O. HAS PASSED ORDER U/S 158BC DATED 23.07 .2007 TO DETERMINE TOTAL UNDISCLOSED INCOME AT AN ASTRONOMICAL FIGURE OF RS.13,30,32,200 /- WHICH IS ARBITRARY, WITHOUT BASIS AND ON MISCONCEPTION. THE VALUE OF STOCK FOUND ON SEARCH AND ADDED AS UNDISCLOSED INCOME IS ERRONEOUS AND EXCESSIVE BECAUSE SUCH VALUATION WAS DONE ARBIT RARILY BY THE SEARCH PARTY. APART FROM THIS, THE LD. AO CONSIDERED THE PAYMENTS THROU GH RUKKA AS UNDISCLOSED CASH PURCHASES AND AGGREGATED THE TOTAL AMOUNTS OF PURCH ASES, SALES, PAYMENTS & RECEIPTS AS UNDISCLOSED INCOME, BASED ON THESTATMENT OF SRI J.P .BHANIRAMKA IN COURSE OF SEARCH PROCEEDING, IGNORING THE FACT THAT SRI J.P.BHANIRAM KA RETIRED FROM THE FIRM IN THE YEAR 1988 AS STATED HEREINABOVE. THE SEIZED RECORDS WERE MANUAL AND ALSO COM PUTERIZED FOR THE SAME PERIOD. TOTAL OF BOTH PURCHASES AND SALES HAVE BEEN CONSIDERED AS UNDISCLOSED INCOME, APART FROM OTHER INCONSISTENCIES. THE LD. AO HAS ALSO CONSIDER ED THE FIGURES FROM BOTH MANUAL AND COMPUTERIZED RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE INITIATING HIS ARGUMENTS, AT THE OUTSET SUBMITTED THAT THE ISSUES AS CONSIDERED BY THE LD. CIT(A) IN HIS ORDER ARE BRIEF AND HE DISMISSED THE APPEAL FOR WANT OF PROSECUTION, IN SO FAR AS, IT WAS BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW THAT THE PARTNER SHRI JAGD ISH PRASAD BHANIRAMKA PASSED AWAY ON 14 TH DECEMBER, 2010. HE BEING AN AGED PERSON, WAS NOT A BLE TO RESPOND TO THE NOTICE AS REQUIRED BY THE AO AS WELL AS THE LD. CIT (A). HE PRAYED THAT THE ISSUES IT(SS)A .NO.53/KOL/2011 SH RI MAHABIR TIMBER WORKS VS ACIT,CC-XXIII, KOLKATA, BLOCK PERIOD : 01.04.1996 TO 28.10.2002. 3 RAISED BY THE ASSESSEE APPELLANT AS OF NOW MAY BE C ONSIDERED IN RESTORATION TO THE FILE OF AO, IN SO FAR AS, DETERMINATION OF UNDISCLOSED I NCOME BROUGHT BY THE AO ARE NOT WORTHY OF ADDITION TIME AND AGAIN HAS BEEN NOTED BY IT AS UNDISCLOSED INCOME. A REASONABLE OPPORTUNITY BY THE AO BE AFFORDED TO THE ASSESSEE TO BRING ON RECORD HOW THE SAME CAN BE BROUGHT TO TAX TIME AND AGAIN, IN S O FAR AS, THE TOTAL UNDISCLOSED IN THE HANDS OF THE ASSESSEE FIRM HAS BEEN COMPUTED AT RS. 30.30 CRORES. 4. THE LD. DR HAD NO OBJECTION TO THE PRAYER OF THE LD. COUNSEL FOR THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL CONSIDERATION OF TH E FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUES TO THE FILE OF AO TO CONSIDER THE SUBMISSION WITH RESPECT TO BRINGING TO TAX THE UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE, IN SO FAR AS, THE BLOCK PERI OD 01.04.1996 TO 28.10.2002 WHICH PERIOD WHETHER COULD BE OVER AND ABOVE FOR CONSIDER ATION IN RESPONSE TO NON FILING OF THE RETURN IN PURSUANCE TO THE NOTICE U/S 158BC OF THE ACT THE AO THEREFORE WAS REQUIRED TO COMPUTE. HE IS DIRECTED TO PASS THE ASS ESSMENT ORDER AFRESH DENOVO IN ACCORDANCE WITH THE PROVISIONS OF INCOME TAX ACT. T HE DEATH CERTIFICATE OF SHRI J.P.BHANIRAMKA HAS BEEN PLACED ON RECORD. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.05.2013. SD/- SD/- [ .$$% &' , ] [ .., ,, , ] [GEORGE MATHAN ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (6 6 6 6) )) ) DATE: 20 .05.2013. R.G.(.P.S.) IT(SS)A .NO.53/KOL/2011 SH RI MAHABIR TIMBER WORKS VS ACIT,CC-XXIII, KOLKATA, BLOCK PERIOD : 01.04.1996 TO 28.10.2002. 4 8 3 1**; <;,=- COPY OF THE ORDER FORWARDED TO: 1. SHREE MAHABIR TIMBER WORKS, 64, MAHARSHI DEBENDRA R OAD, KOLKATA-700006. 2 A.C.I.T., CENTRAL CIRCLE-XXIII, KOLKATA 3 . CIT KOLKATA 4 . CIT(A)-CENTRAL-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 2; 1*/ TRUE COPY, 8'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES