Shri Dhansukhlal G.Shah, Vapi V. The Dy.CIT.,Cent.Circle-3, Surat

ITSSA 612/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9222 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 24-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Gross profit estimation; Business income; Income from undisclosed sources; Salary income; Loose papers; Document seized; Corroborative evidences; Documents seized
• Section: 143(3); 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER IT(SS)A NOS. 612, 613 & 614/AHD/2012 ASSESSMENT YEARS :2005-06, 2006-07 & 2010-11 SHRI DHANSUKHLAL G. SHAH, AJIT NAGAR, CHALA, VAPI DAMAN ROAD, VAPI V/S . THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, SURAT. PAN NO. A EQPS7115E (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI TUSHAR HEMANI, A.R. /BY RESPONDENT SHRI T. SANKAR, CIT D.R. /DATE OF HEARING 13.06.2013 /DATE OF PRONOUNCEMENT 31.07.2013 O R D E R PER : SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER ALL THREE APPEALS HAVE BEEN FILED BY THE ASSESSEE. FOR THE SAKE OF CONVENIENCE THESE APPEALS ARE CONSOLIDATED AND HERE BY DECIDED BY THIS COMMON ORDER. A. ITA NO. 612/AHD/2012 (A.Y. 05-06) 2. GROUND NO.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE AOS ACTION OF MAKING ADDITION OF RS.18,000/- AND RS.1,880/- WI THOUT REFERRING TO THE EXPLANATION OFFERED BY YOUR APPELLANT. IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 2 2(I). FACTS IN BRIEF AS EMERGED FROM THE CORRESPOND ING ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 153A OF IT ACT, DATED 30. 12.2011, WERE THAT A SEARCH U/S. 132 WAS CARRIED ON 16.07.2009 ON N.R. AGARWAL GROUP. THEREUPON THE SAID SEARCH HAD ALSO COVERED SHRI AJIT GROUP AND DH ANSUKH G SHAH GROUP OF CASES. AS FAR AS THIS ASSESSEE IS CONCERNED, IT WA S NOTED BY THE A.O. THAT THE ASSESSEE HAS DERIVED SALARY INCOME FROM M/S. AJIT B UILD STEEL PVT. LTD. AND M/S. SHREE AJIT PULP & PAPER LTD. THE ASSESSEE WAS ALSO HAVING BUSINESS INCOME AND INTEREST INCOME. DURING THE COURSE OF S EARCH CERTAIN LOOSE PAPERS WERE FOUND AT THE RESIDENCE OF THE ASSESSEE. ON TH OSE PAPERS, CERTAIN ENTRIES WERE MADE WHICH WERE INVESTIGATED DURING POST-SEARC H PROCEEDINGS. LOOSE PAPERS WERE MARKED AS NO. 49, 57 & 58 OF ANNEXURE A -1. THERE WAS A NOTING OF 1,990 - ASC AND 18,000 - LADIES FRIENDS. IN T HE ABSENCE OF ANY EXPLANATION THE SAME WAS TAXED IN THE HANDS OF THE ASSESSEE. 2(II). WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE DECISION WAS TAKEN AS FOLLOWS: 6.2 I HAVE CONSIDERED THE SUBMISSIONS FILED ON THE SEIZED PAPER BEFORE THE ASSESSING OFFICER IN WHICH THE EXPLANATI ON REGARDING RS.18,000/- IS MENTIONED AS LADIES CLUB CASH BELON GS TO SCHOOL. THERE IS NO EXPLANATION REGARDING PAYMENT OF RS.1,9 90/-. ON PERUSAL OF THE CONTENTS MENTIONED ON PAGE NO.49 OF ANNEXURE A-1 REPRODUCED BY THE ASSESSING OFFICER ON PAGE 2 OF TH E ASSESSMENT ORDER, IT IS FOUND THAT RS.18,000/- IS MENTIONED AG AINST LADIES FRIENDS. THIS SHOWS THAT CASH OF RS.18,000/- WAS GIVEN TO LADIES FRIENDS. THE APPELLANT HAS NOT FILED ANY CONFIRMAT ION OR DETAILS OF THE PAYMENT OF RS.18,000/- OR HAS ALSO NOT FILED ANY EV IDENCE WHICH IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 3 PROVE THAT RS.18,000/- BELONGED TO LADIES CLUB OR A NY SCHOOL. ANY EXPLANATION FILED WITHOUT ANY SUPPORTING EVIDENCE T O EXPLAIN THE SOURCE OF CASH ENTRY, CANNOT EXPLAIN THE NATURE AND SOURCE OF CASH. SIMILARLY, NO EXPLANATION IS FILED EITHER BEFORE TH E ASSESSING OFFICER OR BEFORE THE UNDERSIGNED REGARDING THE ADDITION OF RS.1,990/-. THEREFORE, THE ADDITION OF RS.19,990/- IS CONFIRMED . THIS GROUND OF APPEAL IS PARTLY ALLOWED. 2.(III). BEFORE US, THE MAIN CONTENTION OF THE LD. A.R. MR. TUSHAR HEMANI IS THAT MERELY ON THE BASIS OF SOME NOTINGS ON A LOOSE PAPE R THIS ADDITION WAS MADE. ALTHOUGH, THERE WAS NO OTHER CORROBORATIVE EVIDENCE OF UNDISCLOSED INCOME. IT HAS ALSO BEEN ARGUED THAT THE ASSESSEE HAD ACCEP TED UNACCOUNTED SALES ON WHICH 100% PROFIT WAS TAXED, THEREFORE, THE SAID AMOUNT SHOULD NOT BE HELD AS UNACCOUNTED SALES OF THE ASSESSEE. FROM TH E SIDE OF THE REVENUE, SHRI T. SANKAR APPEARED AND SUPPORTED THE ORDERS OF THE REVENUES AUTHORITIES. 2(IV). HAVING HEARD THE SUBMISSIONS OF BOTH THE SID ES; WE ARE OF THE CONSIDERED OPINION THAT IN A SITUATION WHEN AN INCR IMINATING DOCUMENT WAS RECOVERED FROM THE POSSESSION OF THE ASSESSEE, THEN THE ASSESSEE IS DUTY- BOUND TO EXPLAIN EACH AND EVERY ENTRY OF THAT DOCUM ENT TO THE SATISFACTION OF THE A.O. IN THE PRESENT CASE, THE IMPUGNED TWO ENT RIES WERE READ BY THE A.O. AS UNACCOUNTED INCOME OF THE ASSESSEE. ALTHOUGH, I T IS CONTESTED BEFORE US THAT THE ASSESSEE HAS FILED A WRITTEN SUBMISSION BU T ON CAREFUL PERUSAL, WE HAVE NOTED THAT THE ASSESSEE REMAINED CONSPICUOUSLY SILENT IN RESPECT OF THESE TWO NOTINGS FOUND RECORDED ON THE SEIZED DOCU MENTS. IT IS NOT CORRECT IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 4 ON THE PART OF THE LD. A.R. TO ARGUE THAT THE SAID TWO AMOUNTS WERE TREATED AS UNACCOUNTED SALES BY THE REVENUE DEPARTMENT. ON TH E CONTRARY, THE A.O. HAD SIMPLY HELD THAT THE UNACCOUNTED INCOME WAS REC ORDED. HENCE, THAT WAS TAXED IN THE HAND OF THE ASSESSEE. RESULTANTLY, WE HEREBY CONFIRM THE VIEW TAKEN BY THE REVENUE AUTHORITIES AND DISMISS THIS G ROUND OF THE ASSESSEE. 3. GROUND NO.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) ERRED IN UPHOLDING THE AOS ACTION OF MAKING ADDITION OF RS.61,962/- WITHOUT GIVING TELES COPING OF THE PROFIT ALREADY DECLARED FROM STONE BUSINESS. 4. GROUND NO.3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) ERRED IN UPHOLDING THE AOS ACTION IN MAKING ADDITION OF RS.61,962/- ON THE BASIS OF HIS SURMISE THAT PORTION OF LOAN GIVEN BY APPELLANT IS UNEXPLAINED. 4(I). ON THE AFOREMENTIONED SEIZED DOCUMENTS, THERE WAS A REFERENCE OF UNACCOUNTED SALES OF STONE BUSINESS. THE TOTAL OF THE SAID ENTRIES WAS RS.6,19,196/-. IT WAS NOTED BY THE A.O. THAT THE A SSESSEE HAS EARNED 10% PROFIT ON THE PROPRIETORSHIP BUSINESS ON SALE OF ST ONE. THE PROFIT OF THE PROPRIETORSHIP CONCERNED, NAMELY M/S. ASSOCIATE STO NE COMPANY WAS AS PER A.O., AT 10%. THEREFORE, AN AMOUNT OF RS.61,920/- WAS TAXED IN THE HANDS OF THE ASSESSEE. IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 5 4(II). WHEN THE MATTER WAS CARRIED BEFORE THE LD. C IT(A), THERE WAS A FINDING THAT THE ASSESSEE HAD DISCLOSED 10% GROSS PROFIT OF RS.61,902/- BUT THE A.O. WAS NOT IN AGREEMENT AND ESTIMATED THE G.P. AT 20%. WHEN IT WAS BROUGHT TO THE NOTICE OF LD. CIT(A), RELIEF WAS GRANTED IN THE FOLLOWING MANNER: 6. I HAVE CONSIDERED THE BASIS OF THE ADDITION MAD E BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND ALSO THE SUBMISSIONS FILED BY THE APPELLANT ALONGWITH THE COPY OF EXPLAN ATION FILED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEED INGS. ON GOING THROUGH THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSING OFFICER HAS ESTIMATED G.P. @ 20% ON UNACCOUNTED SALES OF RS .6,19,196/- WITHOUT MENTIONING ANY REASON OR ANY COMPARABLE CAS E. THE ASSESSING OFFICER HAS ALSO NOT CONSIDERED AND GIVEN ANY FINDING REGARDING G.P. DISCLOSED BY THE APPELLANT ON THE AC COUNTED TURN OVER. HE HAS ALSO NOT GIVEN ANY COMPARABLE CASE TO SUPPORT THE G.P. ESTIMATED BY HIM. IN VIEW OF THE ABOVE FACTS, THE ADDITION OF RS. 61, 920/- IS DELETED. 4(III). NOW BEFORE US, THE ASSESSEES ARGUMENT IS T HAT THE UNACCOUNTED INCOME EARNED FROM STONE BUSINESS AND LOAN ADVANCED HAVE FOUND PART OF SAME SET OF LOOSE PAPERS SEIZED, THEREFORE, THERE W AS A LINKAGE BETWEEN THE TWO. DUE TO THE REASON OF RECORDING ON THE SAME LO OSE PAPER, THE ASSESSEE MUST BE GRANTED BENEFIT OF TELESCOPING. THEREFORE, LD. A.R. HAS PLEADED THAT THE BENEFIT OF TELESCOPING SHOULD BE GRANTED TO THE ASSESSEE. FROM THE SIDE OF THE REVENUE, LD. CIT D.R. HAS SUPPORTED THE ACTI ON OF THE A.O. 4(IV). AS FAR AS FACTUAL ASPECT OF THIS ISSUE IS CO NCERNED, WE HAVE NOTED THAT THE ASSESSEE HAPPENED TO BE A PROPRIETOR OF M/S. AS SOCIATED STONE COMPANY. THAT BUSINESS WAS DETECTED IN CONSEQUENCE OF SEARCH . AS PER THE SEIZED IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 6 MATERIAL, UNACCOUNTED BUSINESS OF STONE BUSINESS WA S FOUND RECORDED. THE ASSESSEE HIMSELF HAD OFFERED 10% PROFIT OF THE IMPU GNED UNDISCLOSED BUSINESS. THE A.O. WAS OF THE OPINION THAT 20% PRO FIT WAS TO BE TAXED IN RESPECT OF THE UNACCOUNTED SALE OF STONE BUSINESS. AS FAR AS RELIEF BY LD. CIT(A) IS CONCERNED, WE ARE OF THE CONSIDERED OPINI ON THAT LD. CIT(A) HAS RIGHTLY REDUCED THE PROFIT FROM 20% TO 10%. RATHER , IN OUR OPINION, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE BECAUSE 10% PROFIT WAS OFFERED BY THE ASSESSEE HIMSELF IN RESPECT OF THE SAID UNDISCL OSED SALES. WE, THEREFORE, CONFIRM THE ACTION OF LD. CIT(A). NEXT, AS FAR AS THE TELESCOPING IS CONCERNED, THE SAME IS PERMISSIBLE ONLY IF THERE IS A LIVE NEX US BETWEEN THE ENTRIES. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS NOT RECORD ED THE STONE BUSINESS AND THEREFORE, THE UNACCOUNTED SALES WERE UNEARTHED. I T WAS THE DUTY OF THE ASSESSEE TO DEMONSTRATE THAT THE UNACCOUNTED PROFIT OF THE STONE BUSINESS HAD IN FACT BEEN ADVANCED AS A LOAN. AS LONG AS TH IS DIRECT NEXUS WAS NOT ESTABLISHED THEN IT IS NOT JUSTIFIABLE ON OUR PART TO GRANT THE BENEFIT OF TELESCOPING TO THIS ASSESSEE. IN THE RESULT, WE HE REBY HOLD THAT THE RELIEF GRANTED BY THE LD. CIT(A) WAS ADEQUATE. HENCE, NO INTERFERENCE IS REQUIRED. BOTH THE GROUNDS OF ASSESSEE ARE HEREBY DISMISSED. 5. GROUND NOS. 4 TO 7 ARE EITHER IN RESPECT OF CHAR GING OF INTEREST U/S.234B OR GENERAL IN NATURE. IN RESPECT OF INTEREST CHARG ED U/S.234B, THE ONLY SUBMISSION IS THAT THE ADJUSTMENT OF SEIZED CASH WA S NOT GRANTED AGAINST THE TAX LIABILITY. BEFORE US, THERE IS NO SPECIFIC DET AIL OF THE SEIZED CASH. WE ARE NOT SURE ABOUT THE QUANTUM OF SEIZED CASH BECAUSE T HE ASSESSEE HAS FAILED IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 7 TO SUBSTANTIATE THIS GROUND BY PLACING ON RECORD TH E EXACT INFORMATION. RATHER THE CHARGING OF INTEREST U/S.234B IS A MATTER OF CA LCULATION, HENCE, NO LEGAL QUESTION IS REQUIRED TO BE ANSWERED. WE HEREBY HOL D THAT ALL THESE GROUNDS BEING GENERAL IN NATURE, THEREFORE, NEED NOT TO BE ADJUDICATED UPON, HENCE, DISMISSED. 6. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. B. ITA NO. 613/AHD/2012(A.Y. 06-07) 7. FOR A.Y. 06-07, THE ONLY GROUND OF THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) ERRED IN UPHOLDING THE AOS ACTION IN MAKING ADDITION OF RS.2,00,000/- ON THE BASIS OF HIS SURMISE THAT PORTION OF LOAN GIVEN BY APPELLANT IS UNEXPLAINED. 7(I). AS PER THE ASSESSMENT ORDER PASSED U/S. 143(3 ) R.W.S. 153A DATED 30.12.2011, IT WAS NOTED BY THE A.O. THAT THE ASSES SEE HAD ADMITTED THAT ADVANCE OF RS.2,00,000/- WAS GIVEN. ON PAGE 57 OF THE SEIZED MATERIAL, THERE WAS A MENTION OF UNACCOUNTED LOAN GIVEN TO FRIEND O F RS.2,00,000/-. THE A.O. HAS, THEREFORE, TAXED THE SAME AS UNACCOUNTED INCOM E IN THE HANDS OF THE ASSESSEE. 7(II). WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE CONTENTION OF THE ASSESSEE WAS THAT AFOREMENTIONED UNDISCLOSED LOAN WAS OUT OF THE UNDISCLOSED PROFIT OF STONE BUSINESS. HOWEV ER, LD. CIT(A) WAS NOT IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 8 CONVINCED AND HELD THAT THE A.O. WAS JUSTIFIED IN M AKING ADDITION BY ASSIGNING FOLLOWING REASONS: 5.1 REGARDING THE ADDITION OF RS 2,00,000/- , IT I S UNDISPUTED FACT THAT THE UNDISCLOSED LOAN OF RS.2,00,000/- WAS GIVE N IN CASH TO THE FRIEND OF THE APPELLANT DURING THE ASSESSMENT YEAR 2006-07 AND THE ASSESSEE COULD NOT ESTABLISH ANY LINKAGE OF PROFIT EARNED FROM STONE BUSINESS AND THE DATE OF LOAN GIVEN. THE APPELLANT HAS CLAIMED TELESCOPING OF PROFIT ALREADY DECLARED FROM THE STO NE BUSINESS AND WITHOUT GIVING CREDIT OF RS.97,241/- OFFERED IN THE RETURN OF INCOME FILED U/S.153A OF THE L.T.ACT IN A.Y.2007-08. IT IS UNDISPUTED FACT THAT THE UNACCOUNTED LOAN OF RS.2,00,000/- WAS GIVEN IN A.Y.2006-07 WHEREAS THE APPELLANT CLAIMS TELESCOPING OF PROFIT DECLARED FROM THE STONE BUSINESS IN A.Y.2007-08. THE ONUS IS ON THE A PPELLANT TO SUBSTANTIATE THE CLAIM THAT THE UNACCOUNTED LOAN WA S GIVEN OUT OF THE PROFIT EARNED FROM UNACCOUNTED TRANSACTION THIS ONUS HAS NOT BEEN DISCHARGED BY THE APPELLANT EITHER DURING THE ASSESSMENT PROCEEDINGS OR AT THE APPELLATE STAGE. THE UNACCOU NTED LOAN OF RS.2,00,000/- WAS GIVEN TO THE FRIEND WHEREAS THE P ROFIT OFFERED IS ONLY TO THE EXTENT OF RS.1,02,759/-. THE CASE LAWS RELIED UPON BY THE APPELLANT ARE NET APPLICABLE TO THE FACTS OF TH E CASE BECAUSE THE APPELLANT HAS FAILED TO FILE ANY EVIDENCE OF ADVANC ING LOAN OUT OF UNACCOUNTED INCOME EARNED PARTICULARLY IN VIEW OF T HE FACT THAT THE LOAN WAS ALMOST DOUBLE THE AMOUNT OF UNACCOUNTED PR OFIT. THE ARGUMENTS OF THE APPELLANT WITHOUT PROPER EVIDENCE CANNOT BE ACCEPTED THEREFORE, IT IS HELD THAT THE ASSESSING O FFICER WAS JUSTIFIED IN MAKING THE ADDITION OF RS.2,00,000/ ON ACCOUNT O F UNACCOUNTED CASH LOAN GIVEN TO THE FRIEND OF THE APPELLANT. HE NCE, THE ADDITION OF RS 2,00,000/ IS CONFIRMED AND THE RELATED GROUND OF APPEAL IS DISMISSED. IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 9 7(III). NOW BEFORE US, THE MAIN PLANK OF THE ARGUME NT OF THE ASSESSEE IS THAT ONCE THE PROFIT WAS DISCLOSED AT RS.1,02,759/-, I.E . 10% GROSS PROFIT ON STONE BUSINESS; AND WAS TAXED IN THE HANDS OF THE ASSESSE E, THEREFORE, THE RESPECTIVE RELIEF BY THE ADJUSTMENT BETWEEN THESE T WO FIGURES OF LOAN AND PROFIT SHOULD BE GRANTED TO THE ASSESSEE. LD. A.R. HAS, THEREFORE, PLEADED THAT THE BALANCE AMOUNT OF RS.97,241/-, AS OFFERED BY THE ASSESSEE SHOULD NOT BE DISTURBED. THE ASSESSEE HAS ALSO PLEADED THAT B OTH THE FIGURES HAVE BEEN NOTED ON THE SAME LOOSE PAPERS. THEREFORE, THERE W AS A DIRECT LINKAGE BETWEEN THE TWO. 7(IV). WE HAVE ALREADY EXPRESSED OUR VIEWS THAT MER ELY RECORDING OF TWO FIGURES ON A LOOSE PAPER DO NOT IPSO FACTO ESTABLISHED THE NEXUS BETWEEN THE TWO. THIS IS A CASE WHEN A SEARCH WAS CONDUCTED. IN CONSEQUENCE THEREUPON THE UNACCOUNTED BUSINESS OF SALE OF STONE WAS DETECTED. ONLY AFTER THE SEARCH, THE LOAN ENTRIES HAVE ALSO BEEN F OUND RECORDED ON THE LOOSE PAPER. A DIRECT NEXUS HAS NOT BEEN ESTABLISHED BY THE ASSESSEE. IN THE ABSENCE OF ANY SUCH CORROBORATIVE DOCUMENTARY EVIDE NCE, IT IS NOT POSSIBLE TO HOLD THAT THERE WAS A DIRECT NEXUS OF ADVANCE OF LO AN OUT OF THE UNACCOUNTED STONE BUSINESS. WE, THEREFORE, OPINE THAT THE BENE FIT OF TELESCOPING, IN THIS SITUATION, IS NOT FEASIBLE, HENCE, SHOULD NOT BE GR ANTED. RESULTANTLY, THIS GROUND OF APPEAL, IS HEREBY, DISMISSED. 7(V). IN THE RESULT, ASSESSEES APPEAL IS DISMISSED . C. ITA NO. 614/AHD/2012 (A.Y. 10-11) 8. THE GROUNDS RAISED ARE INTER-CONNECTED AND REPRO DUCED BELOW: IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 10 1) THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, IN ASSESSING INCOME OF THE APPELLANT AT RS.8,60,123 /- AS AGAINST RS.5,57,364/- RETURNED BY THE APPELLANT U/S . 153A. 2) THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, IN MAKING ADDITION OF RS.1,02,759/- ON ACCOUNT OF A LLEGED LOW GP FROM STONE BUSINESS. 3) THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, IN MAKING ADDITION OF RS.2,00,000/- ON THE BASIS OF HIS SURMISE THAT LOAN GIVEN BY THE APPELLANT IS UNEXPLAINED. 4) THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, IN CHARGING EXCESS INTEREST OF RS.42,649/- U/S. 234 B OF THE INCOME TAX ACT, 1961. 5) WHILE CALCULATING INTEREST U/S. 234B OF THE I.TA X ACT, 1961, THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, IN COMPLETELY IGNORING THE DATE OF APPLICATION FILED B Y THE APPELLANT TOWARDS ADJUSTMENT OF CASH SEIZED AT THE TIME OF SEARCH ACTION TOWARDS THE TAX LIABILITY DUE AS PER RETURN OF INCOME FILED U/S.153A. 6) THE LEARNED ASSESSING OFFICER OUGHT TO HAVE ADJU STED SEIZED CASH TOWARDS TAX LIABILITY DUE AS PER RETURN OF INC OME IMMEDIATELY BY EXPEDITING THE PROPOSAL OF ADJUSTMEN T. 7) THE EXCESS INTEREST OF RS.42,649/- CHARGED U/S.2 34B OF THE INCOME TAX ACT, 1961, BEYOND THE DATE OF APPLICATIO N FOR ADJUSTMENT OF SEIZED CASH, IS UNWARRANTED AND SHOUL D BE DELETED. 8) THE LEARNED ASSESSING OFFICER HAS ERRED, IN LAW AND ON FACTS, INITIATING PENALTY PROCEEDINGS U/S. 271 OF T HE I.T. ACT. 8(I). THE FACTS IN BRIEF AS EMERGED FROM THE ASSESS MENT ORDER PASSED U/S. 143(3) R.W.S. 153A OF IT ACT FOR A.Y. 2010-11, DATE D 30.12.2011, WERE THAT IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 11 DURING THE COURSE OF SEARCH AN INVENTORY OF THE STO CK OF M/S. AJIT STEEL CENTER WAS MADE BY THE SEARCH PARTY OF THE REVENUE DEPARTM ENT. AS AGAINST THE VALUE OF THE STOCK AS PER THE BOOKS OF ACCOUNTS OF RS.13,54,503/-, EVALUATED THE STOCK FOUND AT THE TIME OF SEARCH, WAS AT RS. 9 ,80,238/-. THEREFORE, THERE WAS A SHORTAGE OF STOCK OF RS.3,74,265/-. ON ONE H AND, THE ASSESSEE HAS PLEADED THAT IT WAS NOT PRACTICALLY POSSIBLE TO PHY SICALLY WEIGH THE STOCK IN A SHORT TIME. ON THE OTHER HAND, IT WAS ALSO PLEADED THAT THE BENEFIT OF TELESCOPING AGAINST THE EXCESS CASH BE GRANTED TO T HE ASSESSEE. THE A.O. WAS NOT CONVINCED AND THE DIFFERENCE OF RS.3,74,265 /- WAS TAXED. 8(II). WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE CIT(A) HAS EXAMINED THE POSITION OF THE CLOSING STO CK AS PER THE STOCK REGISTER OF THE ASSESSEE, AS ALSO THE INVENTORY PREPARED BY THE SEARCH TEAM. THE MINOR DISCREPANCIES HAVE BEEN IGNORED BY THE LD. CI T(A), THUS PARTLY DELETED THE ADDITION. LD. CIT(A) HAS GIVEN RELIEF OF RS.99 ,265/-. THEREFORE, AN ADDITION OF RS.2,75,000/- WAS SUSTAINED. 8(III). NOW THE ASSESSEE IS FURTHER IN APPEAL. THE ARGUMENT OF THE ASSESSEE IS THAT THE SEARCH TEAM HAD NO KNOWLEDGE OF THE BUS INESS OF STEEL OF THE ASSESSEE. THE SEARCH PARTY HAD THEREFORE MEASURED APPROXIMATE WEIGHT. THE INVENTORY WAS NOT PRECISELY MADE. SINCE, THERE WAS NO EVIDENCE OF UNACCOUNTED SALES, THEREFORE, MERELY ON THE BASIS O F SHORTAGE OF STOCK, NO ADDITION SHOULD HAVE BEEN MADE. ALTERNATIVELY, LD. A.R. HAS ALSO PLEADED THAT THE EXCESS CASH WAS FOUND FROM THE ASSESSEE. THERE FORE, THE BENEFIT OF TELESCOPING MUST BE GRANTED. LD. SR. D.R. HAS OPPO SED THE BENEFIT OF IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 12 TELESCOPING AND PLEADED THAT THE INCRIMINATING MATE RIAL ITSELF HAS ESTABLISHED THE ELEMENT OF UNACCOUNTED SALES. 8(IV). HAVING HEARD THE SUBMISSIONS OF BOTH SIDES, WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A CASE WHERE THE ASSESSEE IN THE NORMAL COURSE OF BUSINESS HAS RECORDED THE STOCK OF STEEL BUSINESS, WHICH WAS FOUND SHORT WHEN THE INVENTORY WAS MADE BY THE REVENUE DEPARTME NT. ON THE CONTRARY, THE FACTS OF THE CASE HAVE REVEALED THAT THE SEARCH PARTY HAD DETECTED THE UNDISCLOSED STEEL BUSINESS OF THE ASSESSEE. SOME O F THE INCRIMINATING DOCUMENTS HAVE ALSO FOUND THROUGH WHICH UNACCOUNTED SALES OF PROPRIETARY BUSINESS IN THE NAME OF M/S. AJIT STEEL CENTER HAV E ALSO BEEN UNEARTHED. BE THAT AS IT WAS, AN OVER ALL CONDUCT OF THE ASSESSEE HAS TO BE EXAMINED. RATHER, WE HAVE NOTED THAT THE REVENUE DEPARTMENT W AS NOT ONLY CONSIDERATE BUT TO SOME EXTENT ACCURATE IN PREPARIN G THE INVENTORY OF THE STOCK. THIS FACT WAS CORRECTLY APPRECIATED BY THE LD. CIT(A). DUE TO THAT REASON, HE HAS GRANTED RELIEF IN RESPECT OF MINOR D IFFERENCES. IN RESPECT OF A MAJOR DIFFERENCE PERTAINING TO TMT BARS, IT WAS NOT ED THAT IN THE STOCK REGISTER IT WAS MENTIONED 38,640.200 KG WHEREAS AS PER THE I NVENTORY PREPARED BY THE SEARCH TEAM THE WEIGHT WAS 29,649 KG. HENCE, THERE WAS A DIFFERENCE OF 9000 KGS. OF TMT BARS. FURTHER, IT IS ALSO WORTH T O MENTION THAT IF THERE WAS A SHORTAGE OF STOCK THEN ALSO THE ASSESSEE WAS REQUIR ED TO FURNISH THE RE- CANCELLATION. IT WAS A DUTY OF THE ASSESSEE TO EXP LAIN THE REASON OF THE SHORTAGE OF STOCK. IN THE ABSENCE OF ANY SUCH EXPL ANATION, IT IS NOT JUSTIFIED TO ACCEPT THIS ARGUMENT THAT SHORTAGE OF STOCK MUST NO T BE MADE THE BASIS OF IT(SS)A NOS.612, 613 & 614/AHD/2012 A.Y.05-06,06-07 &10-11 PAGE 13 ADDITION. THIS ARGUMENT IS, THEREFORE, HEREBY REJE CTED. THE ASSESSEE HAS ALSO PLEADED THAT THE EXCESS CASH FOUND SHOULD BE T ELESCOPED AGAINST THIS ADDITION. THERE WAS NO SUCH CLAIM AT THE TIME OF S EARCH. THE ASSESSEE HAS NOT INFORMED THE SEARCH PARTY THAT THE CASH FOUND F ROM THE POSSESSION OF THE ASSESSEE WAS THE UNACCOUNTED CASH OF THE SAID CONCE RN. THE UNRECORDED ACCOUNTS HAVE ALSO NOT SUGGESTED THAT THERE WAS ANY NEXUS BETWEEN THE TWO. WE, THEREFORE, HOLD THAT THE ABOVE RELIEF GRANTED B Y THE LD. CIT(A) WAS ADEQUATE. HENCE, THE SAME IS HEREBY CONFIRMED. TH IS APPEAL IS DISMISSED. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE HEREBY DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31.07.2013 SD/- SD/- (ANIL CHATURVEDI) ( MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;