Shri Abhisek Singh, Ranchi V. DCIT CENTRAL CIRCLE-3, Ranchi

ITSSA 68/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9644 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: INDERJIT SINGH CIT LD
• Assessee Lawyers: DEVESH PODDAR S LD ARS
• Keywords: Unexplained expenditure; Document seized; Principle of natural justice; Opportunity of cross examination; Additional evidence
• Section: 131

Judgement Text

1 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI (BEFORE SHRI S. S. GODARA , J.M. & DR.A.L.SAINI, A.M.) IT (SS) NO. 68 /RAN/16 : ASSTT. YEAR : 20 0 9 10 IT (SS) NO. 69/RAN/16 : ASSTT. YEAR : 20 10 11 S RI ABHISHEK SINGH ALIAS ABHISHEK RAJPUT PAN: BHEPS9352P VS D.C.I.T, C.C 3, RANCHI (APPELLANT) (RESPONDENT) APPELLANT /ASSESSEE BY : SHRI DEVESH PODDAR ADVOCATES, LD.ARS RESPONDENT /REVENUE BY : SHRI INDERJIT SINGH, CIT, LD. DR DATE OF HEARING : 1 0 01 2019 DATE OF PRONOUNCEMENT: 05 0 4 2019 ORDER PER BENCH : THE CAPTIONED T WO APPEAL S FILED BY THE ASSES S EE, ARE DIRECTED AGAINST THE SEPARATE ORDER S DATED 19 08 2016 AND 07 09 2016 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), 3, PATNA , WHICH IN TURN ARISE OUT OF SEPARATE ASSESSMENT ORDER S PASSED BY THE ASSESSING OFFICER U/S. 153A/143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) ALL DATED 2 7 12 2011 . 2. SINCE THESE TWO APPEALS PERTAIN TO THE SAME ASSESSEE, D IFFERENT ASSESSMENT YEARS , COMMON AND IDENTICAL ISSUES ARE INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 3. FIRST, WE SHALL TAKE UP THE ASSESSEES APPE AL IT (SS) NO. 68/RAN/2016 FOR THE A.Y 200 9 10 . . IT(SS) NO. 68/RAN/2016 FOR THE A.Y 2009 10 4. GROUNDS OF APPEAL RAISED BY THE ASSESSE IN IT(SS) NO. 68/RAN/2016 FOR THE A.Y 2009 10 ARE AS FOLLOWS : 1. FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 55,319/ MADE BY LD. A. O . AS UNEXPLAINED EXPENDITURE FOR THE PURCHASE OF FLAT AT PATNA. THE APPELLANT PAID TOTAL CONSIDERATION OF RS. 8,20,000/ (INCLUDING STAMP DUTY). AS SUCH, ADDITION OF STAMP CHARGES IS ILLEGAL AND UNJUSTIFIED. 2 . FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 1,84,000/ MADE FOR ALLEGED UNEXPLAINED DEPOSIT IN THE HDFC BANK ACCOUNT. ALL THE DEPOSITS STANDS EXPLAINED AND ARE COVERED BY THE INCOME OF THE APPELLANT ITSELF. THE ADDITION MADE THEREFORE IS UNJUSTIFIED AND ILLEGAL. 3. FOR THAT LD. A. O . MADE ADDITION OF RS.39,095/ AS UNDISCLOSED INCOME ON THE GROUND THAT THERE WAS CASH SHORTAGE WHILE MAKING A DEPOSIT IN AXIS BANK. LD. A. O . FAILED TO APPRECIATE THE FACTS PROPERLY AND BY REFERRIN G TO INCORRECT FIGURES MADE AN ADDITION. 4. FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN CONFIRMING AN ADDITION OF RS.8,50, 000/ AS UNDISCLOSED INCOME. NO EVIDENCE OR DOCUMENT WAS FOUND FROM THE APPELLANT , TO SUGGEST THAT HE RECEIVED RS.8,50, 000/ FROM M/ S IVRCL INFRASTRUCTURE AND PROJECT LTD. 5. FOR THAT THE ADDITION MADE ON THE GROUND THAT PRINTOUT O F THE HARD DISK SEIZED FROM M/S IVRCL INFRASTRUCTURE AND PROJECT LTD. REVEALED PAYMENT OF RS.5, 00,000/ AND R S. 3.5 LAKH TO ONE SRI ABHISHEK ON BEHALF OF L OCAL 'GUNDAS' AS PROTECTION MONEY AGAINST THREATENING CALLS. THERE WAS NO REFERENCE TO THE APPELLANT AND THERE IS NO EVIDENCE THAT ANY AMOUNT WAS PAID TO THE APPELLANT WHICH COULD HAVE BEEN CONSIDERED AS HIS INCOME. AS IT APPEARS, THE AMOUNT WAS PAID TO AN EMPLOYEE OF THE APPELLANT LOCALLY MAY BE AT THEIR PLACE OF OFFICE FOR PAYMENT OF LOCAL G UNDAS WHICH CANNOT BE CONSIDERED AS INCOME OF THE PERSON TO WHOM THIS AMOUNT WAS PAID. 3 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH THE ADDITION MADE IN THE HANDS OF THE APPELLANT WAS, THEREFORE, ILLEGAL, UNJUSTI FIED AND ARBITRARY. 6. FOR THAT THE INTEREST SHOULD HAVE BEEN CHARGED ON THE RETURNED INCOME NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. 7. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 5 . THE GROUND NO. 1 RAISED BY THE ASSESSE RELATES TO CONFIRMATION OF ADDITION OF RS. 55,319/ MADE BY THE AO AS UNEXPLAINED EXPENDITURE FOR THE PURCHASE OF FLAT AT PATNA. 6 . BRIEF FACTS QUA THE ISSUE ARE THAT ON PERUSAL OF THE BALANCE SHEET IT WAS FOU ND BY AO THAT THE ASSESSE HAS MADE INVESTMENT IN PURCHASE OF FLAT AT PATNA AT RS. 8,20,000/ WHICH INCLUDE STAMP DUTY/STAMP CHARGES AT RS. 70,000/ . BUT ON PERUSAL OF THE REGISTERED SALE DEED IT WAS FOUND THAT THE STAMP CHARGES WERE AT RS. 1,25,319/ . TH EREFORE, AO NOTED THAT THE ASSESSEE HAS NOT DISCLOSED THE BALANCE AMOUNT I.E RS. 55 ,319/ (RS. 1,25,319 RS. 70,000/ ) IN THE INCOME TAX RETURN AS INVESTMENT. 7 . ON APPEAL BY THE ASSESSE BEFORE THE LD. CIT(A), WE NOTE THAT THE ASSESSE E HAS NOT RAISED TH IS GROUND BEFORE HIM. THIS GROUND DOES NOT EMERGE FROM THE IMPUGNED ORDER OF THE LD. CIT(A). HENCE, WE DO NOT ADJUDICATE THIS GROUND AND DISMISS GROUND NO. 1 AS RAISED BY THE ASSESSE. 8 . GROUND NO. 2 RAISED BY THE ASSESSE RELATES TO ADDITION OF RS. 1,84, 000/ MADE BY AO FOR ALLEGED UNEXPLAINED DEPOSIT IN THE HDFC BANK ACCOUNT. 4 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 9 . BRIEF FACTS QUA THE ISSUE ARE THAT ON PERUSAL OF THE BANK STATEMENT IN RESPECT OF THE BANK ACCOUNT NO. 01501600000585 MA IN TAINED WITH HDFC BANK, RANCHI, IT WAS FOUND BY AO THAT THERE ARE FOLLOWING DEPOSITS: DATE AMOUNT (IN RS.) 01 12 2008 50,000 18 12 2008 45,000 03 02 2009 40,000 12 02 2009 4,000 02 03 2009 45,000 TOTAL 1,84,000 10 THE ASSESSE WAS REQUIRED TO FURNISH THE SOURCE OF ABOVE CASH DEPOSITS. IN COMPLIANCE TO THE SAME THE ASSESSE COULD NOT FURNISH ANY EXPLANATION REGARDING SOURCE OF ABOVE DEPOSITS. NO DOCUMENTARY EVIDENCES WERE PRODUCED TO PROVE THE AVAILABILITY OF FUNDS WITH THE ASSESSE E TO DEPOSIT THE ABOVE AMOUNTS. IN VIEW OF THIS THE ABOVE DEPOSITS REMA INED UNEXPLAINED AND THEREFOR E A SUM OF RS. 1,84,000/ WAS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSE ON ACCOUNT OF UNDISCLOSED INCOME. 11 . ON APPEAL BY THE ASSESSE BEFORE THE LD. CIT(A), WE NOTE THAT AT PAGE 4 OF THE ORDER OF THE LD. CIT(A), THE AS SESSE HIMSELF ADMITTED THAT HE IS NOT MAKING ANY DISPUTE OF ADDITION OF RS.1,84,000/ MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK ACCOUNT. SINCE THE ASSESSE HIMSELF ADMITTED BEFORE THE LD. CIT(A) ABOUT THE UNDISCLOSED INCOME OF RS. 1,84,000/ DEPOSITED IN THE BANK ACCOUNT. BEFORE US , NOT ANY ADDITIONAL EVIDENCE HAS BEEN FILED. THEREFORE, WE CONFIRM THE IMPUGNED ADDITION OF RS. 1,84,000/ MADE BY THE AO. GROUND NO. 2 RAISED BY THE ASSESSE IS DISALLOWED . 1 2 . GROUND NO. 3 RAISED BY THE ASSESSE RELATES TO ADDITION OF RS.39,095/ MADE ON ACCOUNT OF UNDISCLOSED INCOME. 5 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 1 3 . BRIEF FACTS QUA THE ISSUE ARE THAT ON PERUSAL OF THE CASH BOOK FILED BY THE ASSESSE, IT WAS FOUND THAT AS ON 01 11 2008 THERE WAS OPENING BALANCE OF RS. 49,555/ AND RECEIPT OF AMOUN T OF RS. 13,350/ AS LOAN FROM M/S. RVPL AND RECEIPT OF RS. 18,000/ FROM AXIS BANK, TOTALING TO RS.80,905/ . WHEREAS THE ASSESSE HAS DEPOSITED A SUM OF RS.1,20,000/ IN THE AXIS BANK, WHICH MEANS CASH DEFICIT OF RS.39,095/ IS BEING TREATED AS UNDISCLOSED INCOME OF THE ASSESSE AND BEING ADDED TO THE TOTAL INCOME OF THE ASSESSE. 1 4 . ON APPEAL BY THE ASSESSE BEFORE THE LD. CIT(A), WE NOTE THAT THE ASSESSE E HAS NOT RAISED THIS GROUND BEFORE HIM. THEREFORE, THIS GROUND DOES NOT EMERGE FROM THE IMPUGNED ORDE R OF THE LD. CIT(A) . THEREFORE, WE ARE INCLINED TO DISMISS GROUND NO. 3 RAISED BY THE ASSESSEE. 1 5 . GROUND NOS. 4 & 5 RAISED BY THE ASSESSE RELATES TO ADDITION OF RS. 8,50,000/ , MADE BY THE AO ON THE GROUND THAT PRINT OUT OF HARD DISC WAS SEIZED BY M/S. IVRCL INFRASTRUCTURE & PROJECTS LTD REVEALED THAT PAYMENT OF RS. 5 LAKH & RS. 3.5 LAKH MADE TO ONE, SHREE ABHISHEK ON BEHALF OF LOCAL GOONDAS AS A PROTECTION MONEY AGAINST THREATENING CALLS. 1 6 . BRIEF FACTS QUA THE ISSUE ARE THAT IN THE ASSESSMENT ORDER THE AO HAS NOTED THAT A COPY OF PRINT OUT OF HARD DISC FROM THE OFFICE OF IVRCL WHICH WAS SEIZED DURING SEARCH, REVEALED PAYMENT OF RS. 5 LAKH & RS. 3.5 LAKH ON DIFFERENT DATES TO THE APPELLANT. IN THE BOOKS OF ACCOUNT, THE ASSESSE E HAS NOT DISCLOSED THES E RECEIPTS. THE ASSESSE WAS REQUIRED TO EXPLAIN THE SAME AT THE TIME OF ASSESSMENT PROCEEDING. AFTER CONSIDERING THE REPLY OF THE ASSESSE, THE AO NOTED THAT THE CONTENTION OF THE ASSESSE E WAS NOT ACCEPTABLE BECAUSE THERE WAS CLEAR CUT MENTION IN THE PRINT OUT OF HARD DISC AMOUNTING TO RS. 5 LAKHS AND RS. 3.5 LAKHS AGAINST HIS NAME. THE AO ALSO NOTED THAT 6 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH THE AMOUNT MENTIONED AGAINST OTHER PERSONS IN THE PRINT OUT HAD ALREADY BEEN AUTHENTICATED. DURING RECORDING OF STATEMENT U/S. 131 OF SHREE GS RAJU SEN IOR ACCOUNTANT OF IVRCL INFRASTRUCTURES & PROJECTS LTD ON 07 01 2010 , I T WAS STATED BY HIM REGARDING THE ENTRIES MADE IN ROW 12 AND 16 AS UNDER: 'THESE AMOUNTS. ARE MADE TO SHREE ABHISHEK ON BEHALF OF LOCAL GOONDAS AS A PROTECTION MONEY AGAINST THREATEN ING CALLS' IN VIEW OF THE ABOVE, THE RECEIPT OF RS. 51AKHS AND RS. 3.5LAKHS IS THE HANDS OF SHREE ABHISHEK SINGH HAS BEEN SUBSTANTIATED THEREFORE, CONSIDERING THE FACTS OF THE CASE IT IS CLEAR THAT THE ASSESSEE HAS RECEIVED RS. 8.5LAKHS WHICH HAS NOT BEE N DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE.' 17. ON APPEAL, LD. CIT(A) CONFIRMED THE ADDITION MADE BY AO. 1 8 . DURING THE APPELLATE PROCEEDINGS, THE ASSESSE SUBMITTED BEFORE THE LD. CIT(A) THAT AT THE ASSESSMENT STAGE THE ASSESSE E REQUE STED THE AO TO CROSS EXAMINE SHRI D.K SRIVASTAVA AND OTHERS, WHOSE STATEMENTS WERE HEAVILY RELIED UPON BY THE AO . BUT THE AO KEPT SILENCE AND DID NOT GIVE AN OPPORTUNITY OF CROSS EXAMINATION. THE ASSESSE ALSO SUBMITTED THAT THE AO DID NOT INVESTIGATE T HE MATTER WITH IVRCL NOR COULD THROW ANY LIGHT OF ANY CONCRETE OR CORROBORATIVE EVIDENCE TO SHOW THAT IVRCL HAS RECEIVED ANY BENEFIT FROM THE ASSESSE E . HOWEVER, THE AO HAVING GONE THROUGH THE STATEMENT OF SHRI SHRI D.K SRIVASTAVA , AGM O F M/S. IVRCL INF RASTRUCTURES & PROJECTS LTD AND OTHER MATERIAL ON RECORD MADE THE IMPUGNED ADDITION , WHICH IS NOT JUSTIFIED. HOWEVER, LD. CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY AO. 19. AGGRIEVED BY THE ORDER OF AO, THE ASSESSE IS IN APPEAL BEFORE US. 7 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 20 . THE LD. COUNSEL FOR THE ASSESSE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW. WHEREAS THE LD. DR FOR THE REVENUE DEFENDED THE ORDER OF THE AO. 21 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE NOTE THAT THE AT THE ASSESSMENT STAGE THE ASSESSE E HAD REQUESTED THE AO TO CROSS EXAMINE SHRI D.K. SRIVASTAVA AND OTHER PERSONS WHOSE STATEMENTS WERE HEAVILY RELIED UPON BY THE AO. BUT THE AO DID NOT GIVE ANY OPPORTUNITY TO THE ASSESSE E FOR CROSS EXAMINATION OF THE S TATEMENTS OF THESE PERSONS. WE NOTE THAT NOT ALLOWING THE ASSESSEE TO CROSS EXAMINE THE STATEMENTS OF THE SE PERSONS, WHICH HAVE BEEN RELIED UPON BY THE AO , LEADS TO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE . THUS, AO ERRED IN NOT GIVING OPPORTUNITY OF CROSS EXAMINATION. FOR THAT, WE RELY ON THE J UDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES 281 ITR 214 (SC), WHEREIN IT WAS HELD THAT NOT ALLOWING THE ASSESSE TO CROSS EXAMINE THE WITNESS BY THE ADJUDICATING AUTHORITY, THOUGH THE STATEMENT OF THOSE WITNESSES WERE MADE, THE BASIS OF THE IMPUGNED ORDER, IS A SERIOUS FLAW OF LAW WHICH MAKES THE ORDER NULLITY. WE NOTE THAT TO MAKE THE ASSESSMENT ON THE BASIS OF STATEMENT OF SHRI D.K. SRIVAST AVA THE AO OUGHT TO HAVE GIVEN PROPER OPPORTUNITY TO EXAMINE/VERIFY D.K. SRIVASTAVA . WE NOTE THAT THE AO DID NOT INVESTIGATE THE MATTER WITH IVRCL NOR COULD THROW ANY LIGHT OF ANY CONCRETE OR CORROBORATIVE EVIDENCE TO SHOW THAT IVRCL HAS RECEIVED ANY BEN EFIT FROM THE ASSESSE E . WE ALSO NOTE THAT THE IMPUGNED AMOUNT WAS GIVEN TO SOME ABHISHEK AS EXPLAINED ABOUT IN ROW 12 & 16 FROM PRINTED PAPER IMPOUNDED FROM THE HARD DISC OF IVRCL. WE NOTE THAT THE STATEMENT OF G.S RAJ P U T OF M/S. IVRCL THAT AMOUNT WAS NO T PAID TO SOME ABHISHEK RATHER IT WAS GIVEN TO LOCAL GOONDA AS PROTECTION MONEY BY IVRCL AGAINST THREATENING CALL. THEREFORE, WE NOTE THAT THE IMPUGNED ADDITION OF RS. 8,50,000/ HAS NOT BEEN SUPPORTED BY ANY CORROBORATIVE EVIDENCE. HENCE, IT NEEDS TO B E DELETED. ACCORDINGLY, WE DELETE THE 8 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH IMPUGNED ADDITION OF RS. 8,50,000/ MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). GROUND NOS. 4 & 5 RAISED BY THE ASSESSSEE ARE ALLOWED. 2 2 . GROUND NO. 6 RAISED BY THE ASSESSE RELATES TO CHARGING OF INTEREST U/S. 234A/B/C OF THE ACT . 23 . WE DIRECT THE AO TO CHARGE THE INTEREST U/S. 234 A/B/C ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME ( VIDE JURISDICTIONAL JHARKHAND HIGH COURT IN THE CASE OF AJAY PRAKASH VERMA, TA NO. 38 OF 2010 (2012) (1) TM 140 ) . 2 4 . THE APPEAL NO. IT (SS) 68/RAN/2016 FOR THE A.Y 2009 10 IS PARTLY ALLOWED , AS PER DISCUSSION MADE (SUPRA) . 25 . NOW, WE TAKE UP THE ASSESSEES APPEAL IN IT(SS) NO. 69/RAN/2016 FOR THE A.Y 2010 11 . 2 6 . GROUNDS OF APPEAL RAISED BY THE ASSESSE ARE AS FOLLOWS: 1. FOR THAT THE ADDITION OF RS.15,000/ MADE BY LD. A.O. FOR PURCHASE OF MOBILE PHONE BY THE APPELLANT ON THE BASIS OF. DOCUMENT SEIZED AT PATNA WHERE PARENTS OF THE APPELLANT HAVE BEEN RESIDING. THE COPY OF THE DOCUMENT WAS NEVER SHOWN TO THE AP PELLANT AND WAS NEVER ENQUIRED UPON ALTHOUGH OTHER PAGES WERE ENQUIRED BY LD. A.O. THE ADDITION MADE IS UNJUSTIFIED, ARBITRARY AND ILLEGAL. 2. FOR THAT THE ADDITION OF RS.36,915/ MADE BY LD. A. O . IS UNJUSTIFIED AND ILLEGAL. THE ADDITION WAS MADE ON THE GROUND THAT SOME BAJAJ HOME APPLIANCES WERE PURCHASES DOCUMENTS OF WHICH WERE FOUND AT THE TIME OF SEARCH. MERELY BECAUSE SOME APPLIANCES WERE PURCHASED OR MOBILE PHONES WERE PURCHASED, THE SAME CANNOT BE CONSIDERED AS INCOME OF THE APPELLANT. APPELLANT H AS NOT BEEN RESIDING AT THE PLACE OF SEARCH. THE ESTIMATE OF INCOME ON THE GROUND OF EXPENDITURE INCURRED IS ILLEGAL AND UNJUSTIFIED. 9 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 3. FOR THAT THE ESTIMATE OF DEEMED RENT FROM A FLAT AT PATNA WHICH WAS NOT FINISHED IN ITS TOTALITY AND WAS NOT FURNISHED AT ALL IT COULD NOT HAVE BEEN USED FOR THE PURPOSES OF RESIDENCE. THE ADDITION MADE BY LD. A.O. FOR A.Y. 2009 10 WAS DELETED. LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF DEEMED RENT FOR THE YEAR UNDER CONSIDERATION. 4. FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN MAKING ADDITION OF R S .1.35 CRORES AS UNDISCLOSED INCOME OF THE APPELLANT. ADDITION OF R S. 50 LAKH WAS MADE BY LD. A.O. WHICH WAS ENHANCED TO RS.1.35 CRORES. LD. A.O. MADE ADDITION ON THE GROUND THAT AS PER M/S IVRCL INFRASTRUCTURE AND PROJECT LTD. SRI ABHISHEK SINGH WAS PAID INITIALLY RS.50 LAKHS THROUGH CHEQUE AGAINST THE WORK ORDER AS MOBILIZATION AMOUNT, PAYMENT WAS MADE TO M/S RAJPUT VENTURES FOR THE SUB CONTRACT UNDERTAKEN BY THEM FROM THIS COMPANY. APPELLANT HAS NOTHING TO DO WITH THE PAYMENT MADE TO THE COMPANY. THERE WAS NO EVIDENCE TO SUGGEST THAT ANY PAYMENT WAS MADE BY M/S IVRCL INFRASTRUCTURE LTD. WHICH CAN BE TREATED AS INCOME OF THE APPELLANT. 5. FOR THAT LD. CIT ( A) WAS NOT JUSTIFIED FOR ENHANCING THE ADDITION MADE TO RS.1 .35 CRORES ON THE GROUND THAT AS PER CIRCUMSTANTIAL EVIDENCE AND STATEMENT OF SRI D.K. SRIVASTAVA LEADING TO THE CONCLUSION THAT RS.1.35 CRORES WAS RECEIVED BY THE APPELLANT THROUGH UNEXPLAINED EXPENSES FROM M/S RAJPUT VENTURES PVT. LTD. NO PAYMENT WAS MA DE TO APPELLANT BY M/S RAJPUT VENTURES PVT. LTD. OR M/S IVRCL INFRASTRUCTURE LTD. 6. FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN MAKING ENHANCEMENT OF UNDISCLOSED INCOME. LD. CIT(A) WAS FURTHER UNJUSTIFIED EVEN FOR CONFIRMING THE ADDITION MADE BY LD. A.O. WH ICH WAS WITHOUT ANY EVIDENCE/DOCUMENT AND BASIS. THE ADDITION MADE BY LD. A.O. AS WAS ENHANCED BY LD. C I T(A) WAS UNJUSTIFIED, ILLEGAL AND FIT TO BE DELETED. 7. FOR THAT THE INTEREST SHOULD HAVE BEEN CHARGED ON THE RETURNED INCOME NOT ON THE ASSESSED INCOM E FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. 8. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 10 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 2 7 . GROUND NO. 1 RAISED BY THE ASSESSE RELATES TO ADDITION OF RS. 15,000/ MADE BY THE AO FOR PURCHASE OF MOBILE PHONE. 2 8 . WE NOTE THAT THIS GROUND DOES NOT EMERGE FROM THE IMPUGNED ORDER OF THE LD. CIT(A). MOREOVER, THE ASSESSE E DID NOT PRESS THIS GROUND. THEREFORE, WE DISMISS GROUND NO. 1 RAISED BY THE ASSESSE E . 29. GROUND NO. 2 RAISED BY THE ASSESSE RELATES TO AD DITION OF RS. 36,915/ MADE BY THE AO. 30. WE NOTE THAT THIS GROUND DOES NOT EMERGE FROM THE IMPUGNED ORDER OF THE LD. CIT(A). MOREOVER, THE ASSESSEE DID NOT PRESS THIS GROUND. THEREFORE, WE DISMISS GROUND NO. 2 RAISED BY THE ASSESSEE. 3 1 . GROUND NO. 3 RAISED BY THE ASSESSE RELATES TO ADDITION OF DEEMED RENT. 3 2 . AT THE OUTSET ITSELF, WE NOTE THAT THIS GROUND DOES NOT EMERGE FROM THE IMPUGNED ORDER OF THE LD. CIT(A). HENCE, WE DISMISS GROUND NO. 3 RAISED BY THE ASSESSEE . 33 . GROUND NOS. 4 , 5 & 6 RE LATE TO ADDITION OF RS. 50 LAKH , WHICH WAS ENHANCED TO RS.1.35 CRORES . 3 4 . BRIEF FACTS QUA THE ISSUE ARE THAT O N PERUSAL OF BALANCE SHEET OF THE ASSESSEE, IT WAS FOUND THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEEE WAS HAVING TWO FLATS I.E ONE F LAT AT PATNA VALUED AT RS. 8,20,000/ , & ONE FLAT AT RANCHI VALUED AT RS. 8,65,413/ . IN THE RETURN OF INCOME THE ASSESSEE HAS NOT DISCLOSED ANY RENTAL INCOME. AS PER PROVISIONS OF SECTION 23(4) OF THE I.T.AC T ,1961, WHEN A PERSON HAS OCCUPIED MORE THAN O NE HOUSE FOR HIS OWN RESIDENTIAL PURPOSES, ONLY ONE HOUSE( ACCORDING TO 11 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH HIS CHOICE) IS TREATED AS SELF OCCUPIED AND ALL THE OTHER HOUSES WILL BE' DEEMED TO BE LET OUT'. IN THE CASE OF 'DEEMED TO BE LET OUT' PROPERTIES, THE TAXABLE INCOME WILL BE CALCUL ATED IN THE MANNER PROVIDED IN SECTION 23(1) I.E. THE ANNUAL VALUE OF THE PROPERTY SHALL BE DEEMED TO BE THE SUM FOR WHICH THE PROPERTY M I GHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR. SINCE, THE ASSESSEE HAS NOT FURNISHED ANY RENTAL INCOME FROM T HE HOUSE PROPERTIES IN HIS POSSESSION, IT IS PRESUMED THAT THE HOUSE PROPERTY VALUED AT RS. 8,65,413/ WAS SELF OCCUPIED & THE OTHER PROPERTY SITUATED AT PATNA, VALUED AT RS.8,20, 000/ WAS DEEMED TO BE LET OUT. ACCORDINGLY ANNUAL VALUE OF THE PROPERTY I S BEING TAKEN AT RS.6,000/ PER MONTH & ANNUAL RENTAL VALUE COMES TO RS.72,000/ . AFTER GIVING CREDIT OF STANDARD DEDUCTION FOR REPAIR & MAINTENANCE @ 30 % OF RENTAL VALUE, THE NET TAXABLE RENTAL INCOME FROM PROPERTY AT PATNA COMES AT RS. 50,400/ IN VIE W OF THIS A SUM OF RS.50,400/ IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. DURING THE COURSE OF SEARCH & SEIZURE OPERATION CONDUCTED & POST SEARCH ENQUIRY STATEMENT ON OATH OF SHRI D.K.SRIVASTAVA, JOINT GENERAL MANAGER OF IVRCL INFRASTRUCTURE & PROJECTS L TD. WAS RECORDED. IT WAS STATED BY SHRI D . K.SRIVASTAVA THAT THE ASSESSEE HAD DONE LIASONING WORK FOR M/S IVRCL INFRASTRUCTURE AND PROJECTS LTD IN JHARKHAND TO GET RURAL ELECTRIFICATION TENDER IN JHARKH AND, FOR WHICH M/S IVRCL INFRASTRUCTURE & PROJECTS LTD HAS PAID 1% TENDER (CONTRACT) AMOUNT AS COMMISSION BY INFLATING THE BILLS OF SUB CONTRACT WORK' DONE BY SRI ABHISHEK SINGH. IT WAS ALSO STATED THAT INITIALLY RS.50, 00,000/ WAS PAID TO SRI ABHISHEK SINGH THROUGH CHEQUE AGAINST THE WORK ORDER AS MOBILIZATION AMOUNT AND THE BALANCE WAS PAID BY ADJUSTING IN THE BILLS OF LATER PERIODS. IN THIS CONNECTION ASSESSEE WAS REQUESTED TO FURNISH COMPLETE DETAILS OF ALL PAYMENTS IN CHEQUES AS WELL AS IN CA SH RECEIVED FROM IVRCL AND WHETHER THE SAME W AS OFFERED TO INCOME TAX OR NOT. ASSESSEE COULD NOT EXPLAIN , PROPERLY, THEREFORE, AO MADE ADDITION OF RS.50,00,000/ . 12 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 35. ON APPEAL, LD. CIT(A) ENHANCED THE ADDITION BY RS. 1.35 CRORES , OBSERVING THE FOLLOWIN GS: IN VIEW OF THE ABOVE FACTS AND DISCUSSIONS, THE ADDITION MADE BY THE AO AT RS. 50 LAKH AS UNDISCLOSED COMMISSION INCOME IS HEREBY ENHANCED TO RS. 1,35,00,000/ . THUS, THE UNDISCLOSED INCOME OF THE APPELLANT FOR THE CURRENT ASSESSMENT YEAR IS TAKEN AT RS. 1.35 CRORE AS AGAINST RS. 50 LAKH TAKEN BY THE A O A. THE TOTAL INCOME GETS ENHANCED BY RS. 75 LACS. AS THE UNDISCLOSED INCOME IS ENHANCED, THE AO IS DIRECTED TO ISSUE FRESH PENALTY NOTICE FOR CONCEALMENT , INCLUDING ENHANCED PORTION OF UNDISCLOSED I NCOME AT THE TIME OF PASSING APPEAL EFFECT ORDER . 36. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSE IS IN APPEAL BEFORE US. 37. W E HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT LD. CIT(A) HAS CONFIRMED THE ADDIT ION OR ENHANCED ADDITION SOLELY ON THE STATEMENT OF SHRI D.K. SRIVASTAVA. THE STATEMENT OF SHRI D.K. SRIVASTAVA HAS NOT BEEN CROSS EXAMINED. THE GENERAL RULE OF EVIDENCE IS THAT NO PERSON CAN BE FOUND TO BE A WITNESS AGAINST HIMSELF. THUS, IN THE ABSENC E OF CORROBORATIVE EVIDENCE, THE STATEMENT RECORDED CANNOT BE MADE THE BASIS OF ADDITION. IN THE INSTANT CASE LD. AO ERRED IN NOT GIVING OPPORTUNITY OF CROSS EXAMINATION, FOR THAT WE RELY ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMB ER INDUSTRIES 281 ITR 214 (SC), WHEREIN IT WAS HELD THAT NOT ALLOWING THE ASSESS E E TO CROSS EXAMINE THE WITNESS BY ADJUDICATING AUTHORITY , THOUGH THE STATEMENT OF THOSE WITNESS WERE MADE THE BASIS OF THE IMPUGNED ORDER, IS A SERIOUS FLAW OF LAW WHICH M AKES THE ORDER NULLITY. 38 . GROUND NO. 7 RAISED BY THE ASSESSE E RELATES TO CHARGING OF INTEREST U/S. 234A/B/C. 13 IT (SS) 68 & 69/RAN/2016 A.YS 2009 10 & 2010 11 SRI ABHISHEK SINGH 3 9 . WE DIRECT THE AO TO CHARGE THE INTEREST U/S. 234 A/B/C ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME . ( VIDE JURISDICTIONAL JHAR KHAND HIGH COURT IN THE CASE OF AJAY PRAKASH VERMA, TA NO. 38 OF 2010 (2012) (1) TM 140 ) . 40 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 0 4 2019 SD/ SD/ ( S. S. GODARA ) (DR. A.L.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05 0 4 2019 *PRADIP (SR.PS) COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ ASSESSEE : S RI A BHISHEK SINGH 101, 201 SHRI GANESH APARTMENT, PHASE II, DR. BHOSLE LANE, HARIHAR SINGH ROAD MORABADI, RANCHI 834008. 2 THE RESPONDENT/ REVENUE : THE DCIT, CENTRAL CIRCLE 3, RANCHI 3. THE CIT , 4. THE CIT(A) , 5. DR, RANCHI BEN CHES, RANCHI TRUE COPY, BY ORDER, SENIOR P.S ITAT, RANCHI BENCHES