D.C.I.T CC - XXIII,kolkata, Kolkata V. Sri Ramesh Bhaniramka, Kolkata

ITSSA 75/KOL/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2900 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 28-09-2016
• Assessment Year: misc
• Appeal Filed On: 07-06-2013
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: A K TIBREWAL
• Keywords: Search and seizure; Document seized; Documents seized

Judgement Text

1 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI N. V. VASUDEVAN, JM & SHRI M. BALAGAN ESH, AM] I.T(SS).A NO. 75/KOL/2013 ASSESSMENT YEAR: B.P 1997-98 TO 2002-03 & BROKEN PERIOD FROM 01.04.2002 TO 28.10.2002 DEPUTY COMMISSIONER OF INCOME-TAX, VS. SHRI RAMES H BHANIRAMKA C.C. XXIII, KOLKATA. (PAN: AEFPB2486J) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 07.12.2016 DATE OF PRONOUNCEMENT: 27.01.2017 FOR THE APPELLANT: SHRI G. MALLIKARJUNA, CIT, DR FOR THE RESPONDENT: SHRI A. K. TIBREWAL, FCA ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-III, KOLKATA VIDE APPEAL NO. 68/CC-XXIII/CIT(A)C-III/07-08/KOL DATED 25.03.2013. ASSESSMENT WAS FRAMED BY ACIT, CENTRAL CIRCLE-XXIII, KOLKATA U/S. 158BC/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR BP 01.04.1996 TO 28.10.2002 VIDE HIS ORDER DATED 23.07.2007. 2. THE ONLY ISSUE TO BE DECIDED IN THIS BLOCK APPE AL IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE IN RES PECT OF VARIOUS ADDITIONS WITH SPECIFIC REFERENCE TO SEIZED MATERIALS IN THE FACTS AND CIRC UMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS CASE IS THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF TIMBER TRADING AS PROPRIETOR OF SHREE KRISHNA TRADERS. IN THE COURSE OF SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT, A COMPUTER WAS IMPOUNDED AND TAKEN IN CUSTODY BY TH E DIRECTORATE OF INVESTIGATION ON 28/10/2002. PRINTOU TS FROM THE SAID COMPUTER WERE TAKEN SUBSEQUENTLY IN FEBRUARY, 2003 AND INVENTORISED AS SKDP/L TO SKDP/3. THE SAID COMPUTER PRINT OUTS CONTAINED THE REGULAR BOOKS OF ACCOUNT O F THE PROPRIETARY CONCERN SHREE KRISHNA TRADERS AND THE OTHER FAMILY CONCERN M/S. SHREE DAD U IMPEX (P) LTD. IN FOLDERS FOR DIFFERENT FINANCIAL YEARS. IN RESPONSE TO NOTICE U/ S. 158BC, BLOCK RETURN WAS FILED DECLARING UNDISCLOSED INCOME OF RS.10,000/- IN RESPECT OF DEP OSIT INTO A BANK ACCOUNT WITH SBI, 2 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, AIRPORT BRANCH OPENED BY THE ASSESSEE, BUT NOT DISC LOSED IN THE REGULAR BOOKS. ASSESSMENT WAS HOWEVER COMPLETED ON AN ASTRONOMICAL FIGURE OF RS.1,54,97,054/- BEING THE TOTAL OF ASSETS AS PER PRINT OUT ON PAGE 24 OF INVENTORY SKD P/3, WITHOUT APPRECIATING THE NATURE OF ENTRIES THEREON. THE FINDINGS OF THE LD. A.O. AS STATED IN ASSESSMEN T ORDER ARE AS UNDER - 1. IT IS OBSERVED FROM PAGE 24 OF SKDP/3 THAT BALANCE SHEET AS ON 31/03/2003 SHOWS TOTAL ASSETS OF RS. 1,54,97,054/-, WHILE IN T HE RETURN FOR A. Y. 2003- 04, THE ASSET SHOWN AS RS.71,11,558/- AND MOST OF T HE ENTRIES DO NOT TALLY. 2. FROM THE SEIZED BALANCE SHEET, IT SEEMS THAT IT REP RESENTS HIS UNDISCLOSED BALANCE SHEET IN ADDITION TO WHAT IS DISCLOSED WITH THE DEPARTMENT. 3. SUBMISSION SUBMITTED BY THE ASSESSEE IN REPLY TO TH E SHOW CAUSE WAS INSUFFICIENT, WITHOUT ANY CORROBORATIVE EVIDENCE AN D NOT AT ALL SATISFACTORY. 4. ON CLOSE SCRUTINY OF THE DETAILS AVAILABLE, IT S EEMS THAT THE BALANCE SHEET SHOWING TOTAL ASSETS OF RS.1,54,97,054/- IS ITS UND ISCLOSED BALANCE SHEET AND MOST OF THE ITEMS OF REGULAR BALANCE SHEET DOES NOT MATCH. 4. THE ASSESSEE SUBMITTED BEFORE THE LD CIT(A) AS UNDE R :- 1) SEARCH WAS CONDUCTED ON 28/10/2002 AND THE COMP UTER WAS IMPOUNDED /TAKEN IN CUSTODY BY THE DIRECTORATE OF INVESTIGATION. PRI NTOUTS OF THE COMPUTER WERE TAKEN IN FEBRUARY, 2003. IT IS NOT UNDERSTOOD HOW T HE ACCOUNTING FIGURES FOR PERIOD UP TO 28/10/2002 (I. E., DATE ON WHICH COMPU TER WAS IMPOUNDED) WOULD TALLY WITH THE BALANCE SHEET FIGURES AS ON 31/03/20 03 FILED WITH THE RETURN FOR ASSESSMENT YEAR 2003-04. THUS THE DISCREPANCY POINT ED OUT BY THE LD. A.O. DOES NOT HOLD GOOD. SINCE THE ACCOUNTING FOLDER WAS CREA TED IN THE COMPUTER FOR THE ACCOUNTING YEAR 2002-03, THE CAPTION ON ALL THE FIN ANCIAL STATEMENTS WOULD BE 31ST MARCH,2003. BUT THIS IS COMMON KNOWLEDGE THAT THOSE ACCOUNTS AS ON 28/10/2002 COULD NOT CONTAIN THE TRANSACTIONS AFTER THAT DATE. IF THAT BE THE CASE, SUCH ACCOUNTS COULD ONLY BE DEEMED AS PROJECTED/ESTIMATED ACCOUNT S FOR THE YEAR AND ASSESSMENT CALL NOT BE MADE ON PROJECTIONS. 2) FROM THE ASSESSMENT ORDER, IT IS OBVIOUS THAT IT SEEMS TO THE LD. A.O. THAT THE BALANCE SHEET SHOWING TOTAL ASSETS OF RS. 1,54,97,0 54/- IS ITS UNDISCLOSED BALANCE SHEET, WITHOUT ANY SPECIFIC ADVERSE FINDING. THE ON LY REASON FOR SUCH AN ASSUMPTION IS THAT MOST OF THE ITEMS DOES NOT MATCH WITH THE REGULAR BALANCE 3 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, SHEET AS ON 31/03/2003 FILED WITH THE RETURN FOR AS SESSMENT YEAR 2003-04. IT HAS BEEN EXPLAINED HEREINABOVE THAT THE ACCOUNTS IN THE COMPUTER CONTAINED TRANSACTIONS UP TO 28/10/02 (I.E., THE DATE ON WHIC H COMPUTER WAS IMPOUNDED) AND THEREFORE THE BALANCE SHEET PRINTED FOR THE ACCOUNT ING YEAR 2002-03 SHOWED THE SUMMARY OF TRANSACTIONS CONTAINED THEREIN FOR THE P ERIOD UP TO 28/10/2002 ONLY AND IT IS NOR PROPER AND JUSTIFIED TO COMPARE THOSE FIGURES WITH THE FINAL BALANCE SHEET AS ON 31/03/2003 FILED WITH THE RETURN FOR AS SESSMENT YEAR 2003-04, WHICH CONTAINED TRANSACTIONS FOR THE WHOLE ACCOUNTING YEA R INCLUDING THOSE UP TO 28/10/2002. MOREOVER, NO ASSESSMENT CAN BE FRAMED O N ASSUMPTIONS, AS DONE BY THE LD. A.O. 3) IN REPLY TO SPECIFIC SHOW CAUSE, SUBMISSIONS WER E MADE BY THE ASSESSEE BEFORE THE LD. A.O. EXPLAINING THE FIGURES APPEARING ON TH E IMPUGNED SEIZED PAPER PAGE 24 OF SKDP/3 (COPY ENCLOSED) AND ALSO CLARIFIED IN DETAIL IN COURSE OF ASSESSMENT PROCEEDINGS. THE EXPLANATION SO SUBMITTED HAS BEEN REJECTED BY THE LD. A.O. IN A SINGLE LINE THAT THE SUBMISSION WAS INSUFFICIENT AN D NOT AT ALL SATISFACTORY, WITHOUT POINTING OUT ANY SPECIFIC DEFECT THEREIN. SUCH AN A CTION OF THE LD. A.O. IS NOT PROPER &JUSTIFIED. 5. THE ASSESSEE SUBMITTED THAT REGULAR ACCOUNTS OF HIS PROPRIETARY CONCERN M/S SHREE KRISHNA TRADERS WERE MAINTAINED ON MERCANTILE BASIS IN THE COMPUTER IN SEPARATE FOLDERS FOR THE DIFFERENT ACCOUNTING YEARS I.E FROM APRIL TO MA RCH. PAGE NOS. 26 TO 32 OF THE SEIZED DOCUMENT CONTAINED PRINT OUT OF THE FINANCIAL STATE MENTS FOR THE YEAR ENDED 31 ST MARCH 2002. PAGES 26 TO 28 CONTAINED TRIAL BALANCE AS ON 31.3 .2002 PAGE 29 - CONTAINED TRADING & PROFIT AND LOSS ACC OUNT FOR THE YEAR ENDED 31.3.2002 (CLOSING STOCK FIGURE OF RS 54,26,417/-) PAGE 30 - CONTAINED BALANCE SHEET AS ON 31.3.200 2 (CASH BALANCE OF SR. 42,503.30 AND UNION BA NK BALANCE OF RS. 33,576.10) PAGES 31 & 32 - LIST OF SUNDRY DEBTORS & SUNDRY CR EDITORS IT WAS FURTHER SUBMITTED THAT THE ACCOUNTS FOR THE YEAR ENDED 31.3.2002 WERE UNDER AUDIT ON 28.10.2002 WHEN THE SEARCH WAS CONDUCTED. AUDIT RE PORT WAS OBTAINED ON 30.10.02 AND THE AUDITED ACCOUNTS FOR THE SAID YEAR ENDED 31.3.2002 TALLY EXACTLY WITH THE PRINT OUT TAKEN FROM THE COMPUTER AS ABOVE. IT WAS STATED THAT SI NCE THE AUDITED ACCOUNTS FOR THE PRECEDING YEAR WERE NOT AVAILABLE WITH THE ASSESSEE UPTO THE DATE OF SEARCH, ALL THE OPENING ENTRIES AS 4 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, ON 1.4.2002 WERE NOT PASSED IN THE ACCOUNTS FOR THE CURRENT FINANCIAL YEAR (I.E FY 2002-03). THE ASSESSEE TRIED TO EXPLAIN EACH AND EVERY ITEM I N THE BALANCE SHEET WHICH WAS SEIZED. FOR THE SAKE OF CONVENIENCE, THE SEIZED BALANCE SHE ET IS REPRODUCED HEREUNDER :- BALANCE SHEET AS ON MARCH 31, 2003 LIABILITIES AMOUNT ASSETS AMOUNT SUNDRY CREDITORS CASH OPENING OLD BOOKS PANDUA SAW MILL PROFIT & LOSS APPROPRIATION UNION OPENING TOTAL 9409632.00 12503.30 838099.02 33920.00 6069324.29 33576.10 15497054.71 SUNDRY DEBTORS (D) CAR LOAN (BANK OF PUNJAB) CASH LOCAL SALES TAX RAMESH BANIRAMKA SHREE BABU IMPEX PVT. LTD. TELEPHONE SECURITY UNION BANK OF INDIA TOTAL 14676408.01 258750.00 65940.00 149221.10 8552.09 21000.00 303455.61 3000.00 10727.10 15497054.71 6. THE ENTIRE SUBMISSIONS OF THE ASSESSEE WERE SEN T TO THE LD AO FOR HIS PERUSAL AND COMMENTS IN THE REMAND PROCEEDINGS. THE LD AO SUBM ITTED HIS REMAND REPORT ON 12.3.2013. IN THE SAID REMAND REPORT, THE LD AO S TATED THAT AFTER RECEIVING THE LETTER FROM LD CITA CALLING FOR REMAND REPORT, THE ASSESSEE WAS AS KED TO EXPLAIN THE NATURE OF ENTRIES RECORDED IN THE SEIZED BALANCE SHEET. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEES AR APPEARED FROM TIME TO TIME AND EXPLAINED THE MATTER AND FURNISHED VARIOUS DETAILS AND DOCUMENTS INCLUDING CASH BOOK AND LEDGER AS ON 28.1 0.2002 I.E THE DATE OF SEARCH AND AS ON 31.3.2003 TOGETHER WITH THE BANK STATEMENTS, PURCHA SE VOUCHERS AND SALE BILLS FOR THE PERIOD BETWEEN 28.10.2002 TO 31.3.2003. THE LD AO STATED THAT ALL THESE DOCUMENTS WERE EXAMINED AND VARIOUS ENTRIES RECORDED IN THE SEIZED BALANCE SHEET WERE RECONCILED WITH THE ENTRIES OF BALANCE SHEET AS ON 31.3.2003 AS FILED W ITH THE RETURN OF INCOME FOR THE ASST YEAR 2003-04 AND THE FOLLOWING CONCLUSIONS ARE ARRIVED A T :- 6. IT IS FACT THAT THE SEIZED BALANCE SHEET CANNOT BE TREATED AS THE BALANCE SHEET AS ON 31/3/2003 AS THE SEARCH WAS CONDUCTED ON 28/10/2002 AND IT CA NNOT BE COMPARED WITH THE BALANCE SHEET FURNISHED ALONG WITH RETURN FOR THE ASSESSMENT YEAR 2003-04. HENCE, ASSESSING OFFICER'S OBSERVATION THAT TOTAL ASSETS AND MOST OF THE ENTRI ES REFLECTED IN THE SEIZED BALANCE SHEET DOES NOT TALLY WITH THE BALANCE SHEET FOR YEAR ENDING 31/3/2 003 IS WITHOUT ANY BASIS. 7. THE FIRST ENTRY ON THE LIABILITY SIDE OF THE SEI ZED BALANCE SHEET IS OF SUNDRY CREDITORS. THE BREAK UP OF SUNDRY CREDITORS OF RS.94,89,632/- IS AS UNDE R:- RAMANI TIMBER MART --- 8,000.00 NIMBARK IMPEX PVT. LTD. --- 6,39,911.00 SHRUTI TRADING & ENTERPRISES 88,41,721.00 94,89,632.00 5 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, 7(I). RARNANI TIMBER MART - THE ASSESSEE CLAIMED TH AT THIS AMOUNT SHOULD BE RS.18,000/- INSTEAD OF RS.8,000/-. A/R STATED THAT RS.10,000/- RELATED TO EARLIER YEAR WAS NOT CARRIED FORWARD AS ON 28/10/2002. THIS CLAIM IS HOWEVER NO VERIFIABLE. TH E OTHER ENTRIES SUBSEQUENT TO 28/10/2002 AND TILL 31/3/2003 WERE VERIFIED FROM CASH BOOK AND BAN K BOOK. AS PER PARTY LEDGER, BALANCE AS ON 31/3/2003 IS NIL WHICH IS SAME AS THAT IN REGULAR B ALANCE SHEET AS ON 31/3/2003. 7(II). AS REGARD NIRNBARK IMPEX PVT. LTD. AND SHRUT I TRADING & ENTERPRISES ARE CONCERNED, THE ENTRIES SUBSEQUENT TO 28/10/2002 AND TILL 31/3/2003 WERE VERIFIED FROM CASH BOOK AND BANK BOOK. AS PER PARTY LEDGER, BALANCE AS ON 31/3/2003 IS NIL WHICH IS SAME AS THAT IN REGULAR BALANCE SHEET AS ON 31/3/2003. 8. THE SECOND ENTRY OF THE LIABILITY SIDE IN THE SE IZED BALANCE SHEET IS OF CASH OPENING FOR RS.42,503/- WHICH IS THE OPENING CASH BALANCE AS PE R REGULAR CASH BOOK AS ON 1/4/2002. 9. THE THIRD ENTRY OF LIABILITY SIDE OF SEIZED BALA NCE SHEET IS THAT OF OLD BOOKS SHOWING RS.8,38,099/-. A/R EXPLAINED THAT THIS AMOUNT REPRE SENTED THE NET BALANCE OF SOME OF THE DEBTORS AND CREDITORS BROUGHT FORWARD FROM THE PREVIOUS YEA R AS PER UNAUDITED STATEMENT OF ACCOUNTS AS ON 31/312002. HE ALSO STATED THAT SUBSEQUENTLY, ON RECEIPT OF THE AUDITED STATEMENT OF ACCOUNTS OF F.Y .2001-02, THIS ACCOUNT WAS SQUARED OFF BY PASSI NG THE NECESSARY ENTRIES. THE PARTY WISE BREAKUP OF OLD BOOK ENTRIES WAS ALSO FURNISHED. THE SAME IS REPRODUCED BELOW:- DEBIT CREDIT SHRUTI TRADING CO. 88,41,721.00 ZENITH TIMBER P RODUCTS PVT. LTD. 88,56,792.00 NIMBARK IMPEX 64,39,911.00 SHREE DADU IMPE X PVT. LTD. 34,21,315.61 RAMANI TIMBER MALI 1,15,288.00 SUNDRY DEBTORS-MI SE. PARTIES 7,74,746.49 OLD BOOKS 8,38,099.02 SUNDRY DEBTORS-MISC. PARTIES 31,82,164.92 1,62,35,019.02 1,62,35,019.02 THE ENTRIES MENTIONED AGAINST THE RESPECTIVE CONCER NS WERE VERIFIED FROM THE RESPECTIVE PARTY LEDGERS IN THE REGULAR BOOKS AND WERE FOUND TO BE C ORRECT. 10. THE FOURTH ENTRY OF LIABILITY SIDE OF SEIZED BA LANCE SHEET IS THAT OF PANDUA SAW MILL FOR RS.33,920/-. A/R STATED THAT THIS AMOUNT REPRESENTE D THE AMOUNT RECEIVED FROM THE PARTY FROM 1/4/2002 TO 28/10/2002 AS ADVANCE AGAINST SALE. THE PAYMENTS RECEIVED WERE VERIFIED FROM THE PARTY LEDGER AS WELL AS FROM CASH BOOK AND BANK STA TEMENT. 11. THE FIFTH ENTRY OF LIABILITY SIDE OF SEIZED BAL ANCE SHEET IS THAT OF PROFIT & LOSS APPROPRIATION F OR RS.50,59,324.29. ACCORDING TO A/R, THIS AMOUNT REPR ESENTED PROFIT AS ON 28/10/2002 AFTER ACCOUNTING FOR THE RECEIPTS AND EXPENSES FROM 1/4/2 002 TO 28/10/2002. HE ALSO STATED THAT THIS ACCOUNT DID NOT ACCOUNT FOR OPENING STOCK AND CLOSI NG STOCK. A/R PRODUCED A TRADING ACCOUNT FOR THE PERIOD FROM 1/4/2002 TO 28/1 0/2002 AFTER INCOR PORATING THE RECEIPTS AND EXPENSES AS PER SEIZED ACCOUNTS, OPENING STOCK BEING THE CLOSING ST OCK FOR F.Y.2001-02 AS PER REGULAR BOOKS AND CLOSING STOCK ESTIMATED AT RS.4,90,657/-. THIS ESTI MATION OF CLOSING STOCK WAS MADE AFTER CONSIDERING G.P. MARGIN @ 3.97% ON THE BASIS OF AUD ITED STATEMENT OF ACCOUNTS FOR THE F.Y. 2002-03. A PROFIT OF RS.2,31,378/- WAS ARRIVED AT. HOWEVER, NEITHER THE ESTIMATION OF CLOSING STOCK IS VERIFIABLE NOR IT CAN BE SAID THAT THE PRO FIT OF RS.2,31,378/- SO ARRIVED AT REPRESENTED ACTUAL PROFIT AS ON 2811 0/2002 OR NOT. 12. THE SIXTH ENTRY OF LIABILITY SIDE OF SEIZED BAL ANCE SHEET IS THAT OF UNION OPENING FOR RS.33,576.10 WHICH AS PER BANK STATEMENT OF UNION B ANK OF INDIA IS THE BANK BALANCE AS ON 1/4/2002. 13. THE FIRST ENTRY OF ASSET SIDE OF SEIZED BALANCE SHEET IS THAT OF SUNDRY DEBTORS (D) FOR RS.1,46,76,408/-. A/R STATED THAT THIS AMOUNT REPRE SENTED THE PART OF SUNDRY DEBTORS AS ON 1/4/2002 AS REDUCED BY THE AMOUNT OF RECEIPTS/SALES /OTHER TRANSACTIONS MADE DURING THE PERIOD 6 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, FROM 1/4/2002 TO 28/10/2002. PARTY WISE BREAKUP OF THE SAID BALANCE AND RESPECTIVE PARTY LEDGERS WERE ALSO SUBMITTED. THESE ARE AS UNDER:- BENGAL SAW MILL 6,171.00 CHISEL ARTS 12,82,359.73 ELETE ENGNG. CO. 15,218.00 FAIRWAY WOOD PRODUCTS 1,11,719.00 FIDA HUSSAIN SAW MILL 3,02,715.00 GORAKH TIMBER WORKS 1,59,860.04 LNDO PLY HOUSE 8,47,598.00 KARUNAMOYEE SAW MILL 14,630.80 KANIKA INFOCOMM GLOBAL LTD. 1,901.00 LAXMI BUSINESS PROMOTION PVT. LTD. 79,32 8.60 NEW HOWRAH TIMBER 37,008.38 NOVOUS INTERIORS PVT. LTD. 2,54,998.40 OM WOOD CRAFT INDIA 1,89,159.24 PARWARTAK FURNITURE LTD. 25,791.06 PRABHU LAL & CO. 1,83,181.00 SHARE BLADE MFG, CO. PVT. LTD. 33,077. 00 ZENITH TIMBER PRODUCT PVT. LTD. 1,1 1,31,690.00 TOTAL . 1,46,76,408.00 THE FIGURES NOTED ABOVE ARE THE BALANCE STANDING IN CREDIT AGAINST THE RESPECTIVE PARTIES AS ON 28/1 0/2002. THE RESPECTIVE PARTY LEDGERS SUBMITTED BY A/R REFLECTED TRANSACTIONS IN THE FORM OF PAYMENTS RECEIVED AND SALE FROM 28/10/2002 TO 31/3/ 2003. THESE TRANSACTIONS WERE VERIFIED FROM CASH BOOKS, BANK STATEMENT AND SALE BILLS WHEREVER APPLICABLE. THE BALANCE AS ON 28/1 0/2002 AND 31/3/2002 WERE AS PER REGULAR BOOKS AGAINST ALL THE CONCERNS EXCEPT THAT IN THE CASE OF CHISEL ARTS. IN THE CASE OF CHISEL ARTS, SEIZED BAL ANCE SHEET REFLECTS BALANCE OF RS.12,82,359/- WHEREAS AS PER PARTY LEDGER FURNISHED BY A/R, IT IS RS.11,82,359/-. THE DIFFERENCE WAS RECONCILED BY A/R EXPLAINING THAT IT WAS DUE TO A CHEQUE OF RS .1,00,000/- RECEIVED FROM PARTY ON 21/10/2002 BUT NOT ENTERED IN THE BOOKS BEFORE THE DATE OF SEA RCH. BUT THE SAME WAS ENTERED AFTER 28/10/2002. IT IS NOT CLEAR AS TO WHY THE ENTRY WAS NOT MADE ON THE DATE OF RECEIPT WHEN ENTRIES IN RESPECT OF ALL OTHER TRANSACTIONS WERE ENTERED ON T HE DATES OF THEIR OCCURRENCE. 14. THE SECOND ENTRY OF ASSET SIDE OF SEIZED BALANC E SHEET IS THAT OF SUSPENSE ACCOUNT FOR RS.2,58,750/-. A/R STATED THAT AS MOST OF THE OPENI NG BALANCES WERE NOT CARRIED FORWARD BEFORE THE DATE OF SEARCH I.E. 28/10/2002, THE PAYMENTS MA DE TO LOAN CREDITORS WERE NOT RECORDED IN THEIR RESPECTIVE LEDGER TILL 28/10/2002 AND ALL THE PAYME NTS MADE DURING THE PERIOD FROM 1/4/2002 TO 28/10/2002 WAS DEBITED TO THIS ACCOUNT AND SUBSEQUE NTLY TRANSFERRED TO THE RESPECTIVE LEDGER AFTER 28/10/2002. A/R ALSO SUBMITTED THE PARTY WISE BREAKUP OF SUCH LOANS AND THE DATE OF PAYMENTS OF THE SAME AS UNDER:- ANJU MITTAL 1,00,000/- ARUN AGARWAL 15,000/- BAHADUR MAL KHAJANCHI 2,500/- BIJAY RUNGTA 40,000/- HARI KISHAN DAMANI 23,750/- HARI PRASAD AGARWAL 10,000/- JUGAL KISHORE MAHESWARI 10,000/- M/S. GITA JALAN TRUST 10,000/- MURARILAL KHAJANCHI 2,500/- I RASHMI GOYAL 10,000/- SMT: GITA JALAN TRUST 20,000/- SUDHA BEN DE SAHA 10,000/- VISCO TRADERS ASSOCIATED PVT. LTD. 5,000/- TOTAL 2,58,750/- 7 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, A/R ALSO FURNISHED THE DETAILS OF REPAYMENTS MADE B Y THE ASSESSEE IN THE PERIOD FROM 1/4/2002 TO 31/3/2003. THE OPENING BALANCE OF THE RESPECTIVE LO ANS WERE VERIFIED FROM THE REGULAR BALANCE SHEET AS ON 31/312002. THE REPAYMENTS WERE VERIFIED FROM CASH BOOKS AND BANK STATEMENT. IT IS SEEN THAT AFTER ADJUSTMENTS OF REPAYMENTS TILL 28/L 0/2002, THE FIGURES TALLY WITH THAT GIVEN AS ABOVE WHICH IS THE FIGURE AS PER SEIZED BALANCE SHE ET. 15. THE THIRD ENTRY OF ASSET SIDE OF SEIZED BALANCE SHEET IS THAT OF CAR LOAN FOR RS.65,940/-. A/R EXPLAINED THAT REPRESENT THE REPAYMENT OF SIX INSTA LMENTS OF CAR LOAN FROM 1/4/2002 TO 28/L0/2002 @ RS.1 0,990/- PER MONTH. IN THIS REGARD, HE ALSO S TATED THAT THE OPENING BALANCE OF RS.2,80,401/- WAS CARRIED FORWARD ONLY AFTER THE RECEIPT OF AUDIT ED STATEMENT OF ACCOUNTS AND THE SAME HAS BEEN RECORDED AFTER 28/1 0/2002. THIS WAS THE REASO N, THE CAR LOAN WAS APPEARING ON THE ASSET SIDE OF THE SEIZED BALANCE SHEET. THE REPAYMENTS OF RS.10,990/- HAS BEEN VERIFIED FROM THE BANK STATEMENT. 16. THE FOURTH ENTRY OF ASSET SIDE OF SEIZED BALANC E SHEET IS THAT OF CASH BALANCE OF RS.1,49,221/-. ALTHOUGH CASH BOOK AS ON 28/L 0/2002 REFLECTS CASH BALANCE OF RS.2,31,263/-, AS PER SEIZED BALANCE SHEET IT IS RS.1,49,221/-. THE MATTER WAS P OINTED OUT TO A/R. HE STATED THAT CERTAIN CASH ENTRIES WERE NOT ENTERED AS ON THE DATE OF SEARCH I .E. 28/10/2002 ALTHOUGH TRANSACTIONS HAD ALREADY OCCURRED. A RECONCILIATION STATEMENT WAS FU RNISHED WHICH IS VERIFIED FROM CASH BOOK AND BANK STATEMENT. 17. THE FIFTH ENTRY OF ASSET SIDE OF SEIZED BALANCE SHEET IS THAT OF LOCAL SALES TAX FOR RS.8,552/-. ACCORDING TO A/R, THIS AMOUNT REPRESENT THE EXCESS PAYMENT MADE BY ASSESSEE DURING THE PEIOD 1/4/2002 TO 28/10/2002 ON ACCOUNT OF SALES TAX AND IS VERIFIED FROM RESPECTIVE LEDGER. 18. THE SIXTH ENTRY OF ASSET SIDE OF SEIZED BALANCE SHEET IS THAT OF RAMESH BHANIRAMKA FOR RS.21,000/-. THIS REPRESENTS THE CAPITAL CONTRIBUTI ON MADE BY PROPRIETOR SHRI RAMESH BHANIRAMKA IN THE BUSINESS OF SHREE KRISHNA TIMBER FROM 1/4/2002 TO 28/10/2002 @ RS.3,000/- PER MONTH. THE SAME HAS BEEN VERIFIED FROM CAPITAL ACCOUNT OF RARNESH BHANIRAMKA. 19. THE SEVENTH ENTRY OF ASSET SIDE OF SEIZED BALAN CE SHEET IS THAT OF SHREE DADU LRNPEX PVT. LTD. FOR RS.3,03,455.61 A/R STATED THAT THIS AMOUNT REPR ESENTED RUNNING ACCOUNT OF THE CONCERNED PARTY TILL 28/10/2002. THE SAME HAS BEEN VERIFIED F ROM RESPECTIVE LEDGER ACCOUNT AND TRANSACTIONS VERIFIED FROM CASH BOOK AND BANK STATEMENT. OPENING BALANCE AS ON 1/4/2002 AND CLOSING BALANCE AS ON 31/3/2003 ALSO VERIFIED FROM THE RESP ECTIVE REGULAR BALANCE SHEETS. 20. THE EIGHT ENTRY OF ASSET SIDE OF SEIZED BALANCE SHEET IS THAT OF TELEPHONE SECURITY FOR RS.3,000/-. A/R STATED THAT THIS AMOUNT REPRESENT T HE PAYMENT MADE FROM 1/4/2002 TO 28/10/2002 TO OBTAIN A NEW TELEPHONE CONNECTION. THE SAME IS V ERIFIED FROM CASH BOOK. 21. THE LAST ENTRY IN THE SEIZED BALANCE SHEET IS T HAT OF UNION BANK CLOSING BALANCE AS ON 28/L 0/2002 WHICH IS SHOWN AT RS. 10,727/-. THE SAME HAS BEEN VERIFIED FROM BANK STATEMENT AND RECONCILIATION STATEMENT FURNISHED BY A/R. THIS IS FOR YOUR KIND PERUSAL AND NECESSARY ACTION AT YOUR END. 7. THE ASSESSEE FILED A DETAILED WRITTEN SUBMISSIO N INCLUDING FILING OBJECTIONS TO THE REMAND REPORT TOGETHER WITH THE AUDITED STATEMENT O F ACCOUNTS AS ON 31.3.2002 AND 31.3.2003 ; PAGES 22 TO 25 OF SEIZED DOCUMENTS MARK ED ANNEXURE SKDP/3 AND STATEMENTS SHOWING RECONCILIATION OF ACCOUNTS AS ON 1.4.2002 , AS ON THE DATE OF SEARCH AND AS ON 31.3.2003 ALONG WITH ENTRY WISE DETAIL OF THE SEIZE D BALANCE SHEET AS UNDER:- 8 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, 'WE HAVE FILED OUR SUBMISSIONS AND OTHER NECESSARY EVIDENCES AND DOCUMENTS BEFORE THE ASSESSING OFFICER IN RESPECT OF REMAND REPORT FOR T HE AFORESAID APPEAL. WE HAVE ALSO EXPLAINED ALL THE QUERRIES RAISED FOR AND ON BEHALF OF OUR AB OVE-REFERRED CLIENT. ON OUR REQUEST, YOU HAVE GIVEN US THE COPY OF REMAND REPORT SUBMITTED TO YOU BY THE LEARNED ASSESSING OFFICER. ON CHECKING OF THE SAID REMAND REPORT, WE FOUND THA T ALMOST ALL THE POINTS WERE TAKEN AND TREATED AS EXPLAINED BY THE LEARNED ASSESSING OFFIC ER BASED ON OUR SUBMISSIONS AND OTHER DOCUMENTARY EVIDENCES FROM TIME TO TIME AND EXAMINA TION OF BOOKS OF ACCOUNTS FOR THE FINANCIAL YEAR 2002-03. WE ARE SURPRISED TO SEE THAT THE SOME OF THE POINTS WERE LEFT UNATTENDED AND TREATED AS UNEXPLAINED IN SPITE OF THE FACT THAT NECESSARY PAP ERS AND DOCUMENTS WERE SUBMITTED ALONG- WITH RECONCILIATION STATEMENTS. WE ARE HEREBY ENCLO SING OUR WRITTEN SUBMISSION ON THE POINTS RAISED BY THE LEARNED ASSESSING OFFICER FOR AND ON BEHALF OF THE ASSESSEE. THIS IS IN ADDITION TO THE WRITTEN SUBMISSION AND OTHER DETAILS ALREADY FI LED BEFORE YOU BY THE ASSESSEE ON 29.12.2008. WE ARE ALSO ENCLOSING COPY OF THE WRITTEN SUBMISSIO N DT.29.12.2008, COPIES OF AUDITED STATEMENT OF ACCOUNTS FY 2001-02 AND 2002-03, PAGE 22 TO 25 OF SEIZED INVENTORY MARKED SKDP/3 AND STATEMENTS SHOWING RECONCILIATION OF ACC OUNTS AS ON 01.04.2002, AS ON THE DAY OF SEARCH AND AS ON 31.03.2003 FOR YOU KIND PERUSAL AN D RECORD. OUR SUBMISSION IS THAT:- THE LEARNED ASSESSING OFFICER IS WRONG IN TALLYING AND MATCHING THE ACCOUNTING ENTRIES AS PER THE AUDITED STATEMENT OF ACCOUNTS AS ON. 31ST MARCH , 2003 WITH THE ACCOUNTS PRINT-OUT HAVING TRANSACTIONS FOR THE PERIOD FROM 01.04.2002 TO 28.1 0.2002. HOW IS IT POSSIBLE TO DRAW AN INFERENCE THAT ON THE DATE OF SEARCH I.E 28.10.2002 , THE SEARCH TEAM WILL FIND THE ACCOUNTS MADE FOR AND UPTO 31.03.2003. IT IS HIGHLY RIDICULOUS TO ASSUME THAT THE BALANCE SHEET AS ON 31.03.2003 CAN BE DRAW M ON 28.10.2002. THE LEARNED ASSESSING OFFICER IN HIS REMAND REPORT DATED 12.03.2013 HAS CLEARLY MENTIONED IN PARA 6 THAT 'IT IS FACT THAT THE SEIZED BALANCE SHEET CANNOT BE TREATED AS THE BALANCE SHEET AS ON 31.03.2003 AS THE SEARCH WAS CONDUCTED ON 28.10.2002 AND IT CA NNOT BE COMPARED WITH THE BALANCE SHEET FURNISHED ALONG WITH RETURN FOR THE ASSESSMENT YEAR 2003-04. HENCE, ASSESSING OFFICER'S OBSERVATION THAT TOTAL ASSETS AND MOST OF THE ENTRI ES REFLECTED IN THE SEIZED BALANCE SHEET DOES NOT TALLY WITH THE BALANCE SHEET FOR THE YEAR ENDIN G 31.03.2003 IS WITHOUT ANY BASIS. ' THE LEARNED ASSESSING OFFICER IS WRONG IN MENTIONI NG IN HIS ASSESSMENT ORDER THAT MOST OF THE ENTRIES IN THE PAGE 24 OF SKDP/3 DO NOT TALL Y WITH THE ACCOUNTS. IF THAT BE SO, HOW CAN THE LEARNED OFFICER MENTION IN HIS REMAND REPORT THAT BALANCE SHOWN UNDER THE HEAD SUNDRY CREDITORS, SUNDRY DEBTORS AND OTHER HEADS ARE IN ORDER AND AS PER THE REGULAR BALANCE SHEET AS ON 31.03.2003 AND ALSO MEN TIONED 'VERIFIED FROM THE RESPECTIVE PARTY LEDGERS IN THE REGULAR BOOKS AND FOUND TO BE CORREC T. THE LEARNED ASSESSING OFFICER, AT TIME OF PASSING A SSESSMENT ORDER, HAS NOT GIVEN EVEN A SINGLE INSTANCE OF UNVERIFIABLE ITEM/ENTRY AND MADE THE UN LAWFUL ADDITION. THE LEARNED ASSESSING OFFICER IS WRONG IN TREATING THE TOTAL OF BALANCE SHEET AS UNDISCLOSED INCOME. BEFORE DOING SO, THE TOTAL OF OPENING BALAN CE SHEET SHOULD HAVE BEEN DEDUCTED, IF THAT BE THE INTENTION OF LEARNED OFFICER AT THE TIME OF PASSING THE ASSESSMENT ORDER. THE LEARNED ASSESSING OFFICER IS WRONG IN TREATING THE TOTAL OF BALANCE SHEET AS UNDISCLOSED INCOME WITHOUT REJECTING THE AUDITED STATEMENT OF A CCOUNTS FOR FY 2001-02 AND 2002-03. 9 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, EVERY TRANSACTIONS OF THE ASSESSEE HAVE BEEN PROPER LY ACCOUNTED, DOCUMENTED AND SUPPORTED BY EVIDENCES AND ARE AS PER REGULAR BOOKS OF ACCOUNTS FOR THE FY 2002-03.' 8. THE LD CIT(A) DELETED THE ADDITIONS BY OBSERVIN G AS UNDER :- FROM THE FACTS OF THE CASE IT IS OBSERVED THAT SI NCE THE SEARCH WAS CONDUCTED ON 28.10.2002, BALANCE SHEET AS PER PAGE-24 OF SEIZED BUNCH OF PAPERS MARKED SKDP/3 WILL SHOW THE RESULTS ONLY UP TO THAT DATE AND IT IS ERR ONEOUS TO ASSUME THAT THE BALANCE SHEET AS ON 31.03.2003 CAN BE DRAWN ON 28.10.2002. IT APPARE NTLY WAS BECAUSE OF THE PRE- PROGRAMMING THAT THE DATE WAS WRITTEN AS '31.03.200 3' ON THE BALANCE SHEET AS PER PAGE-24 OF SKDP/3.THEREFORE, COMPARING THE SEIZED BALANCE S HEET AS ON 28.10.2002 WITH THE AUDITED BALANCE SHEET AS ON 31.03.2003, WHICH IS FILED WITH THE RETURN OF INCOME FOR A. Y. 2003-04, IS NOT A LOGICAL ACTION ON THE PART OF THE A.O. AND IS ERRONEOUS. THE A.O. HIMSELF IN HIS REMAND REPORT AT POINT NO. 6 REPORTED THAT 'IT IS FACT THA T THE SEIZED BALANCE SHEET CANNOT BE TREATED AS THE BALANCE SHEET AS ON 31.03.2003 AS THE SEARCH WAS CONDUCTED ON 28.10.2002 AND IT CANNOT BE COMPARED WITH THE BALANCE SHEET FURNISHED ALONG WITH RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04.' HENCE, MISMATCH OF THE EN TRIES REFLECTED IN THE SEIZED BALANCE SHEET WITH THE BALANCE SHEET FOR THE YEAR ENDING 31 .03.2003 IS ONLY LOGICAL. FURTHER, THE A.O. HAS REPORTED IN THE REMAND REPORT THAT HE HAD CHECK ED AND VERIFIED ALL THE ENTRIES OF THE BALANCE SHEET ON PAGE-24 OF SEIZED BUNCH OF PAPERS MARKED SKDP/3 FROM THE AUDITED BALANCE SHEET OF F. Y. 2001-02 & 2002-03, CASH BOOK , LEDGER AND BANK STATEMENTS AND FOUND THE SAME AS PER REGULAR BOOKS OF ACCOUNTS. THE DIFFERENCE OF RS.10,000/- AND RS.L,00,000/- IN RESPECT OF M/S RAMANI TIMBER MART (CREDITOR) AND M/S CHISEL ARTS (DEBTOR) HAS BEEN RE PORTED BY THE A.O. IN THE REMAND REPORT TO HAVE BEEN EXPLAINED BY THE A.R. WITH RECONCILIAT ION AND OTHER DOCUMENTARY EVIDENCES INCLUDING PARTYS CONFIRMATION AND THE SAME HAS BEE N REPORTED TO BE AS PER THE REGULAR BOOKS OF ACCOUNT. IN VIEW OF THE FACTS DISCUSSED ABOVE THE ADDITION O F RS.L,54,97,054/- MADE BY THE A.O. IS FOUND TO WITHOUT ANY BASIS AND UNJUSTIFIED. HENCE, THE ADDITION IS DELETED. THEREFORE, APPELLANTS APPEAL IN RESPECT OF GROUND NOS. 2 AND 3 IS ALLOWED. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT THE LD AO WHO GAVE THE REMAND REPORT ACCEPTING THE SUBMISSIONS OF THE ASSESSEE TOGETHER WITH ITS RECONCILIATION OF THE SEIZED DOCUMENTS , HAD PREFERRED THIS APPEAL BEFORE US BEING AGGRIEVED AGAINST THE ORDER OF THE LD CITA, WHICH IN OUR CONSIDERED OPINION, IS BASELESS AND OUGHT NOT TO HAVE BEEN DON E. BEFORE US, THE LD DR STATED THAT NO EXAMINATION WAS CARRIED OUT BY THE LD AO IN THE REM AND PROCEEDINGS AND HENCE THE APPEAL HAS BEEN RIGHTLY FILED BY THE REVENUE AND THE LD CI TA ERRED IN GIVING RELIEF BY RELYING ON THE SUBMISSIONS OF THE ASSESSEE. IN RESPONSE TO THIS, THE LD AR STATED THAT ALL THE ITEMS IN THE SEIZED BALANCE SHEET WERE DULY RECONCILED AND THE L D AO HAD NOT STATED ANY ADVERSE COMMENTS ON THE SAME IN HIS REMAND REPORT. THE LD CITA HAVING TAKEN COGNIZANCE OF THE SAME AND THE DETAILED WRITTEN SUBMISSIONS OF THE AS SESSEE AS STATED SUPRA, HAD GRANTED RELIEF TO THE ASSESSEE, WHICH SHOULD NOT BE INTERFERED WIT H. WE FIND THAT THE LD CITA HAD PASSED A SPEAKING ORDER BY TAKING INTO ACCOUNT ALL THE FACTS AND FIGURES, RECONCILIATIONS FILED BY THE 10 IT(SS)A NO.75/KOL/2013 RAMESH BHANIRMKA, ASSESSEE WHICH HAS BEEN ACCEPTED BY THE LD AO IN TH E REMAND PROCEEDINGS WITHOUT DRAWING ANY ADVERSE INFERENCE THERETO. IN THESE CIRCUMSTAN CES, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD CITA. ACCORD INGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.01.20 17 SD/- SD/- (N. V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 27 TH JANUARY, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT DCIT, C.C. XXIII, KOLKATA 2 RESPONDENT SHRI RAMESH BHANIRAMKA, 4, RAM SETT ROA D, KOLKATA-700 006. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .