ACIT, Cuttack V. Ramesh Kumar Chhapolia, Cuttack

ITSSA 8/CTK/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8424 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 27-04-2011
• Assessment Year: misc
• Appeal Filed On: 11-06-2010
• Court: TRIBUNAL
• Department Lawyers: RESPECTIVE AYS ARE AGITATING
• Assessee Lawyers: IN AY ASSESSMENT YEAR
• Keywords: Unexplained cash credit
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T(SS) A.NO. 8,17,18,19 AND 20/CTK/2010 C.O.14/CTK/2010 (FILED BY THE ASSESSEE IN AY 2002 - 03) / ASSESSMENT YEAR 2002 - 03,2003 - 04,2004 - 05,2005 - 06 AND 2006 - 07 ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), CUTTACK. - - - VERSUS - SRI RAMESH KUMAR CHHAPOLIA, NAYASARAK, CUTTACK 753 002. PAN: ADKPC 9383 R ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI M.R.PANIGRAHI, DR / FOR THE RESPONDENT: / SHRI D.K.SETH/M.SETH, AR / ORDER PER BENCH: THESE APPEALS BY THE REVENUE, FOR THE RESPECTIVE AYS ARE AGITATING THE ORDERS OF THE LEARNED CIT(A) GIVING RELIEF TO THE ASSESSEE WHO WAS SUBJECTED TO SEARCH OPERATION UNDER THE PRO VISIONS OF SECTION 132 RENDERING ORDERS U/S.153A/143. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE DEALT WITH BY THE LEARNED CIT(A) GIVING PART RELIEF HAD BEEN AGITATED BEFORE THE TRIBUNAL BY THE ASSESSEE WHICH STOOD DISPO SED OF BY THEIR ORDER DT.23.7.2010 IN IT(SS)A NOS.10 TO 13/CTK/2010, WHICH COPY OF THE ORDER IS BEING FURNISHED AND HA D BEEN MADE AVAILABLE TO THE LEARNED DR W HEN HE SOUGHT TIME EARLIER, WHEN THE REVENUES CASES WERE FIXED FOR HEARING. ALL THE ISSUES GROUN D WISE HAVE BEEN DEALT WITH BY THE LEARNED CIT(A) AND THE TRIBUNAL AND THEREFORE AFTER INTERPOLATING THE SAME, THE SUM TOTAL OF THE RESULT WOULD LEAD TO THE FINDING THAT THE ISSUES AGITATED BY THE DEPARTMENT BEFORE THE TRIBUNAL WILL HAVE NO MERIT ON ARGUME NTS ON THE SAME OF FACTS INSOFAR AS THE ASSESSING OFFICER IN THE ORIGINAL ORDERS HAD BEEN REITERATED BY I.T(SS)A.NO. 8,17,18,19 AND 20/CTK/2010 C.O.14/CTK/2010 2 THE LEARNED CIT(A) IN HIS OWN ORDER MAKING IT APPROPRIATE TO BE CONSIDERED BY THE TRIBUNAL IN THEIR ORDER FOR ADJUDICATION. FACTS AS HAVE BEEN DEALT WITH BY THE LEARNED CIT(A) AND THE TRIBUNAL REMAIN UNDISPUTED INSOFAR AS THE GROUNDS RELATE TO THE CONSIDERATION OF THE AMOUNT OF UNDISCLOSED SALES AND THE MARGIN OF PROFIT THEREON AND ON THE BASIS OF TELESCOPING VIS - - VIS THE AMOUNT OF INCOME ALREAD Y DECLARED IN RESPONSE TO NOTICE U/S.153 A WHICH HAS BEEN IGNORED BY THE ASSESSING OFFICER FOR COMPUTING THE INCOME AND NOTED BY THE TRIBUNAL AS WELL AS THE LEARNED CIT(A). 3. THE LEARNED DR SUBMITTED THAT IN THE REVENUES APPEALS HE AGREE S TO THE PROPOS ITION , AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE , THAT THE VARIOUS GROUNDS RAISED IN THE RESPECTIVE AYS HAVE BEEN DEALT WITH BY THE TRIBUNAL IN THE ORDER OF THE LEARNED CIT(A) DEALT WITH BY THE TRIBUNAL ON IDENTICAL FACTS AND CIRCUMSTANCES AGAIN ST WHICH HE HAS NOTHING FURTHER TO SAY. FOR THE PURPOSE OF RECORD, HE RELIED ON THE ORDER OF THE ASSESSING OFFICER FOR HIS PART SUBMISSIONS WHICH MAY KINDLY BE CONSIDERED ACCORDINGLY. HOWEVER, HE IDENTIFIED A Y 2006 - 07 FOR ADDRESSING THE CONTENTION OF THE AO AGITATING THE ORDER OF THE LEARNED CIT(A) WHEN IN GROUND NO.3, THE ASSESSING OFFICER HA S DISPUTED THE ADDITION OF 5 LAKHS UNDER THE HEAD COMMISSION O N SUPPRESSED CONSIGNMENT SALES WHICH THE LEARNED CIT(A) DELETED THE ADDITION BY HOLDING THAT THE SUM OF 5 LAKHS WAS PART AND PARCEL OF THE AMOUNT OTHERWISE DECLARED U/S.153A WAS NOT CATEGORIZED AS MARGIN ON SALES WHICH THE ASSESSEE SUPPRESSED. HE POINTED OUT THAT THE ASSESSING OFFICER HAD ON THE BASIS OF THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO TH E NOTICE U/S.153A HAD NOTED THAT THE SALES ON WHICH A CERTAIN PERCENTAGE WAS TO BE COMPUTED FOR TAXATION DID NOT DISCLOSE COMMISSION EARNED TO BE IDENTIFIED AS COMMISSION ON CONSIGNMENT SALES. HE POINTED OUT THAT THIS MAY BE NOTED. SIMILARLY IN GROUND NO.5 IN ASSESSMENT YEAR 2006 - 07, THE AO HAD I.T(SS)A.NO. 8,17,18,19 AND 20/CTK/2010 C.O.14/CTK/2010 3 MADE AN ADDITION OF 17,75,000 UNDER THE HEAD UNEXPLAINED CASH CREDIT WHICH WAS DEFINED BY THE ASSESSING OFFICER AS CASH DEPOSITED IN THE BANK AGAINST WHICH CHEQUES WERE ISSUED FOR MAKING PURCHASES. THE LEARNED CIT(A) DID NOT MENTION THAT THE CASH WAS AVAILABLE TO INVEST/DE POSIT WAS BROUGHT FORWARD IN THE DECLARATION OF INCOME AS WAS RENDERED FOR TAXATION FOR THE COMBINED BLOCK PERIOD AT 38 LAKHS. HE THEREFORE PRAYED THAT THE TRIBUNAL HAS UPHELD THE ORDER OF THE LEARNED CIT(A) ON THESE TWO ISSUES MAY KINDLY BE DELIBERATED TO THE EXTENT THAT THE ISSUES STAND COVERED BY THE ORDER OF THE TRIBUNAL AS CONFIRMED BY THE LEARNED CIT(A). 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PARTICULAR GROUNDS NOW POINTED OUT TO BE ADJUDICATED ON THE FACTS AND CIRCUMSTANCES OF THE CASE REQUIRE NO FURTHER DELIBERATION INSOFAR AS THE TRIBUNAL WAS APPRISED OF THE FACT THAT THE LEARNED CIT(A) HAS NOTED THAT THESE TWO ADDITIONS AMOUNTING TO 17,75,000 AND 5 LAKHS RESPECTIVELY WERE TO BE TELESCOPED FOR THE BLOCK PERIOD WHEN THE LEARNED CIT(A) CATEGORICALLY NOTED THAT 21 LAKHS FOR THE ASSESSMENT YEAR 2006 - 07 TOOK CARE OF THE PURPORTED COMMISSION ON CONSIGNMENT SALES WHICH HAD REMAINED UNDISC LOSED TO BE DEALT ON THE BASIS OF PERCENTAGE OF SALES ONLY TO BE CONSIDERED FOR TAXATION. HAVING REDUCED THE PERCENTAGE FOR TAXATION ON THE SALES WAS NOT THE INTENTION OF THE AO FOR THE PURPOSE OF TH IS ADDITION WAS THEREFORE RIGHTLY CONSIDERED BY THE LEARN ED CIT(A) AS HE CHOSE TO CONSIDER THE TOTAL DECLARATION MADE IN THE BLOCK PERIOD FOR CASH TO BE AVAILABLE TO THE ASSESSEE TO B E DEPOSITED IN THE BANK. IT IS NOBODYS CASE THAT THE UNDISCLOSED INCOME HAS TO BE IDENTIFIED EMERGING FROM A PARTICULAR SOURCE. T HE ASSESSING OFFICER THEREFORE HAD ONLY TO BRING TO TAX THOSE ITEMS ON THE BASIS OF HIS SPECIFIC FINDING WHICH REMAINED UNDISCLOSED EVEN AFTER NOTICE U/S.153A BUT RETURNED BY THE ASSESSEE DECLARING A TOTAL SUM OF 38 LAKHS FOR TAXATION. THE I.T(SS)A.NO. 8,17,18,19 AND 20/CTK/2010 C.O.14/CTK/2010 4 17 .75 LAKHS AN D 21 LAKHS TOTAL 38 LAKHS WHICH WAS ONLY TO BE TELESCOPED BY THE LEARNED CIT(A) IN HIS BRIEF PARA INDICATING 38 LAKHS DECLARED BY THE ASSESSEE COVERS THE AMOUNT SO BROUGHT TO TAX BY THE ASSESSING OFFICER IN THE FIRST PLACE. 5 . WE HAVE HEARD THE RIVAL C ONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . ON OUR CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES , WE ARE INCLINED TO HOLD THAT THE ISSUES RAISED BY THE REVENUE IN THEIR APPEALS BEFORE US WERE DEALT IN A COMMON ORDER BY THE TRIBUNAL WAS ON THE ASSESSES APPEAL HAD BEEN ANALYZED ON THE FACTS AGAINST WHICH NO FURTHER CONTROVERTING MATERIAL HAS BEEN BROUGHT O N RECORD TO SUBSTANTIATE MERIT IN THE REVENUES APPEALS. ON THE TWO ADDITIONS DELETED BY THE LEARNED CIT(A) WE FIND JUSTIFICATION IN T HE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS TRIED TO IDENTIFY THE NATURE OF UNDISCLOSED INCOME NOT PERTAINING TO THE AMOUNTS WHICH HE FOUND BY WAY OF DEPOSIT IN BANK IN CASH AND ON CONSIGNMENT SALES WHEN A CERTAIN PE RCENTAGE MAY HAVE BEEN EARNED BY HIM. HAVING ADJUDICATED ON THE PERCENTAGE OF MARGIN ON THE UNDISCLOSED SALES AND ACCEPTABLE AND IT WAS THE LEARNED CIT(A)S ENDEAVOR TO CORRELATE THE AMOUNT DECLARED IN PURSUANCE TO NOTICE U/S.153A BY THE ASSESSEE TO IDENTI FY THE NATURE OF INCOME BY CLEARLY INDICATING THAT THE INCOME WAS GENERATED ON THE BASIS OF THE TRANSACTIONS WHICH THE ASSESSING OFFICER HAD HELD REMAINED UNDISCLOSED MERELY WAS TO TELESCOPE ON THE BASIS OF FIGURES AS COMPUTED BY THE ASSESSING OFFICER AND THE AMOUNTS DECLARED FOR TAXATION BY THE ASSESSEE. BOTH THE AMOUNTS ARE WITHIN THE LIMIT DECLARED FOR TAXATION THEREFORE CANNOT BE TAXED AGAIN WAS RIGHTLY DELETED BY THE LEARNED CIT(A) ON THE FACTS AND CIRCUMSTANCES WHICH THE LEARNED DR HAS AGREED REMAINED TO BE MENTIONED BUT WAS THE SAME AS NOTED BY THE TRIBUNAL. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE I.T(SS)A.NO. 8,17,18,19 AND 20/CTK/2010 C.O.14/CTK/2010 5 APPEALS FILED BY THE REVENUE, SINCE THE ISSUES ARE COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THEIR APPEALS . 6 . IN THE RE SULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED. THE CROSS OBJECTION FILED BY THE ASSESSEE SUPPORTING THE ORDER OF THE LEARNED CIT(A) IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 28 TH APRIL,201 1 SD/ - SD/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 28 TH APRIL, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), CUTTACK. 2 / THE RESPONDENT: SRI RAMESH KUMAR CHHAP OLIA, NAYASARAK, CUTTACK 753 002. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENI OR.PRIVATE SECRETARY.