M/s Modi Project Ltd, Ranchi V. DCIT, Ranchi

ITSSA 8/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3795 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SUTARIYA CITA JSR
• Assessee Lawyers: S K PODDAR
• Keywords: Search and seizure
• Section: 234B

Judgement Text

1 IT (SS) A NO. 08 /RAN/ 201 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER IT (SS) A NO. 08 /RAN/201 6 A .Y. : 20 09 - 201 0 M/S MODI PROJECT LTD., BODI BHAWAN, KANKE ROAD, RANCHI V S THE DCIT,C ENTRAL CIRCLE - 2, RANCHI P AN NO. : A ABCM 8164 H (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR, ADV. REVENUE BY :SHRI D.K.SUTARIYA, CIT(A), JSR DATE OF HEARING : 2 2 . 05 .201 8 DATE OF PRONOUNCEMENT : 24.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3 , PATNA , DATED 12.01.2016 , FOR THE ASSESSMENT YEAR 20 09 - 2010 , WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS.7,25,000/ - OUT OF TOTAL ADDITION OF RS. 10,10,500/ - BEING THE AMOUNT OF CASH FOUND AT THE TIME OF SEARCH. THE ADDITION SUSTAINED IS UNJUSTIFIED, ILLEGAL AND INCORREC T. 2. FOR THAT THE MANAGING DIRECTOR OF THE APPELLANT MADE STATEMENT IN COURSE OF SEARCH TO SUGGEST THAT RS. 10,10,500/ - WAS THE CASH BALANCE AVAILABLE FOR THE APPELLANT. THE TURNOVER OF THE APPELLANT WAS MORE THAN 50 CRORES AND CASH BALANCE OF RS.10 LAKH CANNOT BE CONSIDERED AS EXCESSIVE OR OUT OF PROPORTION. THE DISALLOWANCE MADE BY LD. AO ITSELF WAS ILLEGAL AND INCORRECT. 2 IT (SS) A NO. 08 /RAN/ 201 6 3. FOR THAT LD. CIT(A) WAS OF THE VIEW THAT RS.7,25,000/ - WAS RECEIVED BY THE APPELLANT FROM TWO WORKING SITES, AS SUCH, THE CREDIT IN THE CASH BOOK ON 18.3.2009 I.E. TWO DAYS PRIOR TO THE SEARCH IS UNJUSTIFIED. THE APPELLANT WAS TO SEND CASH TO THE SITE OFFICES AND THERE WAS NO REASON FOR SITE OFFICE TO SEND CASH TO MAIN OFFICE. 4. FOR THAT THE APPELLANT IS WORKING AT AROUND 30 DIFFEREN T SITES AND THE FUNDS AVAILABLE FROM BANK ACCOUNT OR OTHERWISE IF REQUIRED BY THE OTHER SITES ARE BROUGHT TO MAIN OFFICE AT RANCHI. IN CASE FUNDS ARE NOT REQUIRED IMMEDIATELY WE DO NOT DESIRE TO KEEP FUNDS AT SITE OFFICE. AS SUCH, THE FUND RECEIVED FROM TH E SITE OFFICE IS NORMAL FEATURE AND IS FULLY VERIFIABLE FROM THE ACCOUNTS OF SITE OFFICE. LD. CIT(A) WAS, THEREFORE, NOT JUSTIFIED IN MAKING DISALLOWANCE OF RS.7,25,000/ - U/S 69A OUT OF CASH BALANCE FOUND DURING SEARCH. 5. FOR THAT THE ENTIRE PAYMENT OF TH E APPELLANT WAS SUBJECT TO TDS. AS SUCH, APPELLANT WAS NOT LIABLE TO PAY ADVANCE TAX AS PER PROVISION OF SECTION 234B. AS SUCH, INTEREST U/S 234B AND 234C WAS NOT TO BE CHARGED. LD. CIT(A) GAVE DIRECTION TO CHARGE INTEREST AS PER PROVISION OF THE ACT. THIS IS ILLEGAL AND UNJUSTIFIED. CIT(A) SHOULD HAVE GIVEN A FINDING ON THIS ISSUE. THERE ARE NUMBER OF DECISIONS BY HON'BLE APPELLATE AUTHORITIES TO SUGGEST THAT INTEREST WAS NOT CHARGEABLE IF ENTIRE RECEIPTS ARE SUBJECT TO TDS. 6. FOR THAT THE CREDIT FOR ENTI RE AMOUNT OF TDS CLAIMED FOR WHICH THE TDS CERTIFICATE ARE AVAILABLE SHOULD BE ALLOWED. 7. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 2. BRI EF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRU CTION ON CONTRACT BASIS WITH RAILWAYS AND STATE GOVERNMENT AND FILED RETURN OF INCOME WITH TOTAL INCOME AT RS.5,23,78,420/ - . THERE WAS SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT CARRIED OUT IN THE RESIDENTIAL AND BUSINESS PREMISES OF MODI GROUP OF CASES ON 20.03.2009 AND SUBSEQUENT DATES. ACCORDINGLY THE CASE WAS TAKEN UP FOR ASSESSMENT U/S.153A OF THE ACT. IN RESPONSE TO NOTICE U/S.153A OF THE ACT THE ASSESSEE FILED RETURN OF INCOME WITH TOTAL INCOME AT 3 IT (SS) A NO. 08 /RAN/ 201 6 RS.5,23,78,400/ - . THEREAFTER THE AO COMPLETED THE A SSESSMENT AND ASSESSED TOTAL INCOME AT RS.5,33,88,920/ - AND MADE ADDITION OF RS.10,10,500/ - ON ACCOUNT OF UNEXPLAINED CASH U/S.69A OF THE ACT. 3 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDI NGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS AND LD.CIT(A) HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUES , RESTRICTED THE ADDITION TO THE EXTENT OF RS.7,25,000/ - OUT OF TOTAL ADDITION OF RS.10,10,500/ - MADE BY THE AO. WITH REGARD TO CHARGING OF INTEREST U/S.234A & 234B OF THE ACT, THE CIT(A) DIRECTED THE AO TO CHARGE THE SAME AS PER THE PROVISIONS OF THE ACT AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4 . AGGRIEVED BY THE ORD ER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . BEFORE US, LD. AR SUBMITTED THAT THE ASSESSEE HAS SOURCE S WHICH CAN BE SUBSTANTIATED AND ALSO THE LD. AR EXPLAINED THAT THE CASH FOUND DURING THE SEARCH AND SEIZURE BELONGING TO THE ASS ESSEE COMPANY AND WAS DISCLOSED IN BOOKS OF ACCOUNTS AND THE ASSESSEE ALSO IN THE APPELLATE PROCEEDINGS HAS PRODUCED THE COPY OF CASH BOOK IN RESPECT OF THE DATES ON WHICH THE CASH WAS SEIZED. WHEREAS THE CIT(A) HAVING CONSIDERED THESE FACTS HAS GRANTED RE LIEF AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.7,25,000/ - OUT OF TOTAL ADD ITION OF RS.10,10,500/ - ON THE GROUND THAT THE SAME AMOUNT WAS RECEIVED BY THE ASSESSEE FROM TWO WORKING SITES, AS 4 IT (SS) A NO. 08 /RAN/ 201 6 SUCH, THE CREDIT IN THE CASH BOOK ON 18.03.2009 I.E. TWO DAYS PRIOR TO THE SEARCH, HOWEVER, THE ASSESSEE WAS TO SEND CASH TO THE SITE OFFICES AND THERE WAS NO REASON FOR SITE OFFICE TO SEND CASH TO MAIN OFFICE. LD.AR FURTHER SUBMITTED THAT THE FUND RECEIVED FROM THE SITE OFFICE IS NORMAL FEATURE AND IS FULLY VERIFIAB LE FROM THE ACCOUNTS OF SITE OFFICE AND PRAYED FOR DELETION OF ADDITION. 6 . CONTRA, LD. D R SUPPORTED THE ORDER S OF LOWER AUTHORITIES . 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE MATRIX OF THE DISPUTED ISSUE IS WITH RESPECT TO THE ADDITION MADE BY THE AO OF RS.10,10,500/ - WHICH WAS FOUND DURING THE COURSE OF SEARCH OPERATION AND ON APPEAL, THE CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF RS.7,25,000/ - . BEFORE US LD. AR FILED THE PAPER BOOK REFERRING TO THE AMOUNT I N CASH WITHDRAWN FROM THE BANK. LD. A R FURTHER SUBMITTED THAT IF AN OPPORTUNITY BE PROVIDED THE ASSESSEE CAN SUBSTANTIATE ITS CLAIM BEFORE THE ASSESSING AUTHORITY. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SUBMISSION OF THE ASSESSEE AS WEL L AS IN THE INTEREST OF JUSTICE, WE PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM IN RESPECT OF BANK DEPOSITS, WITHDRAWAL AND TRANSFER FROM OTHER SI T ES BANK ACCOUNT S BEFORE THE AO AND WE REMIT THE ENTIRE ISSUE TO THE FILE OF AO , WHO SHALL VERIFY AND EXAMINE THE DETAILS AND PASS ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE . THE ASSESSEE IS DIRECTED TO COOPERATE IN SUBMITTING THE INFORMATION BEFORE THE AO. 5 IT (SS) A NO. 08 /RAN/ 201 6 8. CHARGING OF INTEREST U/S.234A & 234B OF THE ACT IS CONSEQUENTIAL, THEREFORE, THE AO IS DIRECTED ACCORDINGLY. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 24 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COP Y// SR.PS, ITAT, RANCHI 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.