DCIT CENTRAL CIRCLE-1, Ranchi V. M/s BKB Transport Pvt Ltd, Ranchi

ITSSA 92/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3774 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E S UNIL BABU CITA DHANBAD
• Assessee Lawyers: M K CHOUDHARY
• Keywords: Unexplained expenditure; Search and seizure; Document seized; Source of fund; Documents seized
• Section: 69C; 40A(3); 37

Judgement Text

1 IT (SS) A NO. 92 /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. 92 /RAN/201 6 A.Y. : 20 12 - 201 3 DY/ASSTT. CIT, CENTRAL CIRCLE - 1, RANCHI V S M/S BKB TRANSPORT PVT LTD . 2F, VATIKA APARTMENT, LINE TANK ROAD, BEHIND TOYOTA SHOWROOM RANCHI, JHARKHAND - 834001 P AN NO. : A A AC B 7488 C (APPELLANT ) . RESPONDENT REVENUE BY :SHRI K. E . S UNIL BABU, CIT(A), DHANBAD ASSESSEE BY : SHRI M.K.CHOUDHARY, ADVOCATE DA TE OF HEARING : 2 8 . 05 .201 8 DATE OF PRONOUNCEMENT : 30 . 05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT ( A ) - 3 , PATNA , DATED 21.10.2016 , FOR THE ASSESSMENT YEAR 2012 - 2013 , WHEREIN T HE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 73,70,000/ - & RS.1,85,42,100/ - ON ACCOUNT OF DISALLOWANCE OF EXPENSES U/S. 40A(3) AND UNEXPLAINED EXPENDITURE. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN RULING - OUT THE SEIZED MATERIALS MARKED VRS - 16, VRS - 23, VRS - 25, VRS - 26 & VRS - 32 - 35 WHICH CLEARLY INDICATE THAT EXPENSES OF RS.73,70,000/ - HAVE BEEN INCURRED IN CASH. FROM THE SEIZED DOCUMENTS, IT IS CLEARLY SEEN THAT 2 IT (SS) A NO. 92 /RAN/ 201 6 THE VIOLATION OF SECTION 40A(3) OF THE I.T.ACT, 1961 HAS OCCURRED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF CASE, THE LD. CIT(A) HAS ERRED IN RULING - OUT THE SEIZED MATERIALS MARKED B KBT/2 CONTAINING LOOSE SHEETS/CASH PANNA/VOUCHERS ETC., WHICH CLEARLY INDICATE THAT AMOUNT IN THE LEFT HAND SIDE OF THESE PAGES CONTAIN DETAILS OF MONEY RECEIVED AND THE RIGHT HAND SIDE CONTAIN DETAILS OF PAYMENTS MADE OR EXPENSES INCURRED IN CASH IN THE N AME OF V ARIOUS PERSONS TOTALLING TO RS. 1,85,42,1 00/ - IN F.Y. 2011 - 12. THUS, RS. 1,85,42,100/ - ATTRACTS THE PROVISION OF UNEXPLAINED EXPENDITURE U/S.69C OF THE I.T.ACT, 1961. 2 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA NSPORT CONTRACTOR. THERE WAS A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE CASE OF BKB GROUP ON 30.05.2012. CONSEQUENTLY, THE AO INITIATED PROCEEDINGS U/S.153A OF THE ACT AND MADE THE ADDITION OF RS.73,70,000/ - U/S.40A(3) OF THE ACT AND RS.1,85,42,10 0/ - PASSED U/S.143(3) R.W.S153A OF THE ACT, DATED 16.02.2015. 3 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE TH E AO. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND THE FINDINGS OF AO, ALLOWED THE APPEAL OF THE ASSESSEE. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . LD. DR BEFORE US SUBMITTED THAT THE CI T(A) HAS ERRED IN RULING - OUT THE SEIZED MATERIALS MARKED VRS - 16, VRS - 23, VRS - 25, VRS - 26 & VRS - 32 - 35 WHICH CLEARLY INDICATE THAT EXPENSES OF RS.73,70,000/ - HAVE BEEN 3 IT (SS) A NO. 92 /RAN/ 201 6 INCURRED IN CASH. FROM THE SEIZED DOCUMENTS, IT IS CLEARLY SEEN THAT THE VIOLATION OF SECTI ON 40A(3) OF THE ACT HAS BEEN OCCURRED AND PRAYED FOR ALLOWING THE APPEAL 6 . ON THE OTHER HAND, LD. AR SUPPORTED THE ORDER OF CIT(A). 7 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, THE SOLE MATRIX OF THE DISPUTED ISSUE IS WITH RESPECT TO THE DELETING THE ADDITION S ON ACCOUNT OF DISALLOWANCE OF EXPENSES U/S.40A(3) AND UNEXPLAINED EXPENDITURE. WE FIND THAT THE CIT(A) WHILE DEALING WITH THE DISPUTED ISSUE OF DISALLOWANCE U/S.40A(3), OBSERVED THAT THE DISALLOWANCE BY THE AO U/S.40A(3) OF THE ACT PERTAINING TO THE SAME EXPENSES ALREADY DISALLOWED BY THE TAX AUDITOR WILL LEAD TO DOUBLE TAXATION. THE OBSERVATIONS OF THE CIT(A) ON THIS ISSUE ARE AS UNDER : - AFTER CONSIDERING THE AOS FINDING AND SUBMISSION OF THE APPELLANT, I FI ND THAT THE APPELLANT HAS SUBMITTED DETAILED LIST OF DISALLOWANCE OF EXPENSES AMOUNTING TO RS. 74,39,986/ - AS PER FORM NO. 3CD, CLAUSE 17(E) OF THE TAX AUDIT REPORT. THE EXAMPLE GIVEN BY THE AO IN THE ASSESSMENT ORDER FOR EXPENDITURE OF RS. 9,07,800/ - INCU RRED IN CASH TOWARDS ASH MISCELLANEOUS EXPENSES ARE INCLUDED IN THE DISALLOWANCE BY THE TAX AUDIT REPORT. SIMILARLY, ALL OTHER EXPENSES NOTED BY THE AO IN THE ASSESSMENT ORDER FOR DISALLOWANCE U/S 40A(3) OF THE ACT ARE ALREADY INCLUDED IN THE DISALLOWANC E OF RS. 74,39,986/ - BY THE TAX AUDITOR. THUS, FURTHER DISALLOWANCE BY THE AO U/S 40A(3) OF THE ACT PERTAINING TO THE SAME EXPENSES ALREADY DISALLOWED BY THE TAX AUDITOR WILL LEAD TO DOUBLE TAXATION*. CONSIDERING THIS FACT, THE DISALLOWANCE OF RS. 73,70,00 0/ - IS NOT SUSTAINABLE AND THE SAME IS HEREBY DELETED. LD. DR COULD NOT BRING ANY NEW FACTS ON RECORD TO CONTROVERT THE ABOVE FINDINGS OF THE CIT(A). ACCORDINGLY, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF CIT(A) ON THIS ISSUE AND THE SAME IS UPHELD AND THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 4 IT (SS) A NO. 92 /RAN/ 201 6 8 . WITH RESPECT TO ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE, WE FIND THAT THE CIT(A) WHILE DEALING WITH THE DISPUTED ISSUE HAS OBSERVED THAT THE ASSESSEE HAS PROVED FROM THE EVIDENCES O F ITS REGULAR CASH BOOK AND BAN K STATEMENT THAT ALL THE TRANSACTIONS AS PER SEIZED CASH PANNA ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE CIT(A) ON THIS ISSUE ARE AS UNDER : - AFTER CONSIDE RING THE AOS FINDING AND SUBMISSION OF THE APPELLANT, I FIND THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION, THE SEIZED DOCUMENT INCLUDED CASH PANNA OF THE APPELLANT COMPANY AT KOLKATA OFFICE WHEREIN THE LEFT HAND SIDE INDICATES THE SOURCE OF FUND AN D THE RIGHT HAND SIDE INDICATES VARIOUS EXPENSES. THE AO PICKED UP CASH AMOUNTS MENTIONED UNDER NAMES OF DIFFERENT PERSONS ON VARIOUS DATES ON THE RIGHT HAND SIDE OF CASH PANNA AND TREATED THE SAME AS EXPENSES INCURRED IN VIOLATION OF SEC. 40A(3) OR EXPENS ES NOT ALLOWABLE U/S 37 OF THE ACT OR UNEXPLAINED EXPENSES U/S 69C OF THE ACT. ON THE OTHER HAND, THE APPELLANT HAS SHOWN FROM HIS REGULAR CASH BOOK THAT ALL THE TRANSACTIONS NOTED ON THE SEIZED CASH PANNA WAS NOTHING BUT PART OF REGULAR CASH BOOK MAINTAIN ED AT - KOLKATA OFFICE. THE APPELLANT HAS FURNISHED THE PRINT OUT OF CASH BOOK OF RELEVANT DATES WHICH INDICATES ALL THE ENTRIES MENTIONED IN THE CASH PANNA ON VARIOUS DATES ARE INCLUDED IN THE CASH BOOK OF RESPECTIVE DATES, IT,IS ALSO PERTINENT TO MENTION HERE THAT THE SOURCE OF FUND NOTED ON THE LEFT HAND SIDE OF THE SEIZED CASH PANNA IS EITHER WITHDRAWAL FROM THE BANK ACCOUNT OR CASH PERTAINING TO SOME BRANCH OFFICES OF THE APPELLANT COMPANY WHICH WERE BROUGHT BY EMPLOYEES / DIRECTORS / RELATIVES OR FRIEN DS OF THE DIRECTOR. THE RELEVANT BANK STATEMENT COPIES WERE ALSO PRODUCED AND SUBMITTED BY THE APPELLANT TO PROVE THAT THE SOURCE OF FUND NOTED ON THE CASH PANNA MATCHES WITHDRAWAL IN THE RESPECTIVE BANK A/C OF THE APPELLANT COMPANY. CONSIDERING THESE FACT S, I FIND THAT THE NOTINGS ON THE CASH PANNA ARE NOTHING BUT PART OF REGULAR BOOKS OF A/C OF THE APPELLANT. THE AO HAS DRAWN CONCLUSION REGARDING THE TRANSACTIONS IN THE CASH PANNA MERELY ON THE PRESUMPTION THAT THERE COULD NOT HAVE BEEN MOVEMENT OF FUNDS BY WAY OF HUGE CASH FROM ONE OFFICE TO DIFFERENT BRANCH OFFICES OF THE COMPANY. FURTHER, THE AO HAS PICKED UP ONLY A PART OF TRANSACTION ON THE RIGHT HAND SIDE OF CASH PANNA AS UNEXPLAINED EXPENDITURE OR DISALLOWABLE EXPENDITURE IGNORING THE SOURCE OF FUND ON THE LEFT HAND SIDE AND OTHER EXPENSES ON THE RIGHT HAND SIDE. THIS INDICATES THAT THE AO DID NOT CONSIDER THESE CASH PANNA AS DOCUMENTS CONTAINING UNACCOUNTED TRANSACTION. ONLY BECAUSE BEING CASH AMOUNTS IN THE RANGE OF RS. 5 LACS TO RS. 15 LACS ARE BE ING MOVED FROM ONE BRANCH 5 IT (SS) A NO. 92 /RAN/ 201 6 OFFICE TO ANOTHER BRANCH, THE AO CONCLUDED THE SAME AS UNACCOUNTED / UNEXPLAINED EXPENDITURE. AS THE APPELLANT HAS PROVED FROM THE EVIDENCES OF ITS REGULAR CASH BOOK AND BANK STATEMENT, THAT ALL THE TRANSACTIONS AS PER SEIZED CASH PANNA ARE DULY RECORDED IN THE REGULAR, BOOKS OF ACCOUNTS, THE ADDITION MADE BY THE AO ON THIS ISSUE AMOUNTING TO RS. 1,85,42,100/ - IS NOT SUSTAINABLE AND THE SAME IS HEREBY DELETED. BEFORE US, LD. DR COULD NOT BRING ANY NEW FACTS ON RECORD TO CONTROVE RT THE ABOVE FINDINGS OF THE CIT(A). ACCORDINGLY, WE ARE WITH CONFORMITY WITH THE FINDINGS OF CIT(A) ON THE DISPUTED ISSUE AND THE SAME IS UPHELD AND THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 9 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMB ER RANCHI, DATED 30 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT DY/ASSTT. CIT, CENTRAL CIRCLE - 1, RANC HI 2. THE RESPONDENT M/S BKB TRANSPORT PVT LTD., 2F, VATIKA APARTMENT, LINE TANK ROAD, BEHIND TOYOTA SHOWROOM RANCHI, JHARKHAND - 834001 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.