Smt. Daxaben Kiritbhai Thakkar, Nadiad V. The Income tax Officer, Ward-4, Nadiad

MA 114/AHD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9202 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 20-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: K R DIXIT
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 133A; 69; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACC OUNTANT MEMBER DAXABEN KIRITBHAI THAKKAR, NADIAD (APPELLANT) PAN NO. ABAPT 8071 B VS. THE ITO WARD -4 NADIAD (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR. D.R. ASSESSEE BY : SRI K.R. DIXIT, A.R DATE OF HEARING : 02.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 / ORDER PER : SRI A.K. GARODIA, ACCOUNTANT MEMBER:- THIS M.A. IS FILED BY THE ASSESSEE POINTING OUT VA RIOUS MISTAKES IN THE IMPUGNED TRIBUNAL ORDER. FOR READY REFERENCE, THE M .A. FILED BY THE ASSESSEE IS REPRODUCED BELOW:- THE APPLICANT, WITH DUE RESPECT, SUBMITS THAT THERE ARE FOLLOWING APPARENT ERRORS FROM THE RECORD IN THE TRIBUNALS O RDER. 1. THE TRIBUNAL HAS DRAWN ITS CONCLUSION AGAINST CLEAR EVIDENCE. IT IS ALSO AGAINST FACTUAL STATEMENT BY THE ITO. THE TRIB UNAL HAS ALSO GIVEN A M.A. NO 114/AHD/2012 (ARISING OUT OF ITA NO. 462/AHD/2006) A.Y.:-2002-03 M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 2 FINDING, AS BASIS OF ITS CONCLUSION WHICH IT HAS IT SELF CONTRADICTED. THE TRIBUNAL'S ORDER IS ALSO AGAINST NATURAL JUSTICE. THUS, IT HAS OBSERVED THAT THE ASSESSEE'S AGREEMENT TO ADD THE EXCESS STOCK VALUE FOUND DURING THE SURVEY IN HER RETURN WAS NOT MADE DURING THE SURVEY BUT ALTER THE SURVEY (PGS. 9, 11, 12, 13, IS, 16). THIS ENABLED THE TRIBUNAL TO IGNORE THE CIRCULAR WHICH APPLIED TO STATEMENT DURING THE SURVEY. A) THE ITO HAS STATED THAT IT WAS RECORDED DURING T HE SURVEY. THE TRIBUNAL CANNOT GO AGAINST THE FINDING OF THE ITO IN APPLIC ANT'S APPEAL AND CHANGE THE BASIS OF THE CASE. B) THE TRIBUNAL HAS STATED THAT THE ANSWER TO QUEST ION NO, 8 WAS RECORDED DURING THE SURVEY WHILE ANSWER TO QUESTION NO. 5 WA S RECORDED AFTER THE SURVEY. C) ALTHOUGH THE TRIBUNAL HAS STATED SEVERAL TIMES T HAT THE APPLICANT'S ABOVE AGREEMENT WAS RECORDED AFTER THE SURVEY AS THE BASI S OF ITS DECISION IT HAS ALSO STALED THAT IT WAS RECORDED AT THE TIME OF SUR VEY ( PARA 5.6 PG 13 ) THUS CONTRADICTING ITS OWN FINDING. THE TRIBUNAL HAS ALS O NOT PUT ITS FINDING WHICH IS NEW TO THE ASSESSEE AND THUS DENIED NATURA L JUSTICE TO HER. 2. THE TRIBUNAL HAS GONE AGAINST A MATERIAL PART OF THE ASSESSEE'S LETTER DATED 4/2/2005 (PT B PG.6) THAT THE ASSESSES EXTRA STOCK VALUE WAS ACCUMULATION OF EARLIER YEARS AND COME TO A CONCLUS ION THAT IT WAS AN ADMISSION THAT IT WAS AN ADMISSION THAT IT WAS HER UNACCOUNTED INCOME OF THE CURRENT YEAR (PG. 9, PARA 5, PG, 11 PARA 5.3 ) 3. THE TRIBUNAL HAS ERRONEOUSLY STATED THAT, THE AS SESSEE'S AGREEMENT TO ADD THE VALUE OF THE EXCESS STOCK AS HER INCOME AS IF I T IS HER INCOME OF THE CURRENT YEAR. 4, THE TRIBUNAL HAS HELD THAT THE ASSESSEE BY HER A BOVE AGREEMENT PREVENTED THE DEPARTMENT FROM MAKING FURTHER INVESTIGATION WH ILE THE TRUTH IS THAT THE DEPTT. BY VIOLATING THE CIRCULAR AVOIDED MAKING FURTHER INVESTIGATION. 5. THE TRIBUNAL ( PARA 5, PG 9 ) HAS STATED SUO MOTO THAT SINCE IT WAS 'WELL NEIGH IMPOSSIBLE THAT THE SAID DISCLOSER WAS MADE A ND REITERATED WITHOUT THE CONSENT OF THE HUSBAND OF THE ASSESSEE', THERE WAS NO NEED TO EXAMINE THE HUSBAND. MOREOVER A FACTUAL GAP CANNOT BE FILLED BY AN ASSUMPTION. M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 3 6. THE TRIBUNAL HAS TOTALLY IGNORED THE EVIDENCE OF LOSS DURING THE POST SURVEY PERIOD WHICH WAS BEFORE THE CIT IN THE ASSES SEE'S SUBMISSION GIVEN BEFORE HIM AND WHICH THE TRIBUNAL HAS MENTIONED AT PARA 4. 7. THE TRIBUNAL HAS RELIED UPON A NUMBER OF AUTHORI TIES INCLUDING AN UNREPORTED DECISION (PG 17) AND A QUOTATION FROM A BOOK ON ADMINISTRATIVE LAW AND THE EVIDENCE ACT WITHOUT EVEN GIVING THE AS SESSEE ANY OPPORTUNITY TO MEET THEM (PG, 10,11,12,14,16,17,19) RESULTING I N COMPLETE FAILURE OF NATURAL JUSTICE. THE JUDGMENTS ARE BEFORE THE CIRCULAR AND SO IS THE EVIDENCE ACT. THE QUOTATION FROM THE BOOK IS LOGICALLY DEFECTIVE. 8. THE TRIBUNAL HAS MADE AN APPARENT ERROR IN NOT P ERCEIVING THE OBVIOUS SIMILARITY BETWEEN NOOR JAHAN'S CASE AND THIS CASE. JUST AS IN THAT CASE IT WAS IMPOSSIBLE FOR THE ASSESSEE TO EARN SO MUCH INC OME, SO IN THIS CASE THE ASSESSEE COULD NOT HAVE EARNED SO MUCH IN ONE YEAR. 9. SAME KIND OF ERROR IS MADE IN NOT REALIZING THE SIMILARITY OF THIS CASE WITH DAULATRAM'S CASE. JUST AS IN THAT CASE AN IRRELEVAN T FACT WAS CONSIDERED, IN THIS CASE ALSO THE STOCK DIFFERENCE IS IRRELEVANT B ECAUSE OF THE CIRCULAR. 10. THE TRIBUNAL HAS MADE AN APPARENT ERROR IN PUT TING THE BURDEN ON THE ASSESSEE TO CALL HER HUSBAND TO GIVE EVIDENCE. SINC E IT WAS THE DEPTTS INVESTIGATION ON SURVEY, THE BURDEN WAS ON THE DEPT T. TO DO SO (PARA 5,11 PG 17) THE APPLICANT THEREFORE, PRAYS THAT IN THE LIGHT OF THE ABOVE, THE TRIBUNAL'S ORDER BE CORRECTED SUITABLY. SO THAT, 1) THE LOSS OF THE ASSESSES IS TOTALLY ALLOWED, 2) THE ADDITION U/S 69 IS DELETED. 3) THE ASSESSEE'S BOOK RESULT IS FULLY ACCEPTE D AND THE ASSESSEES APPEAL IF FULLY ALLOWED. 2. IN THE COURSE OF HEARING BEFORE US, LD. A.R. RE ITERATED THE SAME CONTENTIONS WHICH ARE RAISED IN THIS M.A. AS REPROD UCED ABOVE. AS AGAINST THIS, IT WAS SUBMITTED BY LD. D.R THAT THERE IS NO APPARENT MISTAKE IN THIS TRIBUNAL ORDER. M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 4 3. WE HAVE GONE THROUGH THE M.A. AND CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE MAIN ALLEGED MISTAKE AS PER THE M. A. IS THAT THE TRIBUNAL HAS PROCEEDED ON WRONG FACT THAT STATEMENT IN QUEST ION OF THE ASSESSEE WAS RECORDED AFTER THE DATE OF SURVEY. BUT THIS IS NOT CORRECT AND THE STATEMENT WAS RECORDED AT THE TIME OF SURVEY ONLY. HE SUBMIT TED THAT THE SURVEY IN THE PRESENT CASE STARTED ON 31-01-2002 AND THE SAME WAS CONCLUDED ON 04-02- 2002 AND THEREFORE, THE STATEMENT OF THE ASSESSEE W AS RECORDED ON 04-02- 2002 AND HENCE, THIS STATEMENT DATED 04-02-2002 IS STATEMENT IN COURSE OF SURVEY AND NOT AFTER SURVEY. HE SUBMITTED THAT IN THE IMPUGNED TRIBUNAL ORDER, THE TRIBUNAL HAS ALSO RECORDED AT THREE PLAC ES THAT THE STATEMENT WAS RECORDED IN COURSE OF SURVEY BUT AT OTHER PLACES, T HE TRIBUNAL HAS STATED THAT THE STATEMENT DATED 04-02-2002 WAS AFTER THE DATE O F SURVEY AND HENCE, THESE FINDINGS OF THE TRIBUNAL ARE CONTRADICTORY. 4. THE SECOND ALLEGED MISTAKE IS THAT THE TRIBUNAL HAS RELIED UPON A NUMBER OF AUTHORITIES INCLUDING AN UNREPORTED DECIS ION ON PAGE 17 OF THE TRIBUNAL ORDER AND ALSO ON A QUOTATION FROM A BOOK ON ADMINISTRATIVE LAW AND THE EVIDENCE ACT WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. THEREFORE, IT IS FAILURE OF NATURAL JUSTICE. THE T HIRD MISTAKE ALLEGED IS THAT TRIBUNAL HAS TOTALLY IGNORED THE CBDT CIRCULAR DATE D 10-03-2003. 5. REGARDING THE FIRST ALLEGED MISTAKE THAT ONLY ON E STATEMENT WAS RECORDED ON 04-02-2002 AND THAT STATEMENT WAS IN CO URSE OF SURVEY, WE FIND THAT ON PAGE NO. 2 AND 3 OF THE ASSESSMENT ORDER, IT IS OBSERVED BY THE A.O. THAT THE SURVEY UNDER SECTION 133A OF THE IT ACT WA S CARRIED ON 31-01-2002 AND DURING THE COURSE OF SURVEY, THE STATEMENT OF T HE ASSESSEE WAS RECORDED ON OATH AND IN THE SAID STATEMENT, IT WAS STATED BY THE ASSESSEE IN REPLY TO A QUESTION THAT HER HUSBAND HAS HANDLED SALES AND PUR CHASES AND THE ASSESSEE M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 5 IS NOT HAVING KNOWLEDGE OF THE STOCK IN TRADE. TH EREAFTER, IT IS FURTHER NOTED BY THE AO THAT IN ANOTHER STATEMENT ON OATH OF THE ASSESSEE WAS RECORDED ON DATED 04-02-2002 WHEREIN THE ASSESSEE HAS GIVEN THE WORKING OF THE CLOSING STOCK AS PER BOOKS AND ACCOUNT ON THE DATE OF SURV EY AT. RS. 4,99,032/- AND ON THE DATE OF SURVEY, PHYSICAL STOCK WORKED OUT AT RS. 25,08,860/- AND THEREFORE, THERE IS EXCESSIVE PHYSICAL STOCK FOUND OF RS. 20,09,828/- AND WHEN THE ASSESSEE WAS ASKED TO EXPLAIN ABOUT THE DI FFERENCE, THE ASSESSEE OFFERED THE DIFFERENCE AS CURRENT YEARS INCOME. F ROM THESE OBSERVATIONS OF THE AO IN ASSESSMENT ORDER, IT IS CLEAR THAT AS PER THE AO ALSO, TWO STATEMENTS WERE RECORDED ONE ON THE DATE OF SURVEY I.E. 31-01-2002 AND SECOND WAS RECORDED SUBSEQUENTLY ON 04-02-2002. TH E TRIBUNAL HAS ALSO PROCEEDED ON SIMILAR LINE AND HENCE, EVEN IF THERE IS A MISTAKE ON THIS ASPECT, THE SAME IS IN THE ASSESSMENT ORDER AND NOT IN THE IMPUGNED TRIBUNAL ORDER. NOTHING IS BROUGHT ON RECORD BY THE ASSESSEE BEFORE US TO SHOW THAT ANY APPLICATION UNDER SECTION 154 WAS FILED BEFORE THE AO FOR RECTIFYING ANY MISTAKE IN THE ASSESSMENT ORDER DATED 28-02-2005. IMPUGNED TRIBUNAL ORDER IS DATED 31-03-2011 AND HENCE ANY RECTIFICATION U/S 154 WAS TIME BARRED. HENCE, THIS ALLEGED MISTAKE IN THE TRIBUNAL ORDER I S UNSUBSTANTIATED AND THEREFORE, THIS ALLEGATION IS REJECTED. 6. WE WOULD ALSO LIKE TO OBSERVE THAT EVEN AS PER T HE BOARDS CIRCULAR CITED BY THE ASSESSEE I.E. CIRCULAR NO. 286/2/2003 DATED 10-03-2003, IT WAS DIRECTED BY THE BOARD TO THE INCOME TAX AUTHORITY T HAT NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION IN COURSE OF SEARCH AND S URVEY OPERATION. IT WAS ALSO DIRECTED THAT IN RESPECT OF PENDING ASSESSMENT PROCEEDINGS ALSO, THE AO SHOULD RELY ON EVIDENCES OR THE MATERIALS GATHERED DURING THE COURSE OF SURVEY/SEARCH OPERATIONS OR GATHERED THEREAFTER WHI LE FRAMING THE M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 6 ASSESSMENT ORDERS. IN OUR HUMBLE OPINION, THE MEAN ING OF THE CIRCULAR IS THIS THAT NO ADDITION SHOULD BE MADE MERELY ON THE BASIS OF THE STATEMENT IN COURSE OF SEARCH/SURVEY. IN THE PRESENT CASE, WE F IND THAT THE BASIS OF ADDITION BY THE AO AND THE CONFIRMATION BY THE CIT( A) IS NOT ONLY ON THE BASIS OF STATEMENT BUT ALSO ON THE BASIS OF MATERIA L FOUND IN COURSE OF SURVEY PHYSICAL STOCK ON THE DATE OF SURVEY WAS RS. 25,08 ,860/- WHEREAS BOOKS STOCKS ON THAT DATE WAS ONLY OF RS. 4,99,032/-. TH E ASSESSEE HAS FILED A PAPER BOOK OF 22 PAGES IN COURSE OF HEARING OF THE APPEAL AND IN THAT PAPER BOOK, ON PAGE NO. 05, THE ASSESSEE HAS SUBMITTED TH E WORKING OF CLOSING STOCK AS ON 31-12-2002 I.E. ON DATE OF SURVEY AND A S ON 31-03-2002 I.E. DATE OF YEAR END AND AS PER THIS STATEMENT, CLOSING STOC K ON 31-01-2002 WAS SHOWN AT 25,08,860/- AND THAT HAS BEEN TAKEN AS OP ENING STOCK ON 01-02- 2002 FOR WORKING OUT THE CLOSING STOCK AS ON 31-0 3-2002. HENCE, AS PER THIS WORKING FROM PAPER BOOK, THE VALUE OF CLOSING STOCK ON THE DATE OF SURVEY IS NOT DISPUTED AND IN FACT ACCEPTED BY THE ASSESSEE. ON PAGE 10, ONE MORE WORKING IS GIVEN AS PER WHICH, VALUE OF CLOSIN G STOCK AS ON 31-01-2002 HAS BEEN WORKED OUT. BY POINTING OUT CERTAIN MISTA KES IN FOUR ITEMS, TOTAL OF WHICH IS WORKED AT 1,44,830/-. IT IS ALSO SEEN THA T NOT ONLY INCOME WAS OFFERED IN THE STATEMENT RECORDED ON 04-02-2002, BU T THE ASSESSEE PAID TAX ALSO AS PER SUCH ADMISSION IN THE STATEMENT AND THI S IS ANOTHER ADMISSION OF THIS FACT THAT THE ASSESSEE HAD ADMITTED THE UNDISC LOSED INCOME. MOREOVER, IT IS ALSO NOTED BY THE TRIBUNAL IN PARA 1.5 OF THE TR IBUNAL ORDER THAT EVEN IN THE LETTER DATED 04-02-2005 ALSO, WRITTEN BY THE AS SESSEE TO THE AO IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ADMITTED UN ACCOUNTED INCOME. THIS LETTER DATED 04-02-2005 BY THE ASSESSEE TO THE A.O. IS AVAILABLE ON PAGE 6 OF THE PAPER BOOK FILED BY THE ASSESSEE IN COURSE OF H EARING BEFORE THE TRIBUNAL IN WHICH REFERENCE HAS BEEN MADE TO ANOTHER LETTER WRITTEN BY THE ASSESSEE TO M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 7 THE AO ON 28-03-2002. THIS GOES TO SHOW THAT THE A SSESSEE HAS ADMITTED THIS EXTRA INCOME DECLARED IN COURSE OF SURVEY ON V ARIOUS OCCASIONS AND IN ADDITION TO THE STATEMENT OF THE ASSESSEE, THERE IS MATERIAL BROUGHT ON RECORD BY WAY OF SURVEY THAT EXCESS PHYSICAL STOCK WAS FOU ND IN COURSE OF SURVEY AND THEREFORE, THE ADDITION IS NOT MADE MERELY ON T HE BASIS OF STATEMENT. 7. REGARDING SECOND MISTAKE POINTED OUT IN THIS M.A., THAT RELIANCE WAS PLACED BY THE TRIBUNAL ON A NUMBER OF AUTHORITI ES INCLUDING UNREPORTED DECISIONS AND QUOTATION FROM BOOKS ON ADMINISTRATIV E LAW AND EVIDENCE ACT WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE AND THEREFORE, THERE IS VIOLATION OF NATURAL JUSTICE, WE WOULD LIKE TO OBSE RVE THAT IT IS NOTED BY THE TRIBUNAL IN 5.11 ON PAGE NO. 17 OF THE IMPUGNED OR DER THAT THE STATEMENT OF THE ASSESSEE IS COUPLED WITH FACT THAT NOT AN IOTA OF EVIDENCE HAS BEEN PLACED BEFORE THE TRIBUNAL SO AS TO ENABLE THE TRIBUNAL T O TAKE A DIFFERENT VIEW IN THE MATTER. IT IS ALSO OBSERVED THAT, IN THE ABSEN CE OF ANY BASIS, THE TRIBUNAL HAS NO HESITATION IN UPHOLDING THE FINDINGS OF THE LD. CIT(A) AND THIS VIEW OF THE TRIBUNAL FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN SANJEEV KUMAR PANDHI VS. CIT, 305 ITR 128 (PB) AS ALSO ANOT HER DECISION ON 21-01- 2011 ACIT VS RATAN INDUSTRIES IN ITA NO. 95//AGRA// 2005. THIS SHOWS THAT RELIANCE WAS NOT PLACED ON THESE TRIBUNAL DECISIONS FOR COMING TO THE CONCLUSION BUT MERELY THIS WAS STATED BY THE TRIBUN AL THAT THE VIEW TAKEN IS SUPPORTED BY THESE TWO TRIBUNALS DECISIONS ALSO. SINCE THE DECISION ITSELF IS NOT BASED ON THESE TRIBUNAL DECISIONS, THIS OBJECTI ON ALSO, HAS NO MEANING AND RELEVANCE. SIMILARLY, THE BOOK ON ADMINISTRATI VE LAW AND EVIDENCE ACT ETC WERE ALSO NOT THE BASIS OF REACHING TO THE CONC LUSION BY THE TRIBUNAL AND THEREFORE, THE OBJECTION OF THOSE COUNTS ARE ALSO N OT RELEVANT AND VALID. M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 8 8. IN VIEW OF ABOVE DISCUSSION, WE DO NOT FIND A NY MERIT IN VARIOUS ALLEGED MISTAKES POINTED OUT BY THE ASSESSEE IN THIS MA AND ALL OBJECTIONS ARE REJECTED. 9. IN THE RESULT MA OF THE ASSESSEE IS DISMISSED. SD./- SD./- (MUKUL KR. SHRAWAT) (A.K.GARODIA) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD : DATED 23 /11/2012 A.KUMAR, P.S./SP. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE BY ORDER/ , ( / ' ) ! , '# * M.A. NO. 114/AHD/2012, A.Y.:- 2002-03 PAGE DAXABEN KIRITBHAI THAKKAR VS. ITO 9 STRENGTHENED PREPARATION & DELIVERY OF ORDERS IN TH E ITAT 1) DATE OF TAKING DICTATION 07.11.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE N.A. 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 07.11.2012 4) DATE OF CORRECTION 08.11.2012 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 23.11.2012 7) ORDER UPLOADED ON 23.11.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 23.11.2012