N.Easwaran, Tiruppur V. ITO, Tiruppur

MA 339/CHNY/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5659 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SASI KUMAR
• Assessee Lawyers: R KUMAR
• Section: 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , !',$ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER '' / M.P. NO.339/MDS/2016 (IN I.T.A. NO.2117/MDS/2016) ( )( / ASSESSMENT YEAR : 2012-13 SHRI N. EASWARAN, NO.400/1A, CHETTIPALAYAM ROAD, GANAPATHY NAGAR, PALLADAM, TIRUPUR 641 664. PAN : AAGPE 4276 L V. THE INCOME TAX OFFICER, WARD 2(2), TIRUPUR. (+,( /PETITIONER) (+-,./ RESPONDENT) +,( 0 1 /PETITIONER BY : SHRI R. KUMAR, ADVOCATE +-,. 0 1 / RESPONDENT BY : SHRI A. SASIKUMAR, JCIT 2 0 3$ / DATE OF HEARING : 16.06.2017 4!) 0 3$ / DATE OF PRONOUNCEMENT : 29.06.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS PETITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER O F THIS TRIBUNAL. 2. SHRI R. KUMAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE MAIN CONTENTION OF THE ASSESSEE BEFORE THI S TRIBUNAL DURING THE HEARING OF APPEAL IS THAT THE STATEMENT RECORDE D UNDER SECTION 2 M.P. NO.339/MDS/16 133A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT ') AT THE TIME OF SURVEY OPERATION CANNOT BE A BASIS FOR MAKING ANY A DDITION AS HELD BY MADRAS HIGH COURT IN CIT V. S. KHADER KHAN SON ( 2008) 300 ITR 157. THE CBDT ALSO CLARIFIED THAT THE REVENUE AUTH ORITIES SHALL ENDEAVOUR TO COLLECT MATERIAL DURING THE COURSE OF SEARCH OR SURVEY OPERATION AND THEY SHALL NOT TRY TO RECORD ANY CONF ESSION STATEMENT FROM THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, C ONTRARY TO THE INSTRUCTION OF CBDT, A STATEMENT WAS RECORDED DURIN G THE COURSE OF SURVEY OPERATION. ON THE BASIS OF THE STATEMENT RE CORDED, THE ASSESSING OFFICER DETERMINED THE GROSS PROFIT. THE REFORE, ACCORDING TO THE LD. COUNSEL, THE ORDER OF THIS TRIBUNAL CONF IRMING THE ORDER OF THE ASSESSING OFFICER IS NOT JUSTIFIED. MOREOVER, THIS TRIBUNAL PLACED RELIANCE ON THE JUDGMENT OF BOMBAY HIGH COUR T IN DR. DINESH JAIN V. INCOME TAX OFFICER (2014) 45 TAXMANN .COM 442 WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. TH EREFORE, IN VIEW OF JUDGMENT OF BOMBAY HIGH COURT IN INVENTURE GROWT H & SECURITIES LTD. V. ITAT (2010) 195 TAXMAN 195, THE TRIBUNAL CA NNOT PLACE RELIANCE ON THE JUDGMENT OF BOMBAY HIGH COURT IN DR . DINESH JAIN (SUPRA). 3. ON THE CONTRARY, SHRI A. SASIKUMAR, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THERE WAS A SURVEY O PERATION IN THE 3 M.P. NO.339/MDS/16 PREMISES OF THE ASSESSEE. THE ASSESSEE MADE BUSINE SS TRANSACTIONS TO THE EXTENT OF ` 71,01,51,520/- FROM 01.04.2008 TO 31.03.2014. THIS TURNOVER OF ` 71,01,51,520/- WAS NOT DISCLOSED BY THE ASSESSEE IN THE BOOKS MAINTAINED IN THE REGULAR COURSE. DURING THE COURSE OF SURVEY OPERATION, THE ASSESSEE WAS CO NFRONTED WITH THE TRANSACTIONS FOUND AND THE ASSESSEE ADMITTED TH AT THERE WAS TRANSACTION WHICH WAS NOT BROUGHT IN THE BOOKS AND ADMITTEDLY UNDISCLOSED THE INCOME OF ` 3,76,40,025/-. THEREFORE, ACCORDING TO THE LD. D.R., IT IS NOT PLACING RELIANCE ON THE STA TEMENT MADE BY THE ASSESSEE. THE ASSESSING OFFICER PLACED RELIANCE ON THE MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION WHICH W AS FURTHER CLARIFIED BY THE ASSESSEE. HENCE, EVEN WITHOUT THE AID OF JUDGMENT OF BOMBAY HIGH COURT IN DR. DINESH JAIN (SUPRA), TH E TRIBUNAL COULD HAVE COME TO THE SAME CONCLUSION. 4. BY WAY OF REJOINDER, SHRI R. KUMAR, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT NO DOUBT, THERE WAS UNDISC LOSED TRANSACTION TO THE EXTENT OF ` 71,01,51,520/-. HOWEVER, THERE WAS NO MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATIO N WITH REGARD TO GROSS PROFIT AND NET PROFIT. FOR THE PURPOSE OF DE TERMINING GROSS PROFIT AND NET PROFIT, THE ASSESSING OFFICER PLACED RELIANCE ONLY ON THE STATEMENT RECORDED DURING THE COURSE OF SURVEY OPERATION. 4 M.P. NO.339/MDS/16 THEREFORE, DETERMINATION OF PROFIT ON THE BASIS OF STATEMENT MADE DURING THE COURSE OF SURVEY OPERATION, CANNOT STAND IN THE EYE OF LAW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE SALES TURNOVER FROM 01.04.2008 TO 31.03.2014 WAS TRANSACTED THROUGH BANK ACCOUNT IN IDBI, TIRUPUR TO THE EXTENT OF ` 71,01,51,520/-. WHILE CONFRONTING THE BANK TRANSAC TION FOUND DURING THE COURSE OF SURVEY OPERATION, THE ASSESSEE AFTER GOING THROUGH THE WORKING OF NET PROFIT MADE BY THE SEARC H TEAM, AGREED THAT THERE WAS UNDISCLOSED INCOME OF ` 3,76,40,025/-. THEREFORE, IT IS NOT A CASE OF PLACING RELIANCE ON THE STATEMENT MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY OPERATION. IT IS A CASE OF PLACING RELIANCE ON THE TRANSACTION MADE BY THE ASS ESSEE WHICH WAS MADE OUTSIDE THE BOOKS OF ACCOUNT. THE TRANSAC TION MADE THROUGH IDBI, TIRUPUR WAS FOUND DURING THE COURSE O F SURVEY OPERATION. THEREFORE, NATURALLY THE ASSESSEE HAS T O EXPLAIN THE TRANSACTION. 6. WHEN THE REVENUE AUTHORITIES BROUGHT TO THE NOTI CE OF THE ASSESSEE ABOUT THE TRANSACTION, HE AGREED THE UNDIS CLOSED INCOME OF ` 3,76,40,025/-. THE PROFIT ADOPTED / ESTIMATED (ON THE ADMITTED 5 M.P. NO.339/MDS/16 UNDISCLOSED TURNOVER) IS LOWER THAN THE GROSS PROFI T DISCLOSED BY THE ASSESSEE (ON HIS DISCLOSED TURNOVER), WITH NO EVIDE NCE OF INCURRING ANY OTHER OUT-OF-BOOKS EXPENDITURE. THEREFORE, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF MADRAS HIGH COURT IN S. KHADER KHAN SON (SUPRA) MAY NOT BE APPLICABLE TO TH E FACTS OF THE CASE. HAD THE ASSESSING OFFICER PLACED RELIANCE ON LY ON THE STATEMENT RECORDED DURING THE COURSE OF SURVEY OPER ATION, THEN THE MATTER WOULD STAND DIFFERENTLY. IN THIS CASE, THE MATERIAL EVIDENCE IN THE FORM OF TRANSACTION MADE BY THE ASSESSEE THROUG H BANKING CHANNEL WAS THE BASIS FOR MAKING ADDITION. THEREFO RE, THERE IS NO ERROR IN THE ORDER OF THIS TRIBUNAL MUCH LESS PRIMA FACIE ERROR. THIS TRIBUNAL, EVEN THOUGH REFERRED TO THE JUDGMENT OF B OMBAY HIGH COURT IN DR. DINESH JAIN (SUPRA), HAS COMPLETELY PL ACED ITS RELIANCE ON THE UNACCOUNTED TURNOVER UNEARTHED DURING THE CO URSE OF SURVEY OPERATION. THIS TRIBUNAL DECIDED THE ISSUE ON THE BASIS OF MATERIAL EVIDENCE FOUND DURING THE COURSE OF SURVEY OPERATIO N. A MERE REFERENCE TO JUDGMENT OF BOMBAY HIGH COURT CANNOT B E A REASON TO HOLD THAT THERE IS AN ERROR IN THE ORDER OF THIS TR IBUNAL. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FIND ANY MERIT IN THE M ISCELLANEOUS PETITION FILED BY THE ASSESSEE. 6 M.P. NO.339/MDS/16 6. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED COURT ON 29 TH JUNE, 2017 AT CHENNAI. SD/- SD/- ( !' ) ( ... ) (SANJAY ARORA) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 29 TH JUNE, 2017. KRI. 0 +37' 8')3 /COPY TO: 1. +,( / PETITIONER 2. +-,. /RESPONDENT 3. 2 93 () /CIT(A) 4. 2 93 /CIT 5. ': +3 /DR 6. ;( < /GF.