AMIT KUMAR GUPTA, ALLAHABAD V. ACIT CIRCLE-1, ALLAHABAD

MA 6/ALLD/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3306 (ITAT-ALLAHABAD)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-07-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 06-12-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Valuation report; Set aside
• Section: 131; 69; 133A; 250; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER Miscellaneous Application (M.A.) No. 06/ALLD/2021 Arising out of ITA No.40/ALLD/2020 AY.2015-16 Amit Kumar Gupta, 137/107, Meerganj Chowk Allahabad Uttar Pradesh PAN-AGPPG6256M v. ACIT, Circle-I, Allahabad, U.P. (Appellant) (Respondent) Assessee by: Sh. Pankaj Shrivastava, Adv Department by: Sh. A.K. Singh, Sr. D.R. Date of hearing: 29.07.2022 Date of pronouncement: 05.08.2022 O R D E R SHRI VIJAY PAL RAO, JUDICIAL MEMBER: By way of this misc. application, the assessee is seeking rectification of mistake and recalling of the order dated 01 st September, 2021 of this Tribunal whereby the cross appeals and Cross Objection of the assessee were disposed of ex parte. 2. The assessee has alleged that the cross appeals and cross objection of the assessee were decided by the Tribunal without providing a single opportunity of being heard to which assessee has been debarred from justice without any fault on his part. It is further contended that the assessee filed the paper book containing all the relevant record regarding purchase and sales as well as sales tax orders accepting the purchase and sale of the assessee. Hence, it is pleaded that the ex parte decision dated 1 st September, 2021 of the Tribunal may be recalled and an opportunity to the assessee to represent his case may be given. The learned AR of the assessee has M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 2 further reiterated the averments made in the misc. application and stressed upon that the Sales Tax Department has accepted the purchase and sales of the assessee and assessee has paid the tax. Though, he has prayed that the misc. application filed by the assessee may be allowed and impugned order be recalled for granting a fresh opportunity of hearing to the assessee. 3. On the other hand, learned DR has submitted that the Tribunal has given a finding on the merits and remanded the matter to the Assessing Officer to verify the evidence which is relied upon by the assessee as the CIT(A) has not called for a remand report from the Assessing Officer on the evidence which was first produced before the CIT(A). He has further contended that the Sales Tax Department accepted the purchase and sale of the department but that does not mean that there was no out of books purchase or sales. Thus, the learned DR has submitted that there is no apparent mistake in the impugned order and consequently the misc. application is not maintainable. 4. We have considered the rival submissions as well as relevant material on record. The Tribunal has recorded the facts regarding non-appearance of the assessee despite repeated notices were issued to the assessee through all modes including the email sent to the assessee at the email ID given in the Form No. 36. These facts are recorded by the Tribunal in para 1 as under:- “None has appeared on behalf of the assessee when these appeals and cross objection were called for hearing. It transpires from record that right from the beginning, nobody is appearing on behalf of the assessee though on some occasion, the assessee has filed the application for adjournment of the hearing. Repeated notices were issued to the assessee through all modes including the email sent to the assessee at the email ID given by the assessee in the Form No. 36 but the assessee has not responded to the notices issued by the Tribunal. Accordingly, we propose to hear and dispose of these cross appeals and cross objection ex parte.” M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 3 5. Thus, in view of the facts recorded by the Tribunal at the time of taking up the matter for ex parte hearing and disposal negates the allegation of the assessee that no opportunity was given to the assessee before passing the impugned order. Further, as regards, the other contentions and mistakes pointed out by the assessee in the misc. application for non consideration of the relevant record, it is noted that the Tribunal has decided these appeals and cross objection on the point of the violation of principles of natural justice by the CIT(A) as well as the finding of CIT(A) is contrary to the material on record. The relevant finding of the Tribunal in para 4 to 8 are as under:- “4. We have considered the submissions of the learned DR as well as relevant material on record. During the survey under section 133A of the Act carried out on 20.02.2015 at the business premises of M/s Swarn Ganga Jewellers, 137, Meerganj, Allahabad undisclosed stock of Gold and Silver Jewellery was found. The Gold Jewellery of 28 Kg 7.57 gm and Silver Jewellery of 38Kg 874 Gms was found in excess of the books of accounts. These quantity of undisclosed stock was accepted by one Sh. Deepak Gupta, the brother of the assessee in his statement recorded during the survey. Thereafter the assessee in his statement recorded under section 131 of the Income Tax Act during the post survey enquiry accepted this quantity of Gold and Silver Jewellery found during the survey but he has explained the Gold Jewellery to the tune of 18 Kg 45 gms amounting to Rs. 3,94,50,903/- being purchased by the assessee vide four bills dated 19.02.20215 of M/s Pushpa Enterprises, Agra. Therefore, the assessee claimed that out of the total undisclosed stock of Gold Jewellery of 27 kg 757 gms 18 kg 45 gms is the purchases made by the assessee vide these invoices which were not considered by the department at the time of survey. The assessee though accepted the remaining undisclosed Jewellery of Gold to the tune of 10 Kg 517 Gms but he has explained the valuation of the same should be considered after adjusting the impurity in the Jewellery. Similarly, the assessee also accepted the Silver Jewellery of 139 Kg 724 Gms as undisclosed but the valuation of the same was also claimed to be done after adjustment of the impurity in the Jewellery. The statement of the assessee under section 131 was recorded on 24.02.2015. Thereafter, the assessee filed a return of income wherein the assessee declared income to the extent of Rs. 1,70,82,009/- on account of undisclosed stock by reducing the value of the undisclosed Gold Jewellery of 18 Kg 45 Gms amounting to Rs. 3,94,50,903/- in view of the four invoices issued by the M/s Pushpa Enterprises, Agra. The Assessing Officer in the assessment proceedings has rejected the explanation of the assessee of purchases made vide alleged four invoices of Pushpa Enterprises, Agra and consequently made an addition of Rs. 3,94,50,903/-. Apart from this, the M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 4 Assessing Officer also made addition in respect of the remaining Gold and Silver Jewellery at a differential amount of Rs. 1,62,73,339/- as the assessee has disclosed the income on account of undisclosed stock only at Rs. 1,70,80,009/-. 5. The CIT(A) while deleting the addition of Rs. 3,94,50,903/- has accepted the explanation of the assessee based on these four bills issued by M/s Pushpa Enterprises, Agra and also held that there is no incriminating material found during the course of survey. The relevant part of the finding of the CIT(A) at page 25 of the impugned order is as under:- “I have perused the order of the A.O. facts of the case and arguments given by appellant. Appellant is an individual engaged in business of purchase and sale of silver and gold ornaments in the name of style of M/s Swarn Ganga jewellers for last number of year. He is maintaining regular books of accounts, which are duly audited for last number of years. It is a fact that no incriminating material was found during the course of survey. Initial statement of appellant was not recorded by the survey party as the appellant was not there. Valuation report prepared by the approved valuer M/s. Pankaj Jewel Art, creation of found silver and gold items, was objected by the appellant, about the value of purity being used for valuing all the items found. These protests and objections made by the appellant’s brother were ignored by the AO and the valuer. No signatures of the appellant could be obtained on such valuation report and as submitted no copy of the valuation report was provided to the appellant by the surveying party.” 6. In our view, this finding of the CIT(A) is contrary to the facts as detected during the course of survey. It is pertinent to note that when the excess stock of Gold and Silver Jewellery was found during the course of survey proceedings which was acknowledged and accepted by the assessee in the statement recorded under section 133a of the Act as well as under section 131 of the Income Tax Act in the post survey proceedings then the undisputed quantity of undisclosed stock coupled with the statements of the assessee would constitute a tangible material which will be regarded as incriminating material for the purpose of assessment based on the facts and excess stock found during the survey. The quantity of stock found during the survey was never disputed by the assessee though the assessee claimed a part of it as not undisclosed. Hence when the assessee has not quantity of the stock found during the survey then the said quantity of the stock itself would constitute incriminating material as it was not recorded in the books of accounts of the assessee. The subsequent bills / invoices produced by the assessee without making the payment of purchases to the extent of Rs. 3,94,50,903/- is always a subject matter of verification and enquiry. Therefore, this finding of the CIT(A) is not sustainable and the same is set aside. Similarly, the CIT(A) while passing the order decided the issue of the remaining Jewellery after reducing the amount of 18Kg.45 Gms Gold allegedly purchased from M/s Pushpa Enterprises, Agra. The CIT(A) has not given a conclusive finding but the issue is set aside to the record of the Assessing Officer and that too with a direction M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 5 to consider the various facts which were explained by the assessee during the appellate proceedings. The CIT(A) has passed the impugned order by accepting the evidences as well as the explanation of the assessee without calling a remand report from AO. The relevant part of the finding of the CIT(A) on this second issue is as under:- “It is seen from the assessment order that AO has given the credit to the appellant of the stock disclosed in his capital account of gold jewellery at Rs.1,50,23,344/- and of Silver jewellery at Rs. 20,58,665/- aggregating to Rs. 1,70,82,009/- and added the difference amount of Rs. 1,62,73,339/- (3,33,55,348-1,70,82,009) on account of undisclosed stock u/s 69 of the I.T. Act, 1961. Appellant has brought on records a plea in his submission that Gold of 3478 kg 520 gms and silver 38 kg 790 gm was received by him on family partition that was left out while making the statement. Same is being ignored as not related to these grounds of appeal. It seems that this gold of 3478 kg 520 gms and silver of 38 kg 790 gms was received by him on family partition and is not the amount of undisclosed stock of gold jewellery weighing 10.517 kgs and silver ornaments weighing 139.724 kgs worked out on the basis of the valuation report of the registered valuer totaling to Rs, 3,33,55,348/- on the date of survey. AO is directed to consider these facts while giving effect to this appellate order and take any action as per law, if needed.” 7. While giving the direction to Assessing Officer to verify and decide the issue as per law amounts to remand the matter to the record of the Assessing Officer which is beyond the jurisdiction of the CIT(A) as per the provisions of section 250 of the Income Tax Act. Accordingly, the impugned order of the CIT(A) is not sustainable and the same is liable to be set aside. 8. Hence, in the facts and circumstances of the case, when the CIT(A) has passed the impugned order without calling a remand report from the Assessing Officer and even giving a finding that there is no incriminating material found during the course of survey which is contrary to the undisputed facts and material on record is not sustainable in law and liable to be set aside. We order accordingly. The Assessing Officer is directed to re-adjudicate these issues after proper verification and examination of record and particularly the genuineness of the transaction of the alleged purchases made by the assessee from M/s Pushpa Enterprises, Agra by considering the status of payment of the said amount by the assessee. Needless to say the assessee be given an appropriate opportunity of hearing before passing the fresh order.” 6. Thus, the Tribunal has taken note of the record, facts and material and found that during the course of survey under section 133A of the Act carried out at the business premises of Ms. Swarn Ganga Jewellers, undisclosed stock and jewellery was found which was in excess of the stock recorded in the books of accounts. Further, the assessee in the statement recorded under section 131 also accepted certain quantity M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 6 of the gold and jewellery as undisclosed, whereas the CIT(A) accepted the explanation of the assessee based on the four bills produced by the assessee. It is evident from record that the Assessing Officer was not given the opportunity to comment by calling for a remand report on the evidence which was produced before the CIT(A) and was directed to consider the same and decide the issue as per law which was found to be contrary to the provisions of section 250 and beyond the jurisdiction of the CIT(A). Accordingly, in those facts and circumstances, the Tribunal remanded the matter to the record of the Assessing Officer for re-adjudication of the same after considering proper verification and examination of record and particularly the genuineness of the transaction of the alleged purchases made by the assessee from M/s Pushpa Enterprises, Agra. Therefore, the Tribunal has not given any finding on merits so as to point out any mistake for not considering the material / documents filed in the paper book. Since, those records were not subjected to verification of the Assessing Officer therefore, the matter was remanded to the record of the Assessing Officer. Now, the assessee is taking a fresh plea in the proceedings under section 254(2) regarding the orders passed by the Sales Tax Department which cannot be considered in these proceedings as the jurisdiction of the Tribunal under section 254(2) is very limited and circumscribed. The assessee is free to produce all the relevant documents before the Assessing Officer in the remand assessment proceedings for verification and examination. Accordingly, we do not find any substance or merit in the misc. application filed by the assessee. The same deserves dismissal. 7. In the result, the misc. application filed by the assessee is dismissed. Order pronounced in the open Court on 05.08.2022. Sd/- Sd/- RAMIT KOCHAR VIJAY PAL RAO (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Dated: 05.08.2022 Sh M.A. No. 06/ALLD/2021 In ITA No.40/ALLD/2020 Amit Kumar Gupta 7 Copy forwarded to: 1. Appellant – Amit Kumar Gupta 2. Respondent –ACIT, Circle-I, Allahabad 3. CIT(A), Allahabad 4. CIT- 5. DR - By order Sr. P.S.