SH. CHATTAR SINGH TOMAR,PAONTA SAHIB V. ITO , NAHAN

ITA 51/CHANDI/2008

AI Insights

The case involves multiple appeals by Shri Chattar Singh Tomar against the orders of the Income Tax Officer, Nahan, concerning the assessment years 2002-03 to 2004-05. The primary issues revolved around the sale price of limestone, income from trucks, commission income from mining, and the estimation of agricultural income and unexplained bank deposits. The Tribunal's earlier decisions were challenged, leading to a re-examination of the evidence and subsequent partial relief granted to the assessee. The Tribunal found that certain mistakes apparent on record needed correction, particularly concerning the sale rates of different varieties of limestone and the non-adjudication of specific grounds related to agricultural income and unexplained bank deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360922 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2002-2003
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROHIT SHARMA LD
• Assessee Lawyers: AJAY DHIMAN LD
• Keywords: Business income; Document seized; Documents seized

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHANDIGARH BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकरअपील सं. / ITA No. 51/CHANDI/2008 (िनधाŊरणवषŊ / Assessment Year: 2002-03) & 2. आयकरअपील सं. / ITA No. 52/CHANDI/2008 (िनधाŊरणवषŊ / Assessment Year: 2003-04) & 3. आयकरअपील सं. / ITA No. 53/CHANDI/2008 (िनधाŊरणवषŊ / Assessment Year: 2004-05) Shri Chattar Singh Tomar (Rep. by LH Shri Raghubir Singh) VPO Kamrao, Tehsil Paonta Sahib, HP बनाम/ Vs. ITO Nahan ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ABAPT-2391-Q (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Ajay Dhiman (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Shri Rohit Sharma (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 04-03-2025 घोषणाकीतारीख /Date of Pronouncement : 23-05-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals are recalled matters. From the case records, it emerges that the assessee’s appeals for Assessment Years (AY) 1999-2000 to 2004-05 were disposed-off by Tribunal vide ITA Nos.48 to 53/Chandi/2008 common order dated 07-07-2008. The assessee 2 preferred Misc. applications for AYs 2002-03 to 2004-05 which were rejected vide orders dated 24-05-2013 & 04-01-2016. Pursuant to the directions of Hon’ble Punjab & Haryana High Court, the MAs stood disposed-off partly in favor of the assessee vide MA Nos.185 to 187/Chd/2008 common order dated 28-05-2018. Upon perusal of this order, it could be seen that the assessee was engaged in extracting mines and sale of lime stone. The assessee was subjected to search which led to assessments u/s 153A. The bench partly allowed the MAs of the assessee as follows: - 4. The first addition was relating to the sale price of the different varieties of the lime stone sold by the assessee during these years. The dispute was relating to the sale rate of different varieties of the lime stone and consequent working of profit. As per the seized documents, the sale rate of Rs. 240/- per MT for assessment year was applied by the Assessing officer for assessment year 2004-05. The Assessing officer collected information about the sale rate of lime stone from the persons involved in mining, which according to the Assessing officer were much higher than the sale rate declared by the assessee. The assessee, on the other hand, relied on the bills issued by him which indicated the sale rate of lime stone at Rs. 100/- per MT and other varieties at Rs. 80/- per MT. The Tribunal considering the rival contentions directed that so far as assessment year 2004-05 was concerned, the rate of Rs. 240/- adopted by the Assessing officer for sale of lime stone which was based on the seized documents was most reliable information and, accordingly, confirmed the sale rate of Rs. 240/- per MT of lime stone for assessment year 2004-05. The Tribunal further observed that there were no separate details of different varieties sold in the year 2004-05. The Tribunal, therefore, observed that it appeared that the assessee had sold only one variety of lime stone during the assessment year 2004-05 and, hence, confirmed the rate of Rs. 240/- per MT for assessment year 2004-05. However, it was also directed that if the assessee as per information collected from Mining Department had sold different varieties of lime stone such as dolomite, bhatta and kachri, the Assessing officer should apply sale rate of such variety as applied by the Assessing officer for assessment years 2002-2003 and 2003- 04. However, the Tribunal in the subsequent part of the order itself worked out the sale rate of different varieties of lime stone for the assessment years 1990-2000 to assessment year 2004-05 In the present application, the assessee has pleaded that while arriving at the above findings, the Tribunal has ignored the bills placed at pages 2 - 13 and 58 - 69 of the paper book dated 27.2.2008 and, therefore, has pleaded that a mistake apparent on record has occurred in arriving at the findings on this issue. 3 5. The next issue regarding which the assessee has pleaded that a mistake has occurred in the order is regarding the income from trucks. As per the assessee, the assessee was the owner of four trucks. Further, the assessee had disclosed income of Rs.48,000/- only as truck income for assessment year 1999-2000. However, the Assessing officer estimated the income of four trucks at Rs.96,000/-. The plea of the assessee was that three trucks were sold during the year under consideration, however, the claim of the assessee was not accepted for want of reliable evidence as the registration of the trucks continued to be in the name of the assessee. It was contended before the Tribunal that out of the four trucks, two trucks were owned by the HUF upon 29.10.2000. The Tribunal accordingly directed that in case of ownership of trucks by HUF is established, the Assessing officer will exclude the income of such trucks from the assessment of the assessee for the relevant assessment year and further directed that the above decision in regard to truck income will apply to other years also. In the application of rectification of the order, the assessee has pleaded that the assessee had shown income in the hands of his HUF from two trucks from assessment years 1999-2000 to 2001-02 and then from one truck from assessment year 2002-03 to 2004-05. 6. The next plea that has been taken is regarding the findings of the Tribunal on commission income. From the seized documents from the premises of the assessee, it reveals that assessee was earning commission income by leasing some mines. The assessee was confronted in this respect but no reply was received by the Assessing officer. The Assessing officer, therefore, made impugned additions. The Ld. CIT(A) also confirmed the additions. Before the Tribunal the assessee had taken a plea that he was not allowed to cross examine the concerned persons, in respect of commission income. The Tribunal, however, noted that the assessee neither during the assessment proceedings nor in appellate proceedings had produced any evidence in rebuttal of the evidence found in the course of search. That even the cross examination was not demanded. Therefore, the addition made by the lower authorities was confirmed. The assessee in this application has taken the plea that assessee had duly demanded the cross examination of the third party during the appellate proceedings before the Ld. CIT(A) in the written submissions made by the assessee before her. A copy of the said written submissions has been placed at page 37 of the paper book dated 20.6.2008. 7. We have considered the rival contentions. So far as the issue relating to the sale price of the lime stone is concerned, we find that order of the Tribunal on this issue is self-contradictory. Though, in para 10 of the order the Tribunal has directed that for other years except for assessment year 2004-05, the Assessing officer should apply sale rate of different varieties as was applied by the Assessing officer for assessment years 2002- 03 and 2003-04. Further, in the subsequent paras, the Tribunal itself has estimated the sale rate on the basis of report given by the third party and directed the Assessing officer to recalculate the sales of the respective assessment years including of assessment years 2002-03 and 2003-04. Even while arriving at the said conclusion, the evidence submitted by the assessee in the form of bills as were placed at pages 2 to 13 and 58 to 69 of the paper book dated 27.2.2005 has escaped the attention of the Tribunal. In view of this, it is a mistake apparent on record that has occurred in the order of the Tribunal on this issue. 4 8. So far as the profits on trucks is concerned, the Tribunal has directed the Assessing officer to exclude the income of such trucks which belonged to the HUF from the assessment of the assessee for the relevant period. In view of this, it is open to the assessee to demonstrate his case before the Assessing officer regarding the income from trucks vis-a-vis the ownership of the trucks. In view of this, we do not find that any error has occurred in the order of the Tribunal on this issue as it is open to the assessee to prove his case before the Assessing officer. 9. So far as the next issue relating to the commission income is concerned, we find that before the Ld. CIT(A), the assessee had taken a specific plea that the assessee had not been granted the opportunity to cross-examine the third party and a request had been made to give opportunity to the assessee for cross examination him so that the assessee may clarify his position. This plea of the assessee has escaped the attention of the Tribunal while upholding the order of the lower authorities on commission income. Hence, in our view, a mistake has occurred in the order of the Tribunal on this issue. 10. The next plea of the applicant is regarding estimation of the agricultural income. It has been pleaded by the applicant in the application that ground No.5 taken by the assessee regarding earning of agricultural income was duly argued before the Tribunal but the same has not been adjudicated. 11. We have gone through the ground of appeal for assessment year 2002-03 and have found that the assessee had taken a specific ground No.5 agitating the estimation of agricultural income at Rs.38,750/- as against Rs.1,55,000/- declared by the assessee. However, the said ground had remained un-adjudicated. Hence, the mistake is occurred in the order of the Tribunal on this issue also for assessment year 2002-03 12. Now coming to the Misc. Application No.186/Chd/2008 for assessment year 2003- 04. The assessee in this application has raised issues relating to the excessive sale rate of lime stone and estimation of business income, issue relating to the truck income pleading two trucks belong to the HUF and further that the issue relating to the estimation of agricultural income has remained un-adjudicated, and further that the issue of unexplained bank deposits had also remained un-adjudicated. 13. So far as the first plea regarding the estimation of sales rate of lime stone and estimation of business income is concerned, in view of our findings given above, while deciding Misc. Application No. 185/Chd/2008, we hold that a mistake apparent on record had occurred in the order of the Tribunal. 14. So far as the issue regarding income from trucks is concerned, we do not find any infirmity in the order of the Tribunal on this issue as it is open to the assessee to demonstrate before the Assessing officer that some trucks belong to HUF. So far as the plea regarding the non-adjudication on the grounds of estimation of agricultural income and regarding addition on account of unexplained banks deposits, we find that specific pleas have been raised by the assessee on these issues, in his appeal for 2003-04 vide ground Nos. 5 and 7 respectively, however, a perusal of the order of the Tribunal reveals that these grounds remained un-adjudicated. Hence, a mistake has occurred in the order of the Tribunal dated 7.7.2008, in this respect. 15. Now coming to Misc. Application No. 187/Chd/2008 for assessment year 2004-05, the grounds taken by the assessee in his application are identical to that have been taken in ITA No. 186/Chd/2008 for assessment year 2003-04. In view of this, our findings given above, would apply accordingly. 5 16. In view of our above discussion, the consolidated order dated 7.7.2008 of the Tribunal is recalled for assessment years 2002-03, 2003-04 and 2004-05 on the issues / grounds taken by the assessee regarding the sale rate of different varieties of lime stone and estimation of business income of the assessee for the aforesaid assessment years 2002-03, 2003-04 and 2004-05 and further order of the Tribunal for assessment year 2003-04 is also recalled relating to the adjudication on commission income from lease mining. Further, the order of the Tribunal is recalled for adjudication on the grounds taken in assessment years 2002-03, 2003-04 and 2004-05 regarding the estimation of agricultural income and for adjudication on the ground of addition on the basis of unexplained bank deposits for assessment years 2003-04 and 2004-05. 17. The appeals of the assessee for assessment years 2002-03, 2003-04 and 2004- 05 in ITA Nos. 185 to 197/Chd/2008 be listed for adjudication afresh on the limited points as noted above. However, findings of the Tribunal relating to the other issues and other assessment years will stand as such. The Registry is directed to fix the appeals accordingly for adjudication on these issues. Copy of this order be also placed in the respective main files. In view of this the above Misc. Applications filed by the assessee are treated as partly allowed. As is evident, the order has been recalled partially to re-adjudicate certain specific grounds. The common grounds to be adjudicated in all the three years are - (i) sale rate of different varieties of lime stone and estimation of business income of the assessee; (ii) estimation of agricultural income. For AY 2002-03, another ground to be adjudicated is commission income from lease mining. For AYs 2003-04 & 2004-05, the additional ground to be adjudicated is addition of unexplained bank deposits. Having heard rival submissions and upon perusal of case records, the same are adjudicated as under. 2. Sale rate and estimation of business income (AYs 2002-03 to 2004-05) 2.1 From assessment order for AY 2002-03, it emerges that the assessee extracted four qualities of minerals viz. Katchri, Bhatta, Dolomite and limestone. The assessee did not maintain regular books of accounts. In the absence of any cogent explanation as forthcoming 6 from the assessee, Ld. AO, on the basis of seized documents, estimated suppression of sales as follows: - Item Weight in MT Rate / MT Rs. Sale Rs. Dolomite 2505.000 180.00 4,50,900/- Lime Stone 60574.100 240.00 1,45,37,784/- Bhatta 13784.000 180.00 24,81,120/- Kachri 24194.000 165.00 39,92,010/- Suppression of Sales 101057.100 2,14,61,814/- The Ld. AO applied average GP Rate of 13.70% for AYs 2002-03 to 2004-05 and made addition of Rs.28.90 Lacs. Upon further appeal, Ld. CIT(A) applied GP Rate of 13.5% which was the rate as reflected in AY 1999-2000. The limestone rate was reduced to Rs.220/- per MT and rate for Kachri was reduced to Rs.155/- per MT since the rate taken by Ld. AO pertained to March, 2004. The same resulted into relief of Rs.22.60 Lacs for the assessee. Aggrieved, the assessee is in further appeal before us. 2.2 In AY 2003-04, Ld. AO made similar estimation and worked out an addition of Rs.4.06 Lacs. The Ld. AO adopted rate of dolomite as Rs.180/- per MT which was enhanced by Ld. CIT(A) to Rs.190/- per MT. The rate of limestone was reduced from Rs.240/- per MT to Rs.230/- per MT. The rate of Bhatta was enhanced from Rs.180/- per MT to Rs.190/- per MT. The rate of Kachri was enhanced from Rs.165/- per MT to Rs.190/- per MT. The Rate of GP as adopted by Ld. CIT(A) was 13.5%. By this working, the assessee got relief of Rs.0.21 Lacs. Aggrieved, the assessee is in further appeal before us. 7 2.3 In AY 2004-05, Ld. AO made similar estimation and worked out an addition of Rs.6.55 Lacs. The Ld. AO has applied universal rate of Rs.240/- per MT. The Ld. CIT(A) applied GP rate of 13.5% but upheld rate of Rs.240/- per MT. By this working, the assessee got relief of Rs.0.09 Lacs. Aggrieved, the assessee is in further appeal before us. 2.4 The Ld. AR drew out attention to the bills issued by the assessee for this year which are placed on Page Nos. 2 to 13 and 58 to 69 of the paper book. Upon perusal of Page No.12, it could be seen that on 30- 09-2001, the assessee has sold limestone at Rs.100/-per MT and Bhatta Kachri for Rs.80/- per MT. Since sufficient material is available to indicate prices at which the material was actually sold by the assessee, we direct Ld. AO to adopt rate of limestone @Rs.100/- per MT and the rate of Bhatta & Kachri @Rs.80/- per MT and re-compute the profits of the assessee for AY 2002-03. The GP rate of 13.6% has correctly been estimated which do not require any indulgence on our part. Similar material is available for AYs 2003-04. The Ld. AO is directed to adopt rate of limestone @Rs.100/- per MT and the rate of Bhatta & Kachri @Rs.80/- per MT and re-compute the profits of the assessee. The GP rate would be 13.6%. In AY 2004-05, the estimation is according to seized material. As per assessment order, the assessee has only sold limestone in this year. Therefore, no indulgence is required in the impugned order on this issue. The grounds for AYs 2002-03 & 2003-04 stands partly allowed. The ground for AY 2004-05 stands dismissed. 8 3. Agricultural Income (AYs 2002-03 to 2004-05) 3.1 The assessee reflected agricultural income of Rs.1.55 Lacs for AY 2002-03 on the ground that it owned 123 Bighas of agricultural land which yielded net income in the range of Rs.1.50 Lacs to Rs.1.75 Lacs per annum. However, it was found that the assessee family owned 45 Bighas and 4 Biswas and most of the land was not cultivated land. Accordingly, 3/4th of this income was treated as income from other sources. The same worked out to be Rs.1.16 Lacs. During first appeal, the assessee did not file any documentary evidences to substantiate the same. Accordingly the estimation of Ld. AO was confirmed. Aggrieved, the assessee is in further appeal before us. 3.2 In AY 2003-04, the assessee reflected agricultural income of Rs.1.64 Lacs. The Ld. AO treated Rs.1.23 Lacs as income from other sources. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3.3 In AY 2004-05, the assessee reflected agricultural income of Rs.1.68 Lacs. The Ld. AO treated Rs.1.26 Lacs as income from other sources. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3.4 We find that the findings of lower authorities are based on revenue records which established that the assessee was having much lesser land holding than claimed by him. In such a case, the estimation made by Ld. AO, in all the years, is quite reasonable. The arguments made by Ld. AR do not appeal to us in any manner. We see no reason 9 to interfere in the orders of lower authorities. The corresponding grounds, for all the years, stands dismissed. 4. Commission Income from mining business (AY 2002-03) 4.1 The seized documents revealed that the assessee earned commission income by leasing out his mines to M/s Thakur Mines & Minerals, VPO Kamrau which was also searched on 03-05-2001 wherein similar documents were found and seized. The documents found from the premises of the assessee were duplicate copies of the documents seized from M/s Thakur Mines and Minerals. The ledger of the assessee was also found therein. The assessee was confronted with the same but assessee could not explain the same. Accordingly, Ld. AO made addition of Rs.0.31 Lacs for AY 2002-03. During first appeal the assessee stated that the addition was merely on third party documents without chance to the assessee to confront the other party. However, Ld. CIT(A) upheld the addition against which the assessee is in further appeal before us. No such addition was made in AYs 2003-04 & 2004-05. 4.2 It is clear that the addition is not based merely on third-party statement or documents. During search, identical documents have been found from assessee’s premises as well as at the premises of other person. In such a case the transaction is fully substantiated and no opportunity of cross-examination would be required. The revenue was quite justified to make this addition. The grounds as raised by the assessee stand dismissed. 10 5. Unexplained Bank Deposits (AYs 2003-04 and 2004-05) 5.1 In AY 2003-04, the assessee could not explain source of bank deposits of Rs.1.25 Lacs and accordingly the same was treated as unexplained and added to the income of the assessee. The Ld. CIT(A) restricted the addition to the extent of Rs.1 Lacs against which the assessee is in further appeal before us. 5.2 In AY 2004-05, similar addition of bank deposit of Rs.5.08 Lacs was made by Ld. AO. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 5.3 We find that the assessee has not been able to establish the sources of these bank deposits. The Ld. CIT(A) has granted adequate relief wherever required. We see no reason to interfere in the same. The grounds as raised by the assessee stand dismissed. All the recalled grounds for respective years stand disposed-off accordingly. Conclusion 6. All the appeals of the assessee remain partly allowed. Order pronounced on 23-05-2025. Sd/- Sd/ राजपाल यादव मनोज क ुमार अŤवाल (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) उपाȯƗ/VICE PRESIDENT लेखा सद˟/ ACCOUNTANT MEMBER Dated: 23-05-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF 11 ASSISTANT REGISTRAR ITAT CHANDIGARH "