SHRI RAM PRAKASH,BASTI V. DY./ACIT (CENTRAL), GORAKHPUR

ITA 42/VNS/2023

AI Insights

The case involves multiple appeals by the assessee, Sri Ram Prakash, against the orders of the CIT(A), Lucknow-3, for various assessment years. The primary contention revolves around the reassessment of income following the seizure of cash during the 2019 General Elections and the subsequent actions under sections 132A and 153A of the Income Tax Act. The tribunal examined whether the additions made by the Assessing Officer for the years 2014-15 to 2017-18 were justified in the absence of incriminating material, and addressed issues related to the estimation of business income and denial of deductions for the years 2019-20 and 2020-21.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 40698 (ITAT-VARANASI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 11-09-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 24-04-2023
• Other Referred Cases: Abhisar Buildwell (P) Ltd., 454 ITR 212
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISHRA
• Assessee Lawyers: ASHISH BANSAL; ADVOCTE
• Keywords: Set aside; Business income
• Section: 144; 132; 80C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.38/VNS/2023 (Assessment Year :2014-15) ITA No.39/VNS/2023 (Assessment Year :2015-16) ITA No.40/VNS/2023 (Assessment Year :2016-17) ITA No.41/VNS/2023 (Assessment Year :2017-18) ITA No.42/VNS/2023 (Assessment Year :2019-20) & ITA No.43/VNS/2023 (Assessment Year :2020-21) Sri Ram Prakash Mahso Basti – 272 001 Uttar Pradesh Vs. Dy./ Asstt. Commissioner of Income Tax (Central) Gorakhpur PAN/GIR No.AGNPP9439D (Appellant) .. (Respondent) Assessee by Shri Ashish Bansal, Advocte Revenue by Shri Amalendu Nath Mishra Date of Hearing 11/09/2024 Date of Pronouncement 21/11/2024 आदेश / O R D E R PER BENCH: All the appeals filed by the assessee are directed against the orders passed by ld. CIT(A), Lucknow-3 and they relate to ITA No.38/VNS/2023 and others Shri Ram Prakash 2 the Assessment Years 2014-15 to 2017-18, 2019-20 and 2020-21. 2. All the appeals were heard together and being disposed of by this common order, for the sake of convenience. 3. The assessee is engaged in the civil contract work. During General Election-2019, Vehicle no. UP51-K7071 belonging to the assessee was intercepted by Police. In the said vehicle, cash of Rs.23,95,500/- was found. The driver and the passenger travelling in the car confessed that the above said cash belongs to the assessee herein. Accordingly, warrant of authorisation u/s.132A of the Act was issued on 10/05/2019 by PCIT (INV) Lucknow and executed upon the Police officials on 13/05/2019 i.e. after completion of the Poll in that constituency. However, the cash was not handed over to the Income Tax department by the Police by informing that a case has been registered u/s.188 of IPC. 4. Consequent to the initiation of action u/s.132A of the Act in respect of the assessee, the Assessing Officer reopened the assessment of Assessment Years 2014-15 to 2019-20 u/s.153A of the Act. Before the Assessing Officer, assessee did not appear and hence, he was constrained to pass the assessment orders to the best of his judgment u/s.144 of the Act. ASSESSMENT YEARS 2014-15 TO 2017-18: ITA No.38/VNS/2023 and others Shri Ram Prakash 3 5. We shall first adjudicate the appeals filed for assessment years 2014-15 to 2017-18, as it is stated that these years fall under the category of unabated assessment years. 6. In Assessment Years 2014-15 to 2017-18, the Assessing Officer rejected the business income declared by the assessee in the returns of income filed by him and proceeded to estimate income from business @ 8% of the gross contract receipts, which resulted in enhancement of business income. Accordingly, he made addition of the difference in the business income in all the four years. The ld. CIT(A) also confirmed the additions. 7. The ld. AR submitted that the Assessment Years 2014- 15 to 2017-18 fall under the category of „unabated assessments‟ and hence, the Assessing Officer could have made the addition only on the basis of incriminating material, if any, found during the course of search. He submitted that no material relating to Assessment Years 2014-15 to 2017-18 was found in the action taken u/s.132A of the Act. Accordingly, he submitted that the AO could not have disturbed the assessments already completed in these years as per the decision rendered by the Hon‟ble Supreme Court in the case of Abhisar Buildwell (P) Ltd., 454 ITR 212. 8. We heard ld. DR on these four years. The ld. DR could not controvert the factual aspects presented by the ld. AR. In the ITA No.38/VNS/2023 and others Shri Ram Prakash 4 case of Abhisar Buildwell (P) Ltd., the Hon‟ble Supreme Court has held that the Assessing Officer cannot make addition in the case of unabated assessment years without their being any incriminating material. The conclusions reached by Hon‟ble Supreme Court in the above said case are extracted below:- “14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the „total income‟ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.” Admittedly, in these four years, no incriminating material was found by the Revenue and hence, the Assessing Officer could not have disturbed the income already assessed. Accordingly, we set aside the orders passed by the ld. CIT(A) in all these four years and direct the AO to delete the additions made by him in these four years. ITA No.38/VNS/2023 and others Shri Ram Prakash 5 ASSESSMENT YEAR 2019-20: 9. The issues urged in this year is related to estimation of business income @ 8% of Gross contract receipts as against 5.20% declared by the assessee and non-granting of deduction u/s 80C and 80TTA claimed by the assessee. 10. As noticed earlier, the AO was constrained to pass the order to the best of his judgement u/s 144 of the Act, since the assessee did not appear before him. Hence the AO estimated the business income of the assessee @ 8% of the Gross contract receipts rejecting the book results. The same has resulted in an addition of Rs.2,22,518/-. The Ld CIT(A) also confirmed the same. 11. We heard the parties on this issue and perused the record. Since the assessee has not appeared and produced the books of accounts, the AO has estimated the business income @ 8% of the Gross contract receipts. Though the assessee is disputing the said estimate, yet no material was placed before us in order to compel us to interfere with the estimate so made by the AO. Accordingly, we are of the view that the order passed by Ld CIT(A) on this issue does not call for any interference. 12. With regard to the next issue of non-granting of deduction claimed u/s 80C and 80TTA of the Act, we are of the view that the same requires to be restored to the file of the AO. Accordingly, we set aside the order passed by Ld CIT(A) ITA No.38/VNS/2023 and others Shri Ram Prakash 6 on this issue and restore the same to the file of the AO for examining the above said claim of the assessee in accordance with law. ASSESSMENT YEAR 2020-21: 13. The only issue urged in this appeal is related to the addition of seized cash of Rs.23,95,000/-. The AO was constrained to assess the above said cash seized from the vehicle of the assessee on 09-05-2019 by the Police, as unexplained income of the assessee, since no explanation was filed by the assessee before him. The Ld CIT(A) granted a relief of Rs.4,00,000/- on noticing that a sum of Rs.4,00,000/- was withdrawn from bank on11.4.2019. Accordingly he confirmed the remaining amount of addition of Rs.19,95,000/-. Still aggrieved, the assessee has filed this appeal. 14. We heard the parties and perused the record. The Ld A.R submitted that the assessee is regularly assessed to tax and he has shown cash balance of Rs.8,92,190/- as on 31.3.2019 in his Balance Sheet. Accordingly, the Ld A.R prayed that the above said cash balance may be directed to be set off against the addition of Rs.19,95,000/- confirmed by Ld CIT(A). We find merit in this prayed of the assessee. Accordingly, we modify the order passed by Ld CIT(A) on this issue and direct the AO to set off the cash balance of Rs.8,92,190/- shown in the Balance Sheet as on 31.3.2016 ITA No.38/VNS/2023 and others Shri Ram Prakash 7 against the addition of Rs.19,95,000/- confirmed by Ld CIT(A). In this regard, the AO may verify the return of income filed by the assessee for AY 2016-17. We order accordingly. 15. In the result, (a) the appeals pertaining to AY 2014-15 to 2017-18 are allowed and (b) the appeal pertaining to AY 2019-20 and 2020-21 are treated as partly allowed. Order pronounced on 21/11/2024 by way of proper mentioning in the notice board. Sd/- (AMIT SHUKLA) Sd/- (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Varanasi; Dated 21/11/2024 KARUNA, sr.ps ITA No.38/VNS/2023 and others Shri Ram Prakash 8 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Varanasi 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "