Shri Gyansingh Jitsing Chauhan, Surat v. The Dy.CIT.,Cent.Circle-2,, Surat

ITA 1232/AHD/2009 | 2006-2007
Pronouncement Date: 23-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 123220514 RSA 2009
Assessee PAN ABDPL4282F
Bench Ahmedabad
Appeal Number ITA 1232/AHD/2009
Duration Of Justice 1 year(s) 3 month(s) 5 day(s)
Appellant Shri Gyansingh Jitsing Chauhan, Surat
Respondent The Dy.CIT.,Cent.Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 23-07-2010
Date Of Final Hearing 26-05-2010
Next Hearing Date 26-05-2010
Assessment Year 2006-2007
Appeal Filed On 17-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : A HMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HON'BLE SH RI D.C. AGRAWAL A.M.) I.T.A. NOS. 1228 TO 1232/AHD./2009 ASSESSMENT YEAR : 2002-2003 TO 2006-2007 GYANSING JITSING CHAUHAN SURAT -VS.- DEPUTY COMMISSIONER OF INCOME TAX (PAN : ABDPL 4282 F) CENTRAL CIRCLE-2 SURAT (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RASESH SHAH RESPONDENT BY : SHRI ASHOK BAL CIT D .R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THESE FIVE APPEALS FILED BY THE ASSESSEE ARE AGAIN ST THE COMMON ORDER DATED 06.02.2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II AHMEDABAD FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S RUNNING A PROPRIETARY CONCERN IN THE NAME OF M/S. GANESH SECURITY SERVICE WHICH IS ENGAGED I N THE BUSINESS OF PROVIDING SECURITY SERVICES GUARDS TO VARIOUS INDUSTRIAL HOUSES AND OTHER PARTI ES. A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT 1961 WAS CARRIED OUT AT THE RESIDENCE OF T HE ASSESSEE ON 16.03.2006. DURING THE COURSE OF SEARCH STATEMENT OF SHRI GYANSING JITSING CHAUH AN PROPRIETOR WAS RECORDED UNDER SECTION 132(4) OF THE ACT. IN THIS STATEMENT HE STATED THA T ABOUT 150 SECURITY GUARDS 12 GUNMEN AND 3 SUPERVISORS WERE WORKING WITH HIM. IN ADDITION TO T HIS HE HAD ALSO DEPUTED 212 WATCHMEN 22 GUNMEN AND 8 SUPERVISORS TO 46 DIFFERENT PARTIES. H E HAS ALSO STATED THAT HE IS PROVIDING GUARDS FOR EMERGENCY DUTIES AND ALSO ON VARIOUS SOCIAL OCC ASIONS LIKE NAVRATRI MARRIAGES ETC. IN HIS STATEMENT HE HAD STATED THAT NO RECEIPTS WERE BEIN G ISSUED FOR PAYMENTS RECEIVED IN CASH FROM VARIOUS PARTIES ESPECIALLY FOR EMERGENCY DUTIES. ON LY RECEIPTS BY WAY OF CHEQUES ARE RECORDED IN THE BOOKS OF ACCOUNTS. HOWEVER NO SALARY REGISTER OR ATTENDANCE REGISTER ARE MAINTAINED. DURING THE COURSE OF SEARCH TOTAL RECEIPTS FOR ASSESSMENT YEAR 2006-07 WAS WORKED OUT TO RS.81 38 400/-. AT THE TIME OF SEARCH THE RECEIPT OF RS.32 00 546/- WAS WORKED OUT BEING RECEIVED THROUGH CHEQUE. IN THE STATEMENT RECORDED THE ASSESSEE ACCEPTED THE DIFFERENTIAL AMOUNT OF RS.49 37 854/- AS HIS UNACCOUNTED RECEIPTS NOT S HOWN IN THE BOOKS OF ACCOUNTS FOR THE 2 ITA NOS .1228-1232/AHD/2009 ASSESSMENT YEAR 2006-07. THE ALLEGED SUPPRESSED REC EIPTS OF RS.49 37 854/- WAS WORKED OUT AT 60% OF THE TOTAL RECEIPTS. IN THE STATEMENT RECORDE D UNDER SECTION 132(4) THE ASSESSEE ALSO STATED THAT UNACCOUNTED RECEIPTS IN THE EARLIER YEARS WERE TO THE TUNE OF 50% OF TOTAL RECEIPTS. ACCORDINGLY THE ASSESSEE DECLARED THE UNACCOUNTED I NCOME OF RS.40 00 000/- WHICH IS BIFURCATED AS UNDER :- ASSESSMENT YEAR UNACCOUNTED INCOME (IN RS.) 2001-02 1 00 000/- 2002-03 2 00 000/- 2003-04 5 00 000/- 2004-05 7 00 000/- 2005-06 10 00 000/- 2006-07 15 00 000/- 2.1. IN RESPONSE TO NOTICE UNDER SECTION 153A(A) OF THE INCOME TAX ACT THE ASSESSEE FILED THE RETURN OF INCOME SHOWING TOTAL INCOME FOR THE ASSES SMENT YEARS 2001-02 TO 2006-07 AS UNDER :- ASSESSMENT YEAR INCOME DECLARED (IN RS.) 2001-02 1 63 269/- 2002-03 1 77 310/- INCLUDING AGRICULTURAL INCOME OF RS.60 540/- 2003-04 RS.2 78 430/- INCLUDING AGRICULTURAL INCOME OF RS.58 700/- 2004-05 2 10 020/- INCLUDING AGRICULTURAL INCOME OF RS.65 500/- 2005-06 RS.1 31 100/- INCLUDING AGRICULTURAL INCOME OF RS.55 630/- 2006-07 RS.3 06 300/- 2.2. FOR ALL THE ASSESSMENT YEARS THE ASSESSING OF FICER FRAMED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 153A WHEREIN HE OBSERVED THAT FROM THE STATEMENT RECORDED UNDER SECTION 132(4) IT IS CLEAR THAT THE ASSESSEE HIMSE LF HAS ADMITTED THAT HE IS RECORDING ONLY PART OF RECEIPTS IN HIS BOOKS. NO DETAILS OF EXPENSES SUCH AS PAYMENT OF SALARY TO GUARDS AND OTHER PERSONS ARE MAINTAINED. THE ASSESSING OFFICER ACCOR DINGLY ASKED THE ASSESSEE TO EXPLAIN THE BASIS OF DISCLOSURE OF RS.40 00 000/- AND HOW THE S AME WAS EARNED. IN REPLY THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS :- WE WOULD LIKE TO DRAW YOUR KIND ATTENTION TOWARDS THE FACT THAT ABOVEMENTIONED DISCLOSURE WAS MADE PURELY ON ESTIMA TE BASIS. ASSESSEE BEING AN ILLITERATE PERSON AND HAVING NO PARTICULAR METHOD/ BASIS FOR 3 ITA NOS .1228-1232/AHD/2009 CALCULATION OF UNDISCLOSED INCOME HAS BY MISTAKE OV ERSTATED HIS UNDISCLOSED INCOME. ANSWERS TO QUESTION NO. 6 AND 15 REVEALS FOLLOWING FACTS REGARDING HIS GROSS MARGIN OF BUSINESS :- PARTICULARS RS. CHARGES OF GUARD (AVG.) 2 600.00 LESS : PAYMENT TO GUARD (AVG.) 2 000.00 GROSS PROFIT (PER GUARD) 600.00 GROSS PROFIT MARGIN (%) 23.08%. EVEN IF IT IS ASSUMED THAT CALCULATIONS REGARDING N UMBER OF GUARDS CALCULATED IN ANSWER TO QUESTION NO. 6 IS CORRECT AND THAT THE Y WERE EMPLOYED THROUGH OUT THE FY 2005-06 ASSESSEES TURNOVER FOR FY 2005 -06 COMES TO RS.81 38 400/-. ACCORDINGLY SUPPRESSED TURNOVER IS WORKED OUT TO BE RS.49 37 857/- (AS PER ANSWER TO QUESTION NO. 16 OF THE STATEMENT). GROSS PROFIT ON THE SUPPRESSED TURNOVER COMES TO RS.11 39 656/- (23.08%) AS WORKED OUT BEFORE) AS AGAINST DECLARED UNDISCLOSED INCOME OF RS.15 00 000/-. IT CLEARLY SUGGESTS INACCURACY OF THE DISCLOSURE MA DE DURING RECORDING OF STATEMENT. HOWEVER WE WOULD LIKE TO CLARIFY THAT RETURN OF AY 2006-07 (FY 2005-06) HAS BEEN FILED BY THE ASSESSEE CONSIDERING ALL THE SUPP RESSED TURNOVER ON THE ACTUAL BASIS AND TAX HAS BEEN PAID ACCORDINGLY. HEN CE NO DISCLOSURE HAS BEEN SHOWN SEPARATELY IN THE ABOVE SAID RETURN FOR AY 2006-07. WITH REGARD TO RETURNS FOR AY 2001-02 TO 2005-06 W E HAVE TO SUBMIT THAT ASSESSEE HAS FILED RETURNS ON THE BASIS OF ACTUAL T URNOVER (INCLUDING SUPPRESSED TURNOVER) AND DISCLOSED EXCESS PROFIT (U NDISCLOSED INCOME). 2.3. AFTER CONSIDERING THE AFORESAID SUBMISSIONS T HE ASSESSING OFFICER ACCEPTED THE RETURNED INCOME ONLY FOR THE ASSESSMENT YEAR 2001-02. FOR TH E ASSESSMENT YEARS 2002-03 TO 2006-07 THE ASSESSING OFFICER MADE ADDITIONS OF UNDISCLOSED INC OME ON THE BASIS OF STATEMENT AMOUNTING TO RS.1 00 431/- RS.5 00 000/- RS.6 00 000/- RS.10 00 000/- AND RS.15 00 000/- RESPECTIVELY. 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) THE ASSESSEE CONTENDED THAT MOST OF RECEIPTS WERE THROUGH BANK O NLY AND ALL THE RECEIPTS WERE REFLECTED IN THE BANK A/C. AND AS SHOWN IN THE BOOKS OF ACCOUNTS. TH E FIGURES OF ADDITIONAL INCOME GIVEN IN THE STATEMENT UNDER SECTION 132(4) WERE ON APPROXIMATE BASIS IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE. IT WAS CONTENDED THAT NO ADDITION SHOULD BE MADE ON THE BASIS OF STATEMENT WHEN THERE 4 ITA NOS .1228-1232/AHD/2009 IS NO EVIDENCE OR MATERIAL TO JUSTIFY THESE ADDITIO NS. FOR THIS RELIANCE WAS PLACED ON VARIOUS DECISIONS NAMELY ACIT VS.-JORAWARSINGH M. RATHOD 9 4 TTJ (AHD.) 867 CIT VS.- ANUPKUMAR 94 TTJ 288 (ASR) SMT. RANCHANABEN M. SHAH VS.- AC IT 83 TTJ 369 ETC. IT WAS FURTHER SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT IN THE STATEMENT RECORDED RECEIPT IN BANK ACCOUNT TILL THE DATE OF SEARCH WAS OF RS.32 00 546 /- BUT IN FACT TOTAL RECEIPT IN THE BANK WERE OF RS.58 20 793/-. HENCE IT IS WRONG TO CONCLUDE THAT 50% OF RECEIPTS WERE SUPPRESSED AND THE DECLARATION WAS BASED ON WRONG INFORMATION. ON THIS BASIS IT WAS CONTENDED THAT ACTUAL CASH RECEIPT SHOULD BE TAKEN AS RS.12 65 900/- FOR THE A SSESSMENT YEAR 2006-07 AND GROSS PROFIT AT THE RATE OF 23% ON IT GIVES UNDISCLOSED INCOME OF RS.2 91 157/- ONLY. SIMILARLY FOR THE ASSESSMENT YEAR 2005-06 SUPPRESSED INCOME AT THE RATE OF 23% O N CASH RECEIPT OF RS.10 81 434/- GIVES THE SUPPRESSED INCOME OF RS.2 48 730/- FOR THE ASSESSME NT YEAR 2004-05. IT IS REASONABLE TO HAVE INCOME OF RS.1 89 488/- (23% X RS.3 23 863/-) FOR T HE ASSESSMENT YEAR 2002-03 AND 2003-04 NO ADDITION SHOULD BE MADE AT ALL. 4. AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTI ON OF ASSESSING OFFICER FOR THE DETAILED REASONS GIVEN IN PARA 5 OF THE IMPUGNED ORDER WHIC H READS AS UNDER :- 5. I HAVE CONSIDERED THE FACTS AND SUBMISSIONS. I DO NOT AGREE WITH THE APPELLANTS VIEW. DURING THE SEARCH IT WAS FOU ND THAT APPELLANT IS SUPPRESSING RECEIPTS. THE RECEIPTS FROM CHEQUE WERE ONLY ENTERED IN THE BOOKS BUT THE CASH RECEIPTS WERE NOT SHOWN. THE AM OUNT OF CASH RECEIPTS RECEIVED AND THE RESULTANT INCOME FROM THESE WERE I N THE PERSONAL KNOWLEDGE OF THE APPELLANT AND ON THAT BASIS HE WOR KED OUT AND ADMITTED IN HIS STATEMENT U/S. 132(4) THE QUANTUM OF SUPPRES SED INCOME FOR ALL THE YEARS. HE EVEN NARRATED THE NUMBER OF SECURITY GUAR DS IMPLIED THEIR SALARY AND INCOME FROM DEPLOYMENT OF EACH GUARD G. P. RATE ETC. HENCE AT THIS STAGE THE SUBMISSION OF THE ASSESSEE THAT C ASH RECEIPT AND RESULTANT INCOME ADMITTED IN THE STATEMENT IS INCORRECT IS WI THOUT ANY EVIDENCE AND IS AFTER THOUGHT ONLY. THE CASE LAWS RELIED ON BY T HE APPELLANT IS NOT APPLICABLE AS IN THIS CASE ADDITION IS MADE BY THE A.O. ON THE BASIS OF STATEMENT AS WELL AS EVIDENCE. HENCE ACTION OF THE A.O. IS JUSTIFIED AND ADDITION IS CONFIRMED. AGGRIEVE BY THE ORDER OF LEARNED COMMISSIONER OF IN COME TAX(APPEALS) THE ASSESSEE IS IN APPEALS BEFORE THE TRIBUNAL. 5 ITA NOS .1228-1232/AHD/2009 5. AT THE TIME OF HEARING BEFORE US ON BEHALF OF A SSESSEE SHRI RASESH SHAH LD. COUNSEL APPEARED AND CONTENDED THAT THE TOTAL RECEIPTS OF R S.81 38 400/- DETERMINED FOR THE ASSESSMENT YEAR 2006-07 UNDER SECTION 132(4) WAS AN ESTIMATED FIGURE. IN THE RETURN OF INCOME FILED AFTER SEARCH FOR ASSESSMENT YEAR 2006-07 ASSESSEE INCLUD ED ALL HIS RECEIPTS BY WAY OF CHEQUE; FROM 1.4.2005 TO 31.3.2006 WHICH IS RS.61 40 014/-. ASSE SSEE RECEIVED RS.58 20 793/- THROUGH CHEQUES TILL THE DATE OF SEARCH FOR FINANCIAL YEAR 2005-06 AND RS.3 19 221/- AFTER THE DATE OF SEARCH TILL 31.3.2006. SO TOTAL RECEIPTS OF RS.61 4 0 014/- WAS REFLECTED IN THE AUDITED ACCOUNTS FOR ASSESSMENT YEAR 2006-07. ALTHOUGH IT WAS STATED THA T ASSESSEE ALSO RECEIVED CASH RECEIPTS NO EVIDENCE WAS FOUND THAT ASSESSEE HAS RECEIVED ANY C ASH RECEIPT IN THE COURSE OF SEARCH. ASSESSEE IN FACT IS NOT RECEIVING ANY RECEIPTS THROUGH CASH . CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION C ANNOT BE TAKEN AS PER INSTRUCTION OF THE BOARD NO. F. NO. 286/2/2003-IT (INV.). THIS INSTRUCTION O F BOARD WAS FOLLOWED IN THE CASE OF KAILASHBEN MANAHARLAL CHOKSI VS.- CIT 220 CTR 138 BY HON'BLE GUJARAT HIGH COURT. NO EVIDENCE WAS COLLECTED IN THE COURSE OF SEARCH IN S UPPORT OF RECEIPTS OF RS.81 38 400/-. THE LD. COUNSEL OF THE ASSESSEE CONTENDED THAT NO EVIDENCE WAS FOUND INDICATING THAT ASSESSEE RECEIVED ANY CASH FOR DEPLOYMENT OF THE GUARDS FOR EMERGENCY DUTIES OR FOR REGULAR DEPLOYMENT OF GUARDS. EVEN IN THE COURSE OF ASSESSMENT PROCEEDINGS NO EV IDENCE WAS BROUGHT ON RECORD BY ASSESSING OFFICER IN SUPPORT OF WORKING OF RECEIPTS OF RS.81 38 400/-. THE LD. COUNSEL OF THE ASSESSEE ALSO CONTENDED THAT NO ASSET WAS FOUND IN THE COURSE OF SEARCH CORRESPONDING TO DISCLOSURE MADE BY THE ASSESSEE. EVEN THE ASSESSING OFFICER HAS NOT ID ENTIFIED ANY EXPENDITURE OR ASSET AGAINST THE DISCLOSURE. 5.1. WITHOUT PREJUDICE ABOVE THE LD. COUNSEL OF TH E ASSESSEE SUBMITTED THAT THE AUTHORIZED OFFICER AT THE TIME OF SEARCH WRONGLY WORKED OUT RE CEIPTS OF BANK WHICH ACTUALLY COMES TO RS.58 20 793/- AND NOT RS.32 00 546/-. CONSIDERING THE CHEQUE RECEIPT ASSESSEE DISCLOSED RS.61 40 014/- IN THE AUDITED ACCOUNTS FOR THE ASSE SSMENT YEAR 2006-07. THE SUPPRESSED CASH RECEIPTS FOR THE ASSESSMENT YEAR 2006-07 TILL THE D ATE OF SEARCH COMES TO RS.23 17 607/- AND FOR FULL YEAR IT COMES TO RS.19 98 386/-. HE CONTENDED THAT ON THIS BASIS AND CONSIDERING THE TOTAL RECEIPTS AS WORKED OUT BY THE AUTHORIZED OFFICER AS PER THE STATEMENT U/S. 132(4) OF RS.81 38 400/- THE RATIO OF CASH RECEIPTS TO TOTAL RECEIPTS COMES TO 25 : 75 OR 32.54% OF THE CHEQUE RECEIPTS. THE LD. COUNSEL SUBMITTED THAT THE TOTAL RECEIPTS CANNOT BE TAXED BUT ONLY THE NET PROFIT CAN BE TAXED. EVEN IF IT IS ASSUMED THAT ASS ESSEE HAS ACCOUNTED ALL HIS INDIRECT EXPENDITURE 6 ITA NOS .1228-1232/AHD/2009 RELATED TO SUPPRESS RECEIPTS ONLY THE GROSS PROFIT CAN BE TAXED AND NOT THE TOTAL RECEIPTS. IN THE STATEMENT U/S. 132(4) THE ASSESSEE CLEARLY STATED THAT GROSS PROFIT RATIO COMES TO 23.08% ONLY. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED T HAT THE ASSESSEE MADE THE ABOVE SUBMISSION WHICH HAS BEEN REPRODUCED BY ASSESSING OFFICER AT P ARA 7 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2006-07. TO SUM UP THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER BE DIRECTED TO RE-WORK OUT THE ADDITION ACC ORDINGLY. THEREFORE ADDITION AT 23.8% BEING THE GROSS PROFIT RATIO COMES TO RS.4 61 227/- WHICH IS EXPLAINED BY THE FOLLOWING TABLE :- PARTICULARS ASSESSMENT YEAR 2006-07 TOTAL RECEIPTS AS PER STATEMENT RECORDED UNDER SECTION 132(4)..(A) RS.81 38 400/- RECEIPTS AS PER RETURN OF INCOME..(B) RS.61 40 014/- SUPPRESSED CASH RECEIPTS [C = (A) (B)] RS.19 98 386/- RATIO OF SUPPRESSED CASH RECEIPTS TO RECORDED RECEIPTS 32.54% ADDITION TO BE MADE AT 23.08% [C * 23.08/100] RS.4 61 227/- THERE WAS NO BANK ACCOUNT OF ASSESSEE IN AY 2002-03 AS ASSESSEE OPENED THE BANK ACCOUNT IN SARVODAYA SAHAKARI BANK LTD. ON 09.10.2002 AND IN S URAT MERCANTILE COOPERATIVE BANK LTD. ON 07.03.2003 RELEVANT TO AY 2003-04. HOWEVER ASSESSE E MADE VOLUNTARY DISCLOSURE OF RS.99 569/- IN RETURN FILED UNDER SECTION 153A. ACCORDING TO LD. COUNSEL OF THE ASSESSEE THE DISCL OSED THE CASH RECEIPTS IN HIS BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 AND IT IS REQUIRED TO BE SET OFF AGAINST THE CASH RECEIPTS WHICH MAY BE ESTIMATED AT RATIO OF 32.54% OF THE CHEQUE RECEIPTS. ACCORDINGLY NO ADDITION IS WORKED OUT FOR ASSESSMENT YEAR 2003-04. IT WAS SUBMITTED THAT FOR ASSESSMENT YEAR 2004-05 ASSESSEE DECLARED ADDITIONAL INCOME OF RS. 1 00 000/- IN THE RETURN OF INCOME FILED AFTER SEARCH SO IT IS ALSO REQUIRED TO BE SET OFF. ADDIT ION OF RS.79 261/- AND RS.2 43 656/- CAN BE WORKED OUT FOR ASSESSMENT YEAR 2004-05 AND 2005-06 AS PER THE FOLLOWING TABLE :- 7 ITA NOS .1228-1232/AHD/2009 SR. NO. PARTICULARS AY 2002-03 AY 2003-04 AY 2004-05 AY 2005-06 A CHEQUE RECEIPTS IN THE BOOKS 10 23 229/- 24 50 795/- 32 44 302/- B CASH RECEIPTS IN BOOKS 19 88 591/- 10 17 426/- 20 794/- C CASH RECEIPTS AS PER AY 2006-07 @ 32.54% 3 32 959/- 7 97 489/- 10 55 696/- D DIFFERENTIAL SUPPRESSED CASH RECEIPTS 7 76 695/- 10 55 696/- E SUPPRESSED PROFIT ON CASH RECEIPTS @ 23.08% 1 79 261/- 2 43 655/- F ADDITIONAL INCOME DECLARED IN RETURN FILED U/S. 153A 1 00 000/- G ADDITION TO BE MADE NIL NIL 79 261/- 2 43 655/- IN VIEW OF THE ABOVE IT WAS SUBMITTED THAT NO ADDI TION SHOULD BE MADE IN ANY ASSESSMENT YEAR BECAUSE THE DISCLOSURE MADE BY THE ASSESSEE AT THE TIME OF SEARCH WAS NOT BACKED BY ANY EVIDENCE AND NO ASSET OR EXPENDITURE WAS IDENTIFIED AGAINST DISCLOSURE MADE. WITHOUT PREJUDICE TO ABOVE THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IF AT ALL ANY ADDITION IS REQUIRED TO BE MADE THAT SHOULD BE RS.79 260/- FOR A.Y. 2004-05 RS.2 43 655/- FOR A.Y. 2005-06 AND RS.4 61 227/- FOR A.Y. 2006-07. 6. ON THE OTHER HAND SHRI ASHOK BAL CIT D.R. APP EARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). THE LD. D.R. POINTED OUT THAT THE ASSESSEE HIMSELF VOLUNTARILY G AVE THE STATEMENT UNDER SECTION 132(4) WHEREIN HE FURNISHED THE VARIOUS DETAILS AND DISCLO SED THE ADDITIONAL INCOME. THE ASSESSEE HIMSELF NARRATED THE NUMBER OF SECURITY GUARDS THE IR SALARY AND INCOME EARNED FROM DEPLOYMENT OF EACH GUARD. THE CONTENTION THAT INCOM E DISCLOSED WAS WITHOUT ANY BASIS AT THIS STAGE IS OF NO CONSEQUENCE BECAUSE INCOME EARNED IS WITHIN THE KNOWLEDGE OF THE ASSESSEE AND IT WAS DISCLOSED BY HIM THEREFORE THE LD. D.R. POINT ED OUT THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 8 ITA NOS .1228-1232/AHD/2009 7. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. PRIMA FACIE IT APPEARS THAT FOR ALL THE ASS ESSMENT YEARS UNDER APPEALS THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE A DDITION MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH. ADMITTEDLY DURING THE COURSE OF SEARCH THE SEARCH PARTY MADE NO ATTEMPT TO FIND OUT HOW THE ASSESSEE SPENT/ INVESTED OR UTILIZED THE UNDISCLOSED AMOUNT OF RS.40 LACS IN VA RIOUS ASSESSMENT YEARS. THIS DISCLOSURE MADE BY THE ASSESSEE AT THE TIME OF SEARCH WAS NEITHER B ACK BY EVIDENCE NOR THE SEARCH PARTY MADE AN ATTEMPT TO FIND OUT EXPENDITURE OR ASSETS CREATED A GAINST DISCLOSURE MADE BY THE ASSESSEE. DURING THE COURSE OF HEARING LD. COUNSEL OF THE ASSESSEE FILED DETAILS OF GROSS RECEIPTS. IT IS TRUE THAT AN ASSESSEE WHO MADE A VOLUNTARY DECLARATION ON OATH C ANNOT BE PERMITTED TO TURN AROUND LATER AND DENIED TRUTH OF SAID DECLARATION. BUT AT THE SAME IT CANNOT BE IGNORED THAT THE ASSESSEE IS AN ILLITERATE PERSON. ADMISSION MADE BY HIM IS WITHOUT ANY BASIS OR ANY CONCLUSIVE EVIDENCE. FROM THE STATEMENT RECORDED ONE THING IS CLEAR THAT ASSE SSEE WAS NOT RECORDING THE ENTIRE RECEIPTS AS WELL AS EXPENDITURE IN THE BOOKS OF ACCOUNTS. THERE FORE KEEPING THIS IN MIND LET US EXAMINE THE FACTS IN EACH ASSESSMENT YEAR. ASSESSMENT YEAR : 2002-03 : IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE HAS NOT HAVING BANK ACCOUNT AS STATED EARLIER BOTH THE BANK ACCOUNTS OPENED BY THE ASSESSEE IN THE NEXT ASSESSMENT YEAR. ACCORDING TO ASSESSEE ALL THESE RECEIPTS AMOUNTING TO RS.19 88 591/- IN THIS ASSESSMENT YEAR WERE IN CASH AND ARE SHOWN IN THE BOOKS OF ACCOUNTS. IN THE STATEMENT RECORDED UNDER SECTION 132(4) FOR TH IS ASSESSMENT YEAR THE ASSESSEE DECLARED UNACCOUNTED INCOME OF RS.2 00 000/-. AS AGAINST THI S INCOME DECLARED BY THE ASSESSEE IN THIS ASSESSMENT YEAR IS RS.1 77 310/- WHICH INCLUDES AG RICULTURAL INCOME OF RS.60 540/-. PRIMA FACIE IT APPEARS THAT INCOME DECLARED BY THE ASSESSEE FOR THIS ASSESSMENT YEAR IS FAIR AND REASONABLE. THEREFORE NO FURTHER ADDITION IS CALLED FOR. HENCE THE ADDITION OF RS.1 00 431/- MADE IS HEREBY DELETED. ASSESSMENT YEAR : 2003-04 : FOR THIS ASSESSMENT YEAR IN THE BOOKS OF ACCOUN TS THE ASSESSEE HAS DECLARED CHEQUE RECEIPTS OF RS.10 23 229/- AND CASH RECEIPTS OF RS.10 17 426/-. THE CASH RECEIPT ESTIMATED AS PER ASSESSMENT YEAR 2006-07 ARE @ 32.5 4% WHICH WORKS OUT TO RS.3 32 959/-. FOR THIS ASSESSMENT YEAR THE ASSESSMENT HAS DECLARED T OTAL INCOME OF RS.2 78 430/- INCLUDING AGRICULTURAL INCOME OF RS.58 700/-. THE UNACCOUNTED INCOME DECLARED AT THE TIME OF SEARCH FOR 9 ITA NOS .1228-1232/AHD/2009 THIS ASSESSMENT YEAR WAS RS.5 LAKHS. KEEPING IN VIE W THE CASH AND CHEQUE RECEIPTS DECLARED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WE ARE OF TH E VIEW THAT NO FURTHER ADDITION FOR THIS ASSESSMENT YEAR IS CALLED FOR. THEREFORE THE ADDIT ION OF RS.5 LAKHS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS DELETED. ASSESSMENT YEAR : 2004-05 : IN THIS ASSESSMENT YEAR IN THE RETURN OF INCOME THE ASSESSEE HAS DECLARED TOTAL INCOME OF RS.2 10 020/- INCLUDING AG RICULTURAL INCOME OF RS.65 500/-. AT THE TIME OF SEARCH UNDISCLOSED INCOME ADMITTED BY THE ASSES SEE FOR THIS ASSESSMENT YEAR IS RS.7 LAKHS. HOWEVER THE ASSESSING OFFICER MADE THE ADDITION OF RS.6 LAKHS BECAUSE ACCORDING TO HIM THE ASSESSEE HAS ALREADY DECLARED ADDITIONAL INCOME OF RS.1 LAKH IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A. IN THE BOOKS OF ACCOUNTS THE ASSESEE HAS ALREADY REFLECTED THE CHEQUE RECEIPTS OF RS.24 50 795/- AND CASH RECEIPTS OF RS.20 794/-. FURTHER CASH RECEIPT (AS PER ASSESSMENT YEAR 2006-07) WORKS OUT AT RS.7 97 489/- @ 32.54%. ON THIS BASIS THE ASSESSEE HAS COMPUTED ITS INCOME. ACCORDING TO ASSE SSEE FOR THIS YEAR FURTHER ADDITION SHOULD BE RESTRICTED TO RS.79 260/-. IT IS PERTINENT TO NOTE THAT FOR THIS ASSESSMENT YEAR THE ASSESSEE MADE A DISCLOSURE OF RS.7 LACS. OUT OF THIS RS.1 LAC HAS ALREADY BEEN DECLARED IN THE RETURN OF INCOME. AS PER THE ASSESSEES WORKING FURTHER ADDITION TO BE MADE IS ONLY RS.79 260/-. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT IT WILL MEET THE END OF JUSTICE IF FURTHER ADDITION IS RESTRICTED TO RS.1 00 000/- AS AGAINST RS.6 00 000/- MADE BY THE ASSESSING OFFICER. ASSESSMENT YEAR : 2005-06 : IN THE BOOKS OF ACCOUNTS THE ASSESSEE HAS REFL ECTED RECEIPTS BY WAY OF CHEQUE AMOUNTING TO RS.32 44 392/-. THE CASH RECEIPT ESTIMATED BY THE ASSESSING OFFICER AS PER ASSESSMENT YEAR 2006-07 @ 32.54% WORKS OUT TO RS.10 65 696/-. IN THIS MANNER THE ASSESSEE HAS WORKED OUT THE ADDITIONAL UNDISCLOSED INCOME OF RS.2 43 655/- AS AGAINST RS.10 00 000/- DECLARED AT THE TIME OF SEARCH. LOOK ING TO THE FACTS AND CIRCUMSTANCES WE ARE OF THE OPINION THAT IT WILL MEET THE END OF JUSTICE IF FURTHER ADDITION TO BE MADE FOR THIS ASSESSMENT YEAR IS RESTRICTED TO RS.3 00 000/-. ASSESSMENT YEAR : 2006-07 : FOR THIS ASSESSMENT YEAR THE ASSESSEE HAS FILED THE RETURN OF INCOME OF RS.3 06 300/-. THE ASSESSING OFFICER MADE THE ADDITION OF RS.15 00 000/- WHICH IS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). AS PER THE ASSESSEES WORKING (SUPRA) THE UNDISCLOSED INCOME FOR THIS AS SESSMENT YEAR SHOULD BE RS.4 61 227/-. 10 ITA NOS .1228-1232/AHD/2009 LOOKING TO THE WORKING SUBMITTED BY THE ASSESSEE AN D THE FACT THAT THE SEARCH PARTY FAILED TO POINT OUT THAT HOW MUCH UNDISCLOSED INCOME WAS INVE STED/ UTILIZED IN OUR OPINION IT WILL MEET THE END OF JUSTICE IF THE ADDITION FOR THIS ASSESSM ENT YEAR IS RESTRICTED TON RS.5 00 000/-. 8. TO SUM UP THE ADDITIONS OF RS.2 00 000/- AND RS .5 00 000/- MADE IN THE ASSESSMENT YEARS 2002-03 AND 2003-04 RESPECTIVELY ARE DELETED. THE A SSESSING OFFICER IS DIRECTED TO RESTRICT THE ADDITION TO THE EXTENT OF RS.1 00 000/- RS.3 00 00 0/- AND RS.5 00 000/- FOR THE ASSESSMENT YEARS 2004-05 2005-06 AND 2006-07 RESPECTIVELY. 9. IN THE RESULT THE APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2002-03 AND 2003- 04 ARE ALLOWED AND THE APPEALS FOR THE ASSESSMENT Y EARS 2004-05 2005-06 AND 2006-07 ARE PARTLY ALLOWED. . THE ORDER WAS PRONOUNCED IN THE COURT ON 23.07.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23/ 07 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.